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  "documentTitle": "Twist Bioscience (TWST)",
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  "notes": "Uses historical precedent of WorldCom fraud to frame current allegations against Twist.",
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      "text": "2 workers sentenced in WorldCom scandal. One accountant gets prison, another probation",
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      "text": "Misclassifying expenses, particularly as capex, is one of the oldest accounting frauds in the book – causing Worldcom’s rapid collapse into bankruptcy when it was revealed, and landing its CEO, CFO, and various accounting staff in prison.",
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      "text": "Former Worldcom Controller Pleads Guilty to Fraud Charges",
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      "text": "We think that Twist’s gross margin is negative, and believe that the company has concealed this secret with a scheme that misclassifies cost of goods - on a staggering scale - through two mechanisms: 1) improperly expensing direct manufacturing costs like labor as R&D, an operating expense; 2) capitalizing manufacturing costs as capital expenditures. Misclassifying expenses, particularly as capex, is one of the oldest accounting frauds in the book – causing Worldcom’s rapid collapse into bankruptcy when it was revealed, and landing its CEO, CFO, and various accounting staff in prison. We note that Worldcom’s fraud actually began by shifting labor costs from one category into another, and only later metastasized into capitalizing them.",
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      "text": "Ex-WorldCom CFO Sullivan gets five years in jail. Received reduced sentence after cooperating with prosecutors",
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      "text": "Source: https://www2.ljworld.com/news/2005/jul/14/celebrated_worldcom_ceo_cries_25year_sentence_read/; https://www.computerworld.com/article/2558072/ex-worldcom-cfo-sullivan-gets-five-years-in-jail.html; https://www.pbs.org/newshour/economy/business-july-dec02-worldcom_09-26; https://www.deseret.com/2005/8/6/19905771/2-workers-sentenced-in-worldcom-scandal",
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