40 Companies with the Most Aggressive Accounting Practices and the Highest Risk of Major Drops in Share Prices
New York – November 26, 2012 — GMI Ratings, the leading provider of research on environmental, social, governance (ESG) and accounting-related risks affecting the performance of public companies, today released its second “Black Swan Risk List”, identifying 40 North American companies with the highest risk of major drops in share prices within the next six months.
The list is included in the report (Behind the Masks of Accounting Fraud) posted today on the GMI Ratings website. Institutional investment managers, asset owners, insurance companies and other current and prospective clients are invited to download the complimentary report. These firms can use the list to gauge their portfolio exposure to issuers with the most aggressive accounting practices.
James A. Kaplan, GMI Ratings chief executive, noted: “We released our first Black Swan Risk List last week, a day before one of the companies on the list (Hewlett-Packard) announced an $8.8 billion write-down that reflected material misrepresentations and disclosure failures. Beyond validating the inclusion of HP on our risk list, the announcement provided the latest illustration of the importance of forensic accounting in the analysis of issuer risk.”
Kaplan added: “Our new Black Swan Risk List identifies 40 high-risk North American companies with market caps between $5 billion and $100 billion. Just as last week’s list, the new list identifies issuers with the most aggressive accounting practices based on our AGR® model. Inclusion in this list signifies an elevated risk of adverse events that can materially affect share prices.”
In the near future, GMI Ratings plans to add a Black Swan Risk List feature to its web-based research platform, GMI Analyst. This feature will allow subscribers to identify high-risk companies based on a variety of geographic, industry-related and other descriptive search criteria.
About GMI Ratings
GMI Ratings is an independent provider of research and ratings on environmental, social, governance and accounting‐related risks affecting the performance of public companies. The firm’s ESG ratings for nearly 5,500 companies worldwide incorporate 120 ESG KeyMetrics™ to help investors assess the sustainable investment value of corporations. The firm also provides Accounting and Governance Risk (AGR®) ratings and corresponding litigation probabilities for approximately 18,000 public companies worldwide. AGR metrics reflect the accuracy and reliability of a company’s financial reporting. Clients of GMI Ratings include leading investment managers, asset owners, insurers, auditors, regulators and corporations seeking to incorporate accounting and ESG factors into risk assessment and decision‐making. A signatory to the Principles for Responsible Investment (PRI), GMI Ratings was formed in 2010 through the merger of GovernanceMetrics International, The Corporate Library and Audit Integrity. In the 2012 Independent Research in Responsible Investment (IRRI) Survey conducted by Thomson Reuters Extel and SRI‐CONNECT.com, GMI Ratings was named “The Best Independent Corporate Governance Research Provider.” For more information please visit www.gmiratings.com.
Lev Janashvili (firstname.lastname@example.org); +1 212/949-1313 ext. 339)