Investing in Longtop — the Case of Longtop Financial Technologies (A)

Mike J. Thompson (First Author), Astrid de Reuver (Participant Author)

    Research output: Other contributionCase Studies

    Abstract

    Longtop Financial Technologies (Longtop), a company registered in the Cayman Islands, went public on the NYSE in 2007. After four years of significantly above average revenues and profits, Citron Research, a research firm that specialized in exposing fraud among Chinese stocks, posted an online report on Longtop, accusing the company of fraudulent accounting: “It is the opinion of Citron that every financial statement from its IPO to this date is fraudulent”. In May 2011, Longtop’s auditor, Deloitte Touche Tohmatsu CPA Ltd. China (Deloitte Shanghai), resigned. It said that Jia Xiao Gong, Longtop’s chairman, had admitted false profits and false cash flows recorded on the books in the previous years. On 14 December, the American Stock Exchange Committee (SEC) revoked the registration of Longtop for failing to file required annual reports and audited financial statements with the SEC. Longtop investors had already filed a lawsuit against the company to recover losses incurred on their securities being made substantially worthless as a result of allegations.
    Original languageEnglish
    Number of pages12
    Publication statusPublished - 1 Jan 2012

    Case number

    ACC-14-143

    Case normative number

    ACC-14-143-CE

    Case type

    Library

    Update date

    2016-07-02

    Published by

    China Europe International Business School

    Keywords

    • Delist
    • Financial Fraud
    • Governance Structure
    • Investment Decision
    • Investment Risk
    • Risk Management

    Case studies discipline

    • Accounting
    • Finance

    Case studies industry

    • Finance and Insurance

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