America's No. 1 financial conglomerate

Chapter 582 The Offensive Comes One After Another

"Ring ring ring".

The sharp, urgent ringing of the telephone echoed repeatedly in the master bedroom, like a blade slicing through the stillness of the night.

Each sound carried an undeniable penetrating power, striking the ambiguous, intertwined air in the room.

On the large bed, the silk sheets were piled up haphazardly, outlining two intertwined bodies.

Jessica's cheeks were flushed, and the stray hairs on her forehead were damp with sweat, clinging to her smooth brow.

The phone finally stopped ringing after nearly a minute.

Before anyone could even catch their breath, as if sensing someone was in the room, the alarm bells rang out again at an even faster pace, as if conveying an extremely urgent message.

Jessica slumped into Ernst's arms, cursing in frustration, "I hate Wall Street, those guys should go to hell."

Ernst's fingertips gently traced Jessica's smooth back, feeling the body of the woman in his arms trembling slightly from the intense pleasure she had just experienced.

He chuckled softly, the vibrations of his chest transmitting through his skin to the girl in his arms. He raised his hand and gently combed her disheveled blonde hair, his fingertips caressing her delicate earlobe, his tone tinged with affection, "Alright, don't let those irrelevant people spoil your mood."

Reaching for the phone, he saw it was from Bai Wen Houston. As soon as he held the receiver to his ear, a slightly hurried male voice came through: "Several mainstream financial media outlets have just simultaneously disclosed an anonymously submitted document, suspecting serious financial fraud at YueDong Games."

"Financial fraud?" Ernst wasn't surprised; this was a common tactic used on Wall Street to spread negative news.

Such unfounded accusations are not uncommon, often made to suppress stock prices, acquire cheap shares, or gain the upper hand in a battle between bulls and bears.

With a hint of seriousness in his voice, Bai Wen Houston lowered his volume and said, "According to information disclosed by the media, the first to be questioned are the three wholly-owned subsidiaries of YueDong Games registered in the Cayman Islands, the British Virgin Islands, and Luxembourg."

"The documents show that over $2.87 million of these three subsidiaries have gone missing in the past two quarters. However, YueDong Games' financial report for the last quarter made no mention of where these funds went, only mentioning it briefly as overseas project investment without any detailed explanation."

"Furthermore, some media reporters conducted undercover interviews with employees of YueDong Games, including personnel from the finance department."

"According to these anonymous interviewees, they were completely unaware of the specific flow of this huge sum of money. In fact, the anonymous finance staff member said that they had never seen any expenditure vouchers or investment agreements related to this fund during routine account reconciliation."

An anonymous interviewee, Ernst, said he didn't care at all whether there were traitors among the employees of YueDong.

If the investigation fails to uncover the truth of this matter, it's highly likely that these employees are simply innocent bystanders.

"So, the media naturally speculated that the money was embezzled by the higher-ups at YueDong Games?" Ernst said calmly, a mocking smile playing on his lips.

As one of the countries with the most stringent taxation systems in the world, the United States has always had unwritten rules regarding the handling of overseas income by multinational corporations.

Unless there is a clear need for domestic investment or pressure on shareholders to pay dividends, most multinational corporations retain their overseas income in overseas accounts and nurture it through a series of complex capital operations, rather than directly repatriating it to their home country. This not only avoids high domestic tax rates but also provides corporate decision-makers with an unregulated and flexible pool of funds, which could even be misappropriated.

Registering shell companies to transfer funds under the guise of overseas project investment and technology cooperation, and then using related-party transactions and equity holding on behalf of others to indirectly pocket the funds, is an open secret among multinational corporations.

The entire accounting process is extremely covert. On the surface, it fully complies with accounting standards, but in reality, it transforms the company's public assets into the private wealth of a few.

As the saying goes in the financial world: when there is a profit, the gains go to the owners behind the scenes; when there is a loss, the risk is borne by all investors.

Parker Houston clearly knew what was going on. His anxiety stemmed from the fear that Ernst was hiding something from him: "The amount of money involved in this case is enormous, nearly three hundred million dollars."

According to industry norms, reasonable profit distribution is common, but the fact that such a huge amount of money has gone unaccounted for has exceeded the market's tolerance limit.

If the regulatory authorities confirm this, the consequences will be unimaginable.

There's nothing wrong with seeking legitimate benefits, but there should be limits.

The amount of money that YueDong Games is using is clearly too much.

"Rayne Ruiz didn't tell me about this." Pervin Houston's tone was tentative, and his wording was extremely tactful.

Ernst understood; they were asking him if it was true.

If it's true, we need to find a way to make amends as soon as possible. Ernst glanced down at Jessica in his arms; her brows were still slightly furrowed, as if she was still unhappy about their tender moment being interrupted.

