Easy Prey Investors: Why Broken Safety Nets Threaten Your Wealth

by Al Rosen, Mark Rosen

Overview

Over the past twenty-five years, a series of actions, omissions, and failures by Canada's lawmakers and the purported gatekeepers of investors' rights have left Canadians' investments, pensions, and retirement savings at greater risk. Bodies such as provincial securities commissions have abandoned their obligations to safeguard investors and allowed published and audited financial statements in Canada to become unreliable. Yet these distorted financial statements are often used by financial analysts who present them as accurate, leaving investors in the dark about serious risks and negative impacts on their savings. In Easy Prey Investors, investigative forensic accountants Al and Mark Rosen examine the circumstances – beginning with a 1997 Supreme Court of Canada ruling that largely granted external auditors immunity against shareholder lawsuits – that have led to a proliferation of corporate scandals and other financial manipulations, and a corresponding lack of accountability among auditors. Based on their many years of experience in major Canadian court cases involving collapsed companies, the authors reveal the full stories behind the financial deceptions, and describe the disturbing consequences for investors. They show how a combination of inaction by lawmakers and illogical delegation of regulatory power to conflicted financial statement auditors has seriously harmed investors, as well as how most conventional protections have been stripped away from stakeholders. Why invest in Canada when your money can so easily be lost? Prying open doors too often sealed shut, Easy Prey Investors illuminates the unpleasant details of financial manipulation and suggests new ways to guide and protect investors and their families.

Product Details

ISBN-13:	9780773559417
Publisher:	McGill-Queens University Press
Publication date:	10/03/2019
Edition description:	Reprint
Pages:	400
Product dimensions:	6.00(w) x 9.00(h) x 1.00(d)

About the Author

Al Rosen and Mark Rosen are co-founders of Accountability Research Corporation and have written columns for Canadian Business Magazine, The Financial Post, and Advisor's Edge Report. They both live in Toronto.

Table of Contents

Acknowledgments ix

Preface xi

1 Unacceptable State of Affairs 3

2 Ponzi Schemes 9

3 Sino-Forest: Why Us? 16

4 The Hercules Managements Case 33

5 Evolution of Canadian Financial Trickery 39

6 The Basics of Scam Detection 44

7 Interest Rate Manipulation 62

8 Yield Scams 76

9 Cash Flow Games 88

10 Nortel and Its Clones 99

11 Related Party Nastiness 110

12 The Saga of Castor Holdings 119

11 Revenue Trickery 132

14 Time for a Pause 141

15 Conning Financial Analysts 147

16 Potentially Troublesome Scenarios 159

17 Unproductive Audits? 167

18 The Livent Inc. Case 181

19 IPO Traps 192

20 Watch for the Usual Suspects 200

21 Canada's Slippery Slopes 208

22 The Party Line 220

23 IFRS in a Nutshell 226

24 Conceptual Flaws of IFRS 242

25 Deficient IFRS 265

26 REITS and Cash Flow: More Misleading IFRS 275

27 IFRS and Extractive Industries 283

28 IFRS Financial Analysis 293

29 IFRS Analysis in Action 301

30 Typical IFRS Traps 315

31 Perpetual Ponzi Corporation 326

32 IFRS vs. Old GAAP 335

33 Government Neglect 344

Appendices

1 Financial Statements Explained 353

2 Hercules Immunizes Canada's Financial Statement Auditors 360

3 Stock Market Rides 367

4 Mainstreet Equity Corp. Illustration 371

Additional Reading/Viewing 375

Index 377

Editorial Reviews

No one in Canada is better qualified to write this long-overdue book than these two outstanding forensic accountants. In Easy Prey Investors, Al and Mark Rosen present startling and rampant instances of dangerous systemic flaws and risks which require serious consideration and debate.” R.T. Naylor, McGill University

From the Publisher