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.