After Feng Yu said this, Nasdaq's share prices plummeted even faster. Many people started to investigate which blue-chip company Feng Yu was talking about.
At this time, Enron's top management panicked. Others might not know which company Feng Yu is talking about, but they knew.
These top management had used their company's insider information to speculate on their company's shares to make profits. Some of the top management even took loans to speculate on their company's shares.
Enron's Chief Financial Officer had secretly set up an investment company with his friends and raised more than 100 million USD to speculate on Enron's shares. Anyway, they are making profits from this.
Those investors who bought Enron's shares without knowing the truth will have to pay for their mistakes.
At this moment, they are still glad that Enron's activities will not be discovered. How did Feng Yu find out about it when so many people had not discovered it?
Enron had been voted the most innovative company by < Fortune > for the past few years. This year, Enron was also one of the 100 Best Employers in the US. Many people were envious of Enron's luxurious office.
Under these beautiful packaging, who would know that our company has financial problems? Even < Fortune > magazine does not know about it, and how did Feng Yu find out about it?
Feng Yu is not talking about us. Maybe he is talking about Microsoft. Feng Yu is a former director and shareholder of Microsoft. If Feng Yu had not found out about Microsoft's fraud, why would he be kicked out of the board?
Yes. This must be it!
… …
The reporters could not get an interview with Feng Yu, and Jack had an idea. He called again to book an exclusive interview with Feng Yu, even if it is only a phone interview.
To his surprise, Feng Yu agreed to his request!
The TV station immediately starts to promote this interview and said they will play the recording after the interview ends. At the same time, they will sell the rights to the media.
"Mr Feng, nice to meet you. I am Jack. Do you still remember me?"
"Of course. The last interview was not long ago." Feng Yu laughed.
"It is my honor to be remembered by one of the world's top tycoons and one of the most talented investors. Mr Feng, the purpose of today's interview is to ask you something. You mentioned last time that some blue-chip companies falsified their financial reports, right? "
Inside, Jack was screaming, Answer, yes, answer!
"That's right."
Jack held back his excitement and continued to ask, "May I ask which company it is?"
"Of course. It is Enron." Feng Yu replied.
Feng Yu had ordered his men to short Enron's shares, and now, Enron's shares are falling, which is beneficial to him. Also, Enron's share prices will crash, and investors will lose trust in the US stock market. Blue chips have this kind of problem, let alone other companies.
Once a trust crisis occurred, it wouldn't be easy to settle.
The television station's higher-ups on the other end of the line were dumbfounded. Which company? Enron? How was this possible?
Yesterday, Enron's higher-ups had announced that Enron's share prices will double, and investors will get high returns. Why is Feng Yu saying that Enron is the company that falsified their financial reports?
"Mr Feng, do you have any evidence?" Jack's voice was trembling.
"Do any of you know about financial reports? Do you know about Benford's Law? That means from a pile of data, the probability of a number starting with 1 is 30%, the probability of a number starting with 2 is 17.6%, and the probability of a number starting with 3 is 12.5% … Enron's financial reports are not in line with this law. That's why their financial reports must be falsified! "
Jack and the other television station's higher-ups looked at each other. What is Feng Yu talking about? Benford's Law? What probability? They don't know anything about it.
The Station Head was indeed wise. He immediately called the CFO of the TV station over and asked him to explain if this so-called Benford's Law was reliable. If they report this and become a joke, they will have to bear the wrath of Enron!
"Alright. I still have something on. Let's end this interview."
After Feng Yu hangs up, the leaders of the TV station surrounded the CFO. The CFO nodded. He had heard of Benford's Law before, but this is not considered evidence.
So, the TV station's higher-ups consulted some professional financial analysts and audit companies. They found out that Benford's Law is not widely used, but it is an effective audit method. If the TV station changes the data, it will be found out.
The TV station will not allow the interview to be broadcasted live. The TV station's higher-ups contacted other media companies to sell the broadcasting rights, and at the same time, they are planning to produce an episode based on this recorded call.
Of course, they can also air some advertisements during the interview to earn more money.
… …
"Feng Yu said Enron is the company that falsified their financial reports!"
"Feng Yu says Enron's financial reports are falsified, and he has evidence!"
"Enron's financial reports are not in line with Benford's Law. This is the evidence!"
… …
Feng Yu took the headlines of many newspapers again, and his recorded interview was broadcasted by many media companies.
Some people believe Feng Yu, but most do not believe him. Many people do not know about Benford's Law. Could it be that there is a probability problem with the data?
But what Feng Yu said is not enough to convince the public. After all, Feng Yu is not a professional financial analyst. But Feng Yu hired two famous professors from Harvard Business School in the US to write a statement to prove that Enron's financial reports are not in line with Benford's Law. They must be falsified!
After the articles written by these two professors were published, many media companies reported it. They swear on their honor that what they said is true. Enron's financial reports are falsified!
This incident caused a huge uproar.
As a blue-chip company, Enron's shares start to fall, and all the investors start to dump their shares, including Enron's top executives.
They know the authenticity of this news, and once it is investigated, the truth will be exposed.
Citibank, JP Morgan, etc. are also panicking. They have frequent financial dealings with Enron, and they should know about Enron's financial problems.
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