Good morning! 

Lots of announcements to look at today - since most of them are just trading updates, I will keep my comments briefer than usual.



Financial Archaeology

In among today's trading updates, I noticed that the Financial Reporting Council has delayed its complaint procedure in relation to a financial executive at Autonomy (AU), the British software business acquired by HP. He is currently facing trials in the US.

What's remarkable about this is that the alleged misdeeds took place up to and including 2011.

How can it take eight years for the authorities to investigate these matters? A rhetorical question.

Short-seller Jim Chanos described Autonomy as "one of his absolute favourite shorts" back in 2012, and admitted that he was crushed by HP's acquisition of it for £7.4 billion, causing its share price to surge by 78%. He went on to make some money shorting HP. 

(Autonomy was a "roll-up" of software businesses which made heavy use of merger accounting - something to keep in mind.)

Even though Chanos lost money on the trade, he deserves credit for spotting the story in real time, along with some other short-sellers. He described the funny business as "hard to miss, if you just looked at the accounts".

Indeed, a few brave sell-side analysts were public about their concerns, too. Paul Morland at Peel Hunt published a note with the headline "Accounting Red Flags" in June 2009. Ten years ago next month!

By contrast, the regulators are still bumbling along nearly a decade later, trying to figure out what happened.

We might also consider the famous case of Quindell (now Watchstone (LON:WTG) ), where the man at the heart of the story has within the last year threatened to put a new company on a major stock exchange.

As far as I know, the Serious Fraud Office is still investigating events at Quindell from around 2011-2013. At least…

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