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  "documentTitle": "Skechers U.S.A., Inc. (SKX)",
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  "authorName": "Spruce Point Capital Management",
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  "sourceTypeLabel": "Short seller",
  "presentationDate": "2022-07-19 00:00:00",
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  "notes": "Uses a combination of SEC legal precedent and primary source interview testimony to build a case of management untrustworthiness.",
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      "kind": "callout",
      "text": "Spruce Point Interview With Former Skechers Executive Regarding Inventory Transactions With Siskind Entities",
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      "text": "Securities and Exchange Commission v. Gilbert N. Schwartzberg and Arden Franklin (Case 2:95-cv-02046-MRP-Mc), Complaint Filed 3/30/1995",
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      "text": "These issues strain the credibility of Skechers management and our confidence in reported figures.",
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      "kind": "paragraph",
      "text": "Skechers' paid advisor Schwartzberg received a permanent injunction from the SEC, which claimed fraudulent behavior tied to altering inventory data at LA Gear to meet the Street's gross margin expectation.",
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      "kind": "quote",
      "text": "On or about March 19, 1990, Franklin reported to Schwartzberg that preliminary financial statements showed that LA Gear's first quarter GPM was 34.98%... Franklin told Schwartzberg that he would direct the Division Controller... to add about 500,000 pairs of shoes to the First In First Out (\"FIFO\") inventory report to support use of the higher GPM.",
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      "text": "\"On or about March 19, 1990, Franklin reported to Schwartzberg that preliminary financial statements showed that LA Gear's first quarter GPM was 34.98%... Schwartzberg instructed Franklin to proceed to alter the inventory as they had discussed.\" — Securities and Exchange Commission v. Gilbert N. Schwartzberg and Arden Franklin (Case 2:95-cv-02046-MRP-Mc)",
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      "kind": "source-note",
      "text": "Source: SEC News Digest 4/3/95, Skechers Definitive Proxy filed 5/26/2022, Spruce Point research",
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      "text": "Spruce Point Question: One of the directors of the Company, Richard Siskind, seems to have a company that finds a home for excess inventory, often in off-price channels. Was he a channel for Skechers? Former Skechers Executive: Yes, he was part of it. Yes, I'm sure. I can tell you with pretty high confidence that he was an outlet.",
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      "kind": "title",
      "text": "Our Concerns About Inventory Levels Are Exacerbated By The Troubled History of its Advisor Gil Schwartzberg And Undisclosed Transactions With Director Siskind",
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