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High- Risk Corporate Activities
and Market Manipulation
INTRODUCTION
In previous chapters we discussed a variety of issues facing directors in
searching for Red Flags indicating fraud, corruption, and other improper
activity within their organization. This chapter focuses on high- risk cor-
porate activities, including those involving start- ups and manipulations
of securities markets.
HIGH RISK WITH START- UP CORPORATIONS
Start- up public corporations have unusual risks for members of the board.
In these cases, a private corporation, partnership, or sole proprietorship
operated by a promoter or a group of promoters decides to go public. They
may have an ongoing business that has been successful on a small scale
or they may simply have a concept ...