novelones Chapter 462 Enron Fraud Incident
Chapter 462 Enron Fraud Incident
Lin Guohua's whole body was darkened, but he looked stronger than before...
"Mr. Yang, the matter you asked me to investigate has been cleared up!" Lin Guohua said seriously when we first met.
"Guohua, thank you for your hard work! Let's chat while drinking!" Yang Mo said with a smile.
Lin Guohua nodded and continued: "After Enron CEO Jeffrey Skilling took office, he transformed from a natural gas supplier into an energy trading company in the past two years, and created an e-commerce platform in 99 - Enron Online, for energy producers. Provide b2b services with terminal suppliers!”
"I heard that last year alone, Enron's transaction volume reached 3350 billion US dollars, and 60% of the revenue growth came from Enron Online. Enron Online suddenly became the largest B2B company in the world. When the Internet bubble burst, Against this background, Enron's stock price remains stable at US$80, its total market value ranks seventh in the United States, and it ranks 500th among the Global 16, creating a miracle of e-commerce!" Yang Mo asked with interest.
"This is all an illusion! Enron provided a large number of false transactions in Enron Online's business transactions, and used accounting tricks to cover up in the published financial statements..." Lin Guohua said.
"False impression? How did you find out?" Yang Mo asked.
"An employee of Arthur Andersen was fully involved in Enron's accounting and auditing business! Andersen relied on controversial mark-to-market accounting to handle Enron's long-term product contracts for energy commodities, power commodities, and natural gas commodities. In addition, Enron Many special purpose entity companies have also been established, and a third-party company has been arranged to provide 3% of the funds for these affiliated companies!" Lin Guohua continued.
Lin Xi said excitedly: "I know! Although Enron conducted false transactions with companies it controlled, due to the "3% rule", when they prepare financial statements, in accordance with federal law, they can include these affiliated companies, Not included in Enron’s merger scope!”
Lin Guohua nodded: "Yes, Enron has conducted many huge and complex transactions with these companies that are actually controlled by itself. Through these transactions, it has changed its own assets and profit data, allowing Enron to achieve dazzling results online." !”
"Why is this clerk at Andersen Accounting Firm telling you this? He didn't use any illegal means, right?" Yang Mo asked worriedly.
Lin Guohua chuckled and said: "This guy is a frequent visitor to Las Vegas and owes a lot of gambling debts. We made a deal..."
"What do you think?" Yang Mo looked at Lin Xi and Li Heping and asked.
"Do you even need to ask? Didn't you ask Guohua to investigate just to short Enron?" Lin Xi said.
"Currently, the U.S. stock market is in a bear market as a whole, with limited take-up orders and too many restrictions on short-selling securities. We still have to control the pace of short-selling and not cause panic among investors!" Li Heping said after a brief pause.
Yang Mo nodded and said: "Enron's stock price has been stable at around US$80, and the short-selling rate is currently less than 18%. We can use this 18% short-selling opportunity to profit from repurchase, set a support point in advance, and through repeated shocks, we can gain Get more empty chips!”
"Can't you trade through CFDs?" Lin Xi asked.
"Of course! The main battlefield for shorting Enron this time is in the CFD business of securities firms. We used the time difference to sell one-year CFDs at 90% of Enron's average closing price of the previous week. In this way, smart investors You will find that there is a loophole in our CFD contract. If you buy our CFD contract and go to reverse short selling in the stock market, after deducting the handling fee, there will be a profit margin of about 5 points..." Yang Mo continued.
"Wouldn't this cause Enron's stock price to continue to fall?" Lin Xi asked.
Yang Mo chuckled and said: "No, at least half of the CFD trading partners do not do hedging in order to maximize their profits. It only took Enron Online one year for the transaction volume to exceed 3300 billion US dollars. Not only did it make a profit The buyback shorts, and a lot of institutional investors who are kept in the dark, will buy the dip.”
……………~
2001 1 Month 18 Day.
The Internet stock bubble continued to spread, and the Nasdaq index fell below 1800 points.
Wall Street, New York, Morgan Stanley headquarters.
James Gorman is like an ant on a hot pot, with a lawsuit on his forehead.
Half a year ago, Yang Mo's visit brought a large amount of CFD business to Morgan Stanley. These almost "guaranteed profits" businesses have become a profit hanging over Morgan Stanley's head due to the unilateral decline of the Nasdaq index. sword!
A large number of investors who took short orders for the one-year Nasdaq CFD business of Zhiyuan Group liquidated their positions. After the liquidation, the market still showed no improvement trend. If 1800 points remains until the CFD settlement period in early July, as an intermediary, Morgenstern Profits will usher in unprecedented losses!
It all stems from greed!
According to CFD investment practices, after a large number of investors holding long positions in Nasdaq CFDs liquidated their positions, Morgan Stanley should conduct short-selling hedges in the Nasdaq futures market.
But the greedy Gorman is not willing to just earn some handling fees, and continues to dream of cutting off the longs and killing the shorts. But the CFD business is not Nasdaq futures after all. There are many brokers with deep pockets working together to control the violent fluctuations of the Nasdaq...
"Dong dong dong" After three gentle knocks on the door, Mike Harvey walked in: "Your Excellency, President, Mr. Yang Mo is here..."
James Gorman stood up and walked quickly to the reception room, followed closely by McHarvey.
"Mr. Gorman, Mr. Mike, long time no see! Morgan Stanley's CFD business is so interesting, more exciting than Texas Hold'em!" As soon as they met, Yang Mo stretched out his arms and laughed. Got Gorman and McHarvey in a bear hug.
Gorman secretly cursed in his heart: Of course you find it interesting that your book profit exceeds 4500 billion US dollars. If the Nasdaq rises back above now, will you still be able to laugh?
But there was still a smile on his face and he said: "Mr. Yang, congratulations! If nothing else happens, this investment by Zhiyuan Group will become the largest profit in the history of the CFD business..."
Yang Mo chuckled and said: "A win-win... a win-win! Morgan Stanley will not only get a lot of commission, but it will also drive a substantial growth in the CFD business!"
Gorman smiled bitterly and said: "Mr. Yang, you don't know something. Nearly half of the investors who accepted your one-year Nasdaq CFD short orders have already liquidated their positions. The shortfall will be borne by Morgan Stanley..."