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AmTrust knocked down 12% on secret tapes
https://seekingalpha.com/news/3256590-amtrust-knocked-12-percent-secret-tapesAmTrust knocked down 12% on secret tapes
Apr. 11, 2017 9:56 AM ET|About: AmTrust Financial Servic... (AFSI)|By: Stephen Alpher, SA News Editor
The FBI and SEC had a whistleblower at AmTrust's (AFSI -12.2%) accounting firm in 2014 who took clandestine recordings of chats regarding the audit of the company, according to the WSJ.
•The mole was part of AmTrust audits for at least three years, but has since left the accounting firm.
•Maybe most troublesome to AmTrust longs, he/she since 2013 has been working with a group including Bernie Madoff whistleblower Harry Markopolos. That group claims the company shifted $277M of losses to an offshore affiliate from 2009-2012, thus boosting operating income by that amount.
•The Markopolos team called one set of accounting moves "The Washing Machine" and another "The Loss Cemetery."
•The SEC Fort Worth office is leading the investigation, but it's not clear how far along the probe has gotten.
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