Exchange Commission Essay
Minkow got money by dividing his accounts that he was receiving for work under contract. He also hired the reputable accountants and lawyers to make his image better and more reliable. In this way he fabricated contracts, altered his sales, and also took money for this organized crime. By use of all such means Minkow was making millions of dollars with his company. In 1986, this company was having the capital of over $200 million. And when being suspected, Minkow was in trouble when some officers came to inspect his offices.
To overcome this matter, Minkow borrowed fake offices for the officers and took them to the tour of “Interstate Appraisal Services”, also he hired one under construction building to show the restoration job. Minkow used $2 million to complete the building in few days. There were some problems but the investors were so impressed by Minkow that they were ready to neglect those problems. The Chief Financial Officer of the company was also the owner of a florist business. The company was accused of having stolen over $92,000 by charging flowers to customers’ credit cards without any authorization from them.
But young Minkow ignored all these as he was facing the
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This report spread in Los Angeles Times and the FBI found Minkow involved in all the organized crime. In 1987, the company was able to raise $40 million from the public offering. But as the matter of fact around 90% of the revenue shown was fake. And the surprising thing was that no one was able to catch it. Not even the team of auditors, lawyers, Underwriters, and even FBI. And as a result of all these matters the company was having the market value of over $300 million. The stock of the company rose to $18 per share.
During one conversation on the Oprah Winfrey Show, Minkow revealed his personal motto that was “sky is the limit” for him. This charming young boy now started his master plan that was to take his company public and his motive was to tap the bank accounts of investors from whole nation. In May 1987, a newspaper article charged Minkow with certain wrongdoings. The stock, however, continued to be actively traded on the NASDAQ exchange.
On May 19, 1987, a short article in The Wall Street Journal reported that ZZZZ Best Company, Inc., of Reseda, California, had signed a contract for a $13. 8 million insurance restoration project. This project was just the most recent of a series of large restoration jobs obtained by ZZZZ Best Company. The company went public in 1986 and Minkow and his some close associates became multi millionaires overnight. By late 1987, the company was having the market value of more than $120 million. Minkow was the youngest CEO and the richest young boy. At the very young age he owned a suburb in Los Angeles and a Fire engine red Ferrari.
His charm and smart mind made him the most wanted person on all the talk shows that presented him as the example for the American youth. He was shown as the example to show that what the America youth can gain if they want. Unlike most financial frauds, the ZZZZ Best scam was perpetrated under the watchful eye of the Securities and Exchange Commission (SEC). The scrutiny of the SEC, one of the largest Wall Street brokerage houses, a large and reputable West Coast law firm that served as the company’s general counsel, and an inter¬national public accounting firm had failed to uncover Minkow’s daring scheme.