Posted on 05/13/2022 9:17:58 AM PDT by DoodleBob
“I expect the SEC will go after Twitter if there is a case.”
I imagine they’re doing so right this very moment. Look for the cases to be prosecuted in the SDNY which deeply frowns on securities fraud.
Income is recorded on financial statements, not customers.
I’ve been in audit, as well.
The SEC people of multiple genders can still be fired on the spot by Xao Bai-Dung and prosecuted in show trial by Mary Garland.
“Which is why going private equity is nice.” Unless of course the private equity firm that bought you out is named GPB Capital. Estimated to be the 3rd largest ponzi scandal in US history, and the principals are still not in prison.
It was a heartbreaking experience.
“I will say I am not aware of a SOX control that would care about the number of customers. Instead, it is strictly financial, so income and expenditures would be things the accounting department would have to get right—not the number of “valid customers.””
My thoughts exactly.
This may be a road map to taking down all of the tech companies with bots and fake accounts.
SOX can make the most resolute board room quake with fear. Once it gets on you, accusation or not, it does not go away. You can quit but it will follow you.
This could be even more fun to watch than it is now.
SOX should be applied to universities. If, for example, a college claimed to have a professor of Native American descent, the college’s president should be held accountable if it’s really a shrill harpie gaming the affirmative action system on her way to the Senate.
SOX covers more than just what a company reports as income.
Significantly overstating customers would be a material mistatement.
Customer count is nowhere in a SOX report.
It may be in their annual report, but it is not a SOX financial item. I know.
When ad rates are set by the number of customers, then the income is directly influenced by the allowance of fake accounts, thereby inflating revenue based on known fraudlent data. Wouldn’t that count as cooking the books?
I’ve not been in a financial audit role, so I’m asking a real question to which I do not have the answer.
Ad rates have nothing to do with the accuracy of the financial statement.
It’s analogous to saying the job you have affects the accuracy of your bank account statement. It’s can’t. You can increase the funds in the account or decrease the amount taken out, but none of this affects the “accuracy” of the accounting numbers.
It’s ripping off the ad buyers but also Share Holders which is even worse because of regulations and huge sums of money are in play.
Perhaps charges are in order for the Board of Directors. That’s too bad. 😆🤣😂
Elon Musk tendered an offer based on the representations of the company by their Directors and Executive who asserted that they were correct. They agreed to the terms presented by Musk and now they are engaged in good faith negotiations to finalize the transaction. We now know that Twitter’s representations were not correct and they knew it.
My guess is that Musk knew this at the outset and he set a trap that the Twitter leadership could not avoid. He holds all of the cards and he has options. He can walk away from the deal, which will destroy the company, or he can sign the deal under a renegotiation agreement that will reduce the purchase price that more closely aligns with the real value of this company. The Directors and the Officers of the company will be in serious legal jeopardy and may end up as defendants in a criminal court.
Elon Musk tendered an offer based on the representations of the company by their Directors and Executive were correct. They agreed to the terms presented by Musk and now they are engaged in good faith negotiations to finalize the transaction. We now know that Twitter’s representations were not correct and they knew it.
My guess is that Musk knew this at the outset and he set a trap that the Twitter leadership could not avoid. He holds all of the cards and he has options. He can walk away from the deal, which will destroy the company, or he can sign the deal under a renegotiation agreement that will reduce the purchase price that more closely aligns with the real value of this company. The Directors and the Officers of the company will be in serious legal jeopardy and may end up as defendants in a criminal court.
If you are overstating customers, you’re going to have to refund advertisers. That’s going to directly impact the financials.
That has nothing to do with the financial statement.
Twitter and Facebook and the other social media companies lie about the number of users. They know there are many fake accounts. This boosts the stock price. The owners should lose all the money.
When the financial statements is based on revenues that are overstated, that definitely does have something to do with the financial statements.
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