Fraud Discovery Institute issues report on Speedway Motorsports (NYSE:TRK)

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Barry Minkow and his team at Fraud Discovery Institute has issued a new report on Speedway Motorsports Inc. (NYSE:TRK) This report is a follow-up to the report on the company’s president, Marcus Smith, who lied about having a college degree.

Why was this report done? On the day that news hit about the president lying about his degree, the stock of Speedway started to fall. The company’s response? Insiders (executives and directors) of Speedway started purchasing stock in order to prop up the price of the stock.

Why would they do that? It became clear that the company was terrified and grasping at straws just to stay alive. Barry Minkow realized there had to be more to the story. The president of Speedway lying about his degree had to be just the start. There had to be other problems in the company that management was trying to cover.

So FDI  issued today the Top Ten Red Flags of Fraud at Speedway Motorsports Inc. This video was issued as well:

FDI and Barry Minkow also put up a website, Speed SCAM Motorsports, and the full report is there. Here are just a few of the fraud red flags raised in that report:

  • False information in an SEC filing about a NASCAR race that Speedway wants to bring to one of its tracks (No NASCAR race = no revenue)
  • Significant control by one person, who owns 67.5% of the company’s stock, has pledged many of those shares for other business ventures, and has many related party transactions between Speedway and those other business ventures (with Speedway shareholder apparently bearing almost all the risk, and the other ventures standing to gain much of the reward)
  • Covering up the true decline in viewership and attendance for races, which are the lifeblood of the company

The report is full of interesting information about the company. Take a look at it!

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