Profitable market niche: frauds

[Gwhiz]

Given the uncertainty in the market recently, I´ve been thinking that the best way to hedge against a decline in the broad market is to short, or buy puts on frauds. I know there are a lot of frauds in the market, it is just a matter of identifying them. I thought that if anyone else knew a few frauds, and I suspect most people know one or two, we could use this thread to share them.

The ones I know are MDTL, MNCS.ob and XNL, of these MDTL is definitely the most attractive short and the only one on which puts are available.

Anyway, if any one can think of a company they suspect is fraudulent, please post.

Thanks

[mrmarket]

Given the uncertainty in the market recently, I´ve been thinking that the best way to hedge against a decline in the broad market is to short, or buy puts on frauds. I know there are a lot of frauds in the market, it is just a matter of identifying them. I thought that if anyone else knew a few frauds, and I suspect most people know one or two, we could use this thread to share them.

The ones I know are MDTL, MNCS.ob and XNL, of these MDTL is definitely the most attractive short and the only one on which puts are available.

Anyway, if any one can think of a company they suspect is fraudulent, please post.

Thanks

Actually, I think that, for the most part, stock prices of "frauds" have very low betas and do not move commensurate with the market. Rather, they move independently as a function of the news or hype generated by the company.

As a result, I do not think this strategy would be an efficient hedge for you.

[jiesen]

Also, posting any meaningful response to that question opens the poster up to liability, as the burden of proof lies on the accuser of the fraud. And fraudsters are often eager to sue (or threaten to sue) anyone who calls them on it, regardless of whether the claim is accurate.

My advice would be to just steer clear of fraudlent activity whenever possible.

[IIC]

Also, posting any meaningful response to that question opens the poster up to liability, as the burden of proof lies on the accuser of the fraud. And fraudsters are often eager to sue (or threaten to sue) anyone who calls them on it, regardless of whether the claim is accurate.

My advice would be to just steer clear of fraudlent activity whenever possible.

I agree with you J as far as forgetting about the idea.

However, there are ways to get around the liability issue if one is so inclined to post stuff like that...For example, if I said the CEO of ________ is embezzling from the company's pension fund...That might put me up to a potential lawsuit.

However, if I said... I've seen this posted at several sites...They say that the CEO of __________is embezzling money from the company pension fund...Anyone know the details? ...In this case all I am doing is asking a question.

Obviously something like that would have to be posted at many places but if it was I could envision that the rumor mills might start churning.