Sam Antar’s Advice to Investors

In a recent article in Fortune Magazine about felon turned fraudfighter Sam E. Antar…. Sam gave the following tips to investors about looking for fraud in public companies. I think it’s sound advice!

Sam E.’s five rules for spotting potential fraud in public companies.

Study SEC filings yourself.
External auditors, audit committees, and Wall Street analysts cannot protect you from most fraud. Analysts often do not ask the important questions and are too quick to accept management’s representations.

Read the footnotes first.
Tiny things can be huge. In the Crazy Eddie fraud, the change of a single word (from “purchase discounts and trade allowances are recognized when received” to “recognized when earned”) allowed Sam E. to inflate the company’s earnings in fiscal year 1987 by about $20 million.

Watch for inconsistencies.
If the CEO tells the press, “We are profitable,” make sure the figures in the 10-Q back up the statement.

Always crosscheck disclosures.
Compare Management Discussion & Analysis in the current report with MD&A sections in past 10-Qs. Look for any changes in disclosure language.

Sound like too much work?
If you don’t have the time or expertise to do the above, don’t buy individual stocks. Stick with index funds.


One comment

  1. sirgeraldbirkin


    Now that Elandia founder and Ponzi schemer Allen Stanford is in the hands of the FBI, the Feds are looking for his network of swindlers including Sydney D. “Trip” Camper III. According to SEC filings, Trip Camper was forced to resign from Elandia by Stanford. Unfortunately, the Ahkoy family business, Datec, fell victim to investment fraud by Elandia’s Allen Stanford and Trip Camper. Before the bad news could spread, Trip Camper found a new victim in the form of a private Los Angeles company with aspirations to go public. Thanks to his new partner in crime, Ed Berkhof, Trip Camper ruined this honest company as he did Datec, the Ahkoy family business. Since becoming victims of Elandia fraud, the Ahkoy Family is suing Elandia in Pacific and Florida courts. Meanwhile, Trip Camper remains at large. Recent articles reveal that “FMC Telecom has acquired SMS…” and lists Ed Berkhof as the appointed COO. FMC Telecom founder Frank Cassidy is either Ed Berkhof’s NEW partner in crime or he has unfortunately fallen victim to investment fraud orchestrated by Ed Berkhof.

    Investors Beware! The FBI is looking to prosecute thieves like Allen Stanford, Bernie Madoff, Trip Camper and Ed Berkhof who are leaving a path of destruction and a wake of fallen victims of fraud. Don’t be a victim of investment fraud.

    View SEC links

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