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  "documentTitle": "NQ Mobile (NQ)",
  "authorId": "51_Muddy_Waters",
  "authorName": "Carson C. Block",
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  "presentationDate": "2014-06-04 00:00:00",
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  "notes": "This is a text-heavy research note page focusing on the failure of internal investigations to uncover fraud.",
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      "text": "Unless NQ chooses to provide the level of transparency that Sino-Forest did and release the actual report, we are unlikely to ever learn details about the tampering because the work is shrouded by attorney-client privilege.",
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      "kind": "paragraph",
      "text": "Muddy Waters offered to pay for well-regarded investigative accounting firm Plante & Moran PLLC to write an evaluation report of the investigation, which we would publish. The committee declined the offer.",
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      "text": "There are far more questions posed than answered by NQ’s press release. The admission of data tampering was undoubtedly the result of a negotiation between the advisors and the company, and which despite making it clear that the tampering was widespread, almost certainly understates the severity of the problem. Unless NQ chooses to provide the level of transparency that Sino-Forest did and release the actual report, we are unlikely to ever learn details about the tampering because the work is shrouded by attorney-client privilege.",
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      "text": "The Sino-Forest committee’s conclusion that it could find no evidence of fraud has now been thoroughly discredited. The Ontario Securities Commission is suing the former management for fraud. Just two weeks ago, Sino-Forest’s creditors filed suit against its former chairman Allen Chan for $3 billion. In the complaint (available to download at http://www.muddywatersresearch.com/wp-content/uploads/2014/06/SFC_Litigation_Trust_v_Chen_Claim.pdf), the plaintiff dismisses the independent directors’ conclusion, and cites the data tampering as evidence of fraud. It is a sad commentary on how insulated corporate directors are from responsibility that they can publicly conclude there is no evidence of fraud after conducting an investigation in which management was caught defrauding the investigators.",
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      "text": "This press release took seven and a half months to come out. Given that there was data tampering during an investigation that dragged on far longer than should have been allowed, it is clear that management was able to stay a step ahead of the investigation by changing and deleting data.",
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