Shorting Fraud

Trillions of dollars are lost annually due to corporate fraud, a growing global problem. For savvy professional investors, however, this crisis presents an opportunity. This book is the first to comprehensively explore a systematic and updated approach to identify, analyze, and profit from publicly listed companies allegedly engaged in fraudulent activities. Drawing on hands-on experience successfully uncovering corporate fraud, the author provides practical insights and guidelines supported by academic research and real-world examples. The readers will gain a deep understanding of the fraud investment process, get the building blocks to build their own framework, and develop essential tools with the end goal of executing a profitable investment strategy based on corporate fraud knowledge.

Showcases how to successfully build and conduct an event-driven investment strategy Reveals how to identify, analyze, and profit from publicly listed companies engaged in fraudulent activities Offers a framework built on more than 100 investment cases

Autorentext

Jesper Sorensen was most recently a Managing Director at a major Scandinavian bank where he headed up more than 100 major investment due diligence and FinCrime related cases in a period of four years. In his role, he started, scaled, and headed a new type of specialist Financial Crime team and was the main conceptualist and architect of new due diligence and FinCrime tools utilizing Machine Learning and AI. Jesper and his team exposed more than $1 billion in fraudulent activities related to corporate entities. Besides the direct financial impact, he has had a successful collaboration with law enforcement agencies, leading to investigations, prosecutions, and litigations of fraudulent corporate entities.

Inhalt

Part I - Shorting Fraud - Profiting While Maintaining Market Integrity.- 1 Introduction.- 2 The Proactive Fraud Investment Strategy.- 3 Market integrity rewards and The potential of Corporate Fraud Exposure Capital Gains.- Part II The Corporate Fraud and The Corporate Fraudster.- 4 The Corporate Fraud.- 5 The Main types of Corporate Fraud.- 6 The Risk of Corporate Fraud.- 7 The Time dimension of Corporate Fraud.- Part III Screening markets and companies for Corporate Fraud.- 8 Screening & Detecting the Fraudulent Publicly Listed Company.- 9 Screening abnormal Market Activity for potential fraud indicators.- 10 Screening the official Statements, Material and disclosures from Publicly listed companies.- 11 Using Statistical methods To Screen for earnings manipulation and Corporate Fraud.- 12 Machine Learning Models to Screen Financial Statements for Fraud.- 13 Lie detection Screening of the C-Suite with AI & ML.- 14 Screening Auditors- & Equity Analysts traits related to Corporate Fraud Risk.- 15 Screening other public disclosures for risk of corporate fraud.- 16 Screening for Corporate Governance Factors And Adverse Media Signals Related to Corporate Fraud.- Part IV Deep-Dive Investigations of potential fraudulent corporations.- 17 Fraud Investigation, Deep-Dives & Due Diligence.- 18 Investigating the Company Basics.- 19 Investigating The Business Model, Products & Services.- 20 Investigating the CEO and The Executives.- 21 Investigating the Board, Stakeholders & Corporate Governance.- 22 Investigating Financial Reports From the Strategic perspective.- 23 Investigating Balance Sheet, Income Statement and Earnings Manipulation.- 24 Investigating Revenue Inflation techniques to inflate earnings.- 25 Investigating Cost suppression techniques to inflate earnings.- 26 Investigating Revenue recognition & Cost Inflation techniques to suppress earnings.- 27 Investigating Cash flow statements & Fraud Manipulation.- 28 Link & Network Investigation connecting the dots of the fraud.- Part V Executing the fraud short investment.- 30 Using Short Selling to Realize Corporate Fraud Exposure Capital Gains.- 31 Using Other Financial Instruments to Realize Corporate Fraud Exposure Capital Gains.- 32 Financial Instruments to capture fraud induced volatility.- 33 Publication of the Fraud Short Report Maximizing the impact.- Part VI Revisiting AI & ML from a Corporate Fraud Perspective.- 34 Artificial Intelligence, Machine Learning & Corporate Fraud.