NQ admitted widespread tampering with data reviewed during the investigation. The
press release reads:
“Despite the Investigation Team’s extensive review of documents and data
provided by sources both within and outside the Company, the Investigation
Team could not verify that the devices it collected and copied contained all
responsive information at the time the copies were made. On many devices, the
Investigation Team observed indications that some information might be missing,
and the Company’s management and staff were unable to provide a credible
explanation for what the Investigation Team observed.”
This disclosure is reminiscent of the final report delivered by Sino-Forest’s
“independent” committee. The Sino-Forest directors’ conclusion was that they could find
no evidence to support Muddy Waters’s fraud allegations.1 Sino-Forest’s exculpatory
press release read:
“The Independent Committee report verifies the Company’s stated cash balances,
confirms registered title or contractual rights to the Company’s stated timber
assets, as well as the book value of these assets, reconciles reported total revenue
and refutes the allegation that Yuda Wood is a subsidiary of the Company. We
can categorically say Sino-Forest is not the ‘near total fraud’ and ‘Ponzi scheme’
as alleged by Muddy Waters.”
With a couple of name substitutions, the above statement would mirror that put out by
NQ. Unlike NQ, Sino-Forest did release a redacted version of the directors’ report. That
report alluded to the evidence tampering that Sino-Forest management undertook, which
appears similar to that undertaken by NQ.2 It cited problems, including:
• “data on some servers in China appearing to have been deleted on an irregular
basis, and there is no back-up system;”
• “lack of full cooperation/openness in the ICs examination from certain members
Nothing unexpected today for the skeptics, we've seen this movie before.
Carson block tried to drop the share price today by releasing this made up piece of garbage. Investors didn't even flinch. in fact the share price went higher as i watched the ticker. Keep up the good work cb!!
An investigative team assembled by NQ Mobile found no evidence it engaged in the fraudulent conduct alleged by Muddy Waters and said its cash balances were “verifiable and consistent with public disclosures,” according to a statement from the company distributed by PR Newswire. The team did make recommendations to improve internal controls, the company said.
“Hopefully it’s an indication that this has primarily been a manipulated campaign to smear mud at NQ,” Jim Oberweis, president of Oberweis Asset Management, which holds shares in NQ Mobile, said in a phone interview from Lisle, Illinois. “It takes a long time to defeat those types of campaigns, but this is a great first step. We’ll continue to hold our investment in NQ.”
Once again we've seen this movie before we know how it ends. This ain't the first ChiScam investigative white wash report. Sino's report came back no fraud found as well. How'd that work out in the end? If you ain't worried that the two disclaimers are almost identical you should be.