I received a threatening email yesterday from Chinese stock promoter Tianbing “Benjamin” Wey, whose New York Global Group (“NYGG”) was closely affiliated with the failed, fraudulent Chinese hog producer AgFeed during the period under litigation by the SEC and shareholders. He did not like my mention of his relationship to AgFeed, its auditor and its executives in a recent post about AgFeed’s audit firms. His claims are not only strange but wrong.
The AgFeed case is the mother lode for an SEC that says it’s ready to rack up some accounting fraud enforcement points and, perhaps, pursue a more aggressive enforcement approach to sparsely utilized Sarbanes-Oxley provisions like Section 304, clawbacks.
Company executives and directors like to believe they can purchase a posse of “trusted advisors”. Instead, they’ve often only bought a gaggle of self-interested auditors, lawyers, and consultants. But to whom does each of those vendors owe loyalty?
It is highly unusual for a board member, especially an audit committee member, to be a fraud whistleblower for a public company. Milton Webster, a former AgFeed director, did it but he, unfortunately, won’t be around to see the result of his significant social and professional sacrifice.