Any Insiders At Caterpillar?

[Burning Petard]

Anybody know anything about this? Looks weird to me.

The DJIA stock posting the largest daily percentage loss ahead of the close Thursday was Caterpillar Inc. (CAT) traded down 4.4% at $94.25. The stock's 52-week range is $69.04 to $99.46. Volume was nearly 5 times the daily average of around 4.4 million shares. Federal law enforcement officers from the IRS's Criminal Investigation Division, the Commerce Department's Office of Export Enforcement, and the Federal Deposit Insurance Corp.'s Office of Inspector General executed a search warrant on company facilities in Illinois.

Are they cooking the books on their exports? And what could they be doing that would pull in the FDIC?

snail gate

[MajGenl.Meade]

Maybe something to do with this:

US officials have raided three Caterpillar sites as part of a criminal probe into tax irregularities at the heavy machinery manufacturer.

The raid sent the company's stocks sharply lower to close down 4.3%. Caterpillar said it thought the probe was linked to profits from Swiss subsidiary CSARL.

The company is accused of shifting billions of profits abroad to avoid paying taxes in the US. The officials searched the headquarters of the company, one of the world's largest makers of construction and other heavy equipment, in Peoria, Illinois. Two other sites in Illinois were also raided under the federal warrant.

The raids come as the Trump administration plans to overhaul corporate taxes to keep jobs and profits within the country. The subsidiary in Switzerland was the focus of a 2014 investigation by the US senate alleging it was set up to shift billions of profits abroad to avoid paying taxes in the US.

http://www.bbc.com/news/business-39149474

...and I feel sure this Jan/Feb debacle is not helping:

In the wake of Caterpillar’s $580 million write-down of the value of a Chinese acquisition where it claimed to have discovered major accounting irregularities, Beijing-based accounting expert Paul Gillis has helpfully detailed several methods crooked Chinese companies commonly use to cook the books.

The tricks Gillis mentioned include faking sales and then fabricating cash that should have flowed in from those sales by, for example, pretending money is temporarily being held by subcontractors the company has hired to carry out some business on its behalf.

What unites the alleged fraud at Caterpillar’s Chinese subsidiary, Siwei, with the methods described by Gillis are their simplicity. While Enron hid its losses by conducting derivatives transactions with its own off-balance sheet vehicles and Bernard Madoff went to extreme lengths to conceal his Ponzi scheme with a purported “split-strike” trading strategy, corrupt Chinese companies often inflate sales by fabricating deals and inventing false customers.

According to Caterpillar, Siwei turned out not to have much of the equipment it had listed on its books.

In his interview with China Money Podcast, Gillis wondered aloud why Caterpillar’s auditors did not notice Siwei’s missing equipment before the acquisition. “Did the accounting firms miss what was right in their face?” he mused.

https://qz.com/51229/the-simplicity-of- ... -scandals/

[rubato]

Anybody know anything about this? Looks weird to me.
... And what could they be doing that would pull in the FDIC?

snail gate

Nothing, The FDIC is not mentioned. (they insure savings deposits at S&Ls and Banks)


yrs,
rubato

[rubato]

Maybe something to do with this:

"...

What unites the alleged fraud at Caterpillar’s Chinese subsidiary, Siwei, with the methods described by Gillis are their simplicity. While Enron hid its losses by conducting derivatives transactions with its own off-balance sheet vehicles and Bernard Madoff went to extreme lengths to conceal his Ponzi scheme with a purported “split-strike” trading strategy, corrupt Chinese companies often inflate sales by fabricating deals and inventing false customers.

According to Caterpillar, Siwei turned out not to have much of the equipment it had listed on its books.

In his interview with China Money Podcast, Gillis wondered aloud why Caterpillar’s auditors did not notice Siwei’s missing equipment before the acquisition. “Did the accounting firms miss what was right in their face?” he mused.

https://qz.com/51229/the-simplicity-of- ... -scandals/

[/quote]


Ha Ha Ha ! We have learned that lying and corruption in China in business is more common than honesty.

That most recent scam was that Chinese solar companies would buy 1 lot of our material to make panels with, advertise that they were using it to all their customers because we have published a lot of data about its good peoperties. Then replace it with an inferior Chinese "brand Xiao" product. We started finding out when the buyers ( in Norway) had panel failures and called us to talk about it.

And you recall the melamine scandal? First they put it in pet food so that tests would show it was higher in protein. The pet food was sent to the US where it killed dogs. The US sent investigators who were detained in Beijing long enough that when they got to the plant had been bulldozed and no one could find the owners. Having killed dogs did not dissuade them from next putting it in infant formula which killed and caused permanent injury to hundreds of children.
Having got caught for that biit of ugliness did not dissuade them from saying "hey we still have all this melamine lets do it again" which they did.

Never buy food, pharmaceuticals, or chemicals from China unless you test them yourself.


yrs,
rubato

[Long Run]

And what could they be doing that would pull in the FDIC?
snail gate

My guess is that it would have to do with protecting FDIC institutions (i.e., banks). While its main role is providing deposit insurance, this is designed to promote overall confidence in the banking system. Thus, it has a role in making sure whatever the alleged crimes that such actions are not harming the financial system and that its member banks are not part of the crimes.