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After The RINO Fiasco, Meet Frazer Frost's Other Clients
Now that RINO is the stuff of Chinese fraud folklore, many turn their attention to those who allowed this abortion to happen in the first place: namely the company's accountant, Frazer Frost, LLP ("FF"). We have tried to get some more information on the recently incepted accounting company, unfortunately, when we click on the website's link requiring more information on the "auditor" we get the following "under construction" blank page. The little we could glean, from RINO's 10-K, is the following information: "Moore, Stephens Wurth Frazer and Torbet, LLP (“MSWFT”), located at 135 South State College Blvd., Suite 300, Brea, CA 92821 was approved by our audit committee and board of directors to be our new independent accountant. Effective on January 1, 2010, certain partners of MSWFT and Frost, PLLC (“Frost”) formed Frazer Frost, LLP, which became the Company’s new independent accounting firm.)" Following the abysmal lack of audit controls at RINO, we will leave it to the Federal authorities to determine whether FF is just another Arthur Anderson in the making. However, in our attempt to protect readers from what could be a Chinese-focused Enron fallout, we present the 26 public tickers all audited by FF. It is no surprise that among the company's clients is a preponderance of Chinese companies (many of which have used the recent Chinese IPO bubble to list on various American exchanges). While we caution readers to do their own due diligence, it is probably safe to assume that a short basked of the following 26 names will generate outsized alpha over the next few months: a very rare outcome in a market determined exclusively by levered beta strategies.
Without further ado:
Source: Capital IQ.
While we await to see what happens to RINO if and when it ever gets unhalted, we have the sinking feeling that the same treatment will be afforded to some or all of the above names in short order. Just be careful not to hold OTM puts in any of the names on an OpEx day when the stock is halted as even a massively profitable put will expire worthless should the underlying not be allowed to trade down to its fair price of +/- 0.
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Nice. Can't wait to see the outcome of this one. Of course, we're presuming that the regulators will actually do their job.....this time.
I see an ETF waiting to happen in those 26 names.
A safer way here may be to play the short side of the NASDAQ. That appears to be the bulk of the carry load on the list.
SPX
http://99ercharts.blogspot.com/2010/11/spx_22.html
http://www.zerohedge.com/forum/99er-charts
Brea is a very nice little town, not the kind of town to have accountants working with listed companies.
Stop this Zerohedge!
Had anyone actually read the report Frazer gave RINO for its 2009 financial statements??
The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion.
Frazer is NOT AT FAULT!!
This is the propaganda that is just as low as the Greenberg and Cramer I believe.
This is what Frazer has to say about HRBN:
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Harbin Electric, Inc. as of December 31, 2009 and 2008, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2009 in conformity with accounting principles generally accepted in the United States of America.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Harbin Electric, Inc.’s internal control over financial reporting as of December 31, 2009, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated March 15, 2010 expressed a unqualified opinion.
Much different than what said for RINO.
Ah, quite the contrary. They did express an opinion on the fairness of the financial statements. I think perhaps you have missed the point. What you are referring to is the supplemental examination of internal accounting controls. I suspect that Frazer has some liability here. If it is shown that their audit was deficient they are cooked. Sorry mate, 30 years as a CPA in California. I know the rules. I also have seen these small firms try to handle SEC work in the past and get cooked.
As usual, who needs an auditor, the only ones who can absolve themselves of a duty and get paid not to perform that duty. So what did you do on this little shit company?, probably fuck all. Auditors are used to wash what cannot be cleaned clean.
The mob needs a little help, there some paper that needs "due dilligece".
Just keep doing "your job"
Great work.
Charles & Colvard have a happy history. I noted CVVT Friday. BTW FF isn't so much another potential Arthur Andy as it's another potential Moody's which happily rolls along.
TYLER and Staff: Very good work here. More investigative reporting needs to be done in areas like these. Again, our tip of the hat to you all... We are impressed as it is the little details that always leads to the bigger areas of fraud.
This blog wrote this story last week with research from some shop called GFI:
http://stockbox.blogspot.com/2010/11/rino-and-subsequent-fallout.html
You are all over it! good work on your part.
+10
+10 Many thanks! Great nuggets of info - both yours and here.
Brea, lol, as in Tar Pits: a World Class Location for Fossils.
(humor level +1)
Just an FYI China ACM Appoints Friedman LLP as Auditor (Jan 3/11) http://yhoo.it/g3Zuyl
Regards,
George