BRITS GET BIT (New York Post)
Add comment April 6th, 2007
LAX BRITISH MARTS ATTRACT FRAUDS ALONG WITH U.S. BIZ
By PAUL THARP
January 8, 2007 — London is paying a steep price for poaching a slew of new stock listings from Wall Street last year -financial fraud in the United Kingdom rose 40 percent.
A report says British authorities are aghast at the skyrocketing of business fraud in the U.K., ranging from stock swindles to accounting hijinks such as rigging profits and asset values.
The report by accounting firm BDO Stoy Hayward stopped short of blaming the crime wave on the influx of tiny American startup companies and their entourages, who’ve fled the stricter U.S. stock exchanges in New York to London, where lately it’s easier to list shares and get investors’ cash.
By going public on the London Stock Exchange under its CEO, Clara Furse, or its sister London AIM (Alternative Investment Market), a startup company has fewer regulatory and auditing requirements than if they listed on a U.S. exchange - a fact that’s aggravated the New York Stock Exchange and the Nasdaq, cost them listings and raised outcries here by leading politicians.
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The accounting study said rising financial crimes cost British businesses more than $2.7 billion. Losses could be higher because the report included only frauds that exceeded $100,000 in losses. A flood of financial collapses of new companies also could be ahead.
Experts said London’s exchanges also accepted scores of new listings of Chinese and Russian companies that may not have met New York exchanges’ stricter rules.