He raised his hand to smooth the wrinkles between her brows and said calmly, "It's true."

As soon as I finished speaking, a clear gasp came from the other end of the receiver, followed by a brief silence.

He understood why the other party had reacted so strongly. Once the allegations of financial fraud were proven true, even if they had locked up a large number of shares of YueDong Games through prior planning and made huge profits from Wall Street in this battle between bulls and bears, they would ultimately end up with a lose-lose situation.

With the intervention of the U.S. Securities and Exchange Commission, YueDong Games will face huge fines, and those responsible may even face imprisonment.

The large number of stocks they had stockpiled would also turn from profit to loss due to the sharp drop in stock prices, and all their previous investments would be lost.

Ernst's smile deepened as his fingertips gently traced Jessica's smooth shoulder, savoring the delicate touch. His tone carried a hint of mystery, "But you don't need to worry. This money is for business investment; it's not some kind of shady deal."

There was still silence on the other end of the line, but even without sound, he could almost hear the other person cursing.

If I weren't the other person's boss, I'd probably be cursing them out right now.

"Investment?" Pervin Houston asked to confirm.

"That's right, trade secrets."

Normally, listed companies should not delay the disclosure of their financial reports. Regardless of whether it is domestic or overseas revenue, the quarterly financial report must clearly disclose the flow of funds.

However, the word "principle" itself implies that it is actionable.

One possibility is that it's a state secret, but it's clear that YueDong Games is unlikely to be that.

Another type is a temporary technical malfunction, which can be delayed upon application. YueDong Games is not included in this category.

Finally, there are trade secrets, such as those involved in major mergers and acquisitions, which may not need to be disclosed.

The whereabouts of a large amount of funds at YueDong Games are unknown, which falls into this category.

Wall Street could certainly find out, but instead of saying so, it used the opportunity to interpret the situation as a fabrication to embezzle company assets.

"Anything else?" Ernst skipped over the topic.

As Perkin Houston just mentioned, this indicates that there is more than one piece of information.

"Furthermore, media reports indicate that YueDong Games' offshore affiliates fabricated overseas sales revenue, and the $1.17 million in revenue reported in the last quarter's financial report was seriously inflated."

There's no need to ask; it's obvious this "Park Houston" is fake.

This operation typically involves registering several offshore companies. These companies first transfer money to YueDong Games, and then repatriate it under various guises such as copyright licensing fees or technology licensing fees, creating a closed loop of fictitious revenue. This is a typical case of cyclical fraud, also accompanied by cross-border money laundering.

The shell company's funds actually came from YueDong Games' overseas private equity financing, which is essentially money laundering by unregistered individuals. They disguised the money laundering as sales revenue through cross-border money laundering, with the aim of driving up the stock price and cashing out, and then the management cashed out.

Money laundering doesn't matter; they can gradually reduce their holdings, and the drop in stock price is simply the transaction fees they pay.

The company's management and shareholders then cashed out after driving up the price, making a fortune.

As for the victims, they will inevitably be the retail investors who take over the losses.

However, while other companies might be able to, YueDong Games is definitely not.

If such an operation were to occur, it would inevitably involve Wall Street institutional shareholders. Given the current relationship between the two parties, it wouldn't just be a matter of public opinion; it would be handed over directly to regulatory agencies for an investigation into YueDong Games.

"So this time it was another anonymous whistleblower from an employee inside that Leap Games?" Ernst felt that Wall Street had nothing new to offer; it was always the same old story.

But he was mistaken; there is still fresh news on Wall Street.

"PwC is involved this time too," said Perkin Houston, uttering a name that surprised Ernst.

They fell silent.

Ernst's eyes flashed coldly. "Sooner or later I'll get rid of this ungrateful wretch." The auditing firm for YueDong Games is PricewaterhouseCoopers. Not only YueDong Games, but many of his companies are audited by PricewaterhouseCoopers.

Ernst is definitely a major client of PwC, but this ingrate is now trying to trip him up.

The audit reports issued by YueDong Games all come from PricewaterhouseCoopers. Regardless of whether there are any problems, PricewaterhouseCoopers should come forward to clarify and stand on the side of YueDong Games.

This is not only a clarification for Leap Games, but also for PricewaterhouseCoopers.

But this guy is silent now. At this point in time, what's the difference between that and a tacit admission?

The market will interpret this as a sign that there's something wrong with YueDong Games, leading to a faster sell-off.

"I think it's great," said Pervin Houston. "It has accelerated the whole process for us, and you can't imagine how strong the market response has been."

"It's hard to say; in less than half a month, Wall Street might surrender to this battle between bulls and bears."