The Forensic Factor is Negative on AutoChina

In a blog post on Seeking Alpha The Forensic Factor was negative on AutoChina (NASDAQ: AUTC).

In the post, TFF speculated that the company would eventually be halted, delisted, and "ultimately be another sub-five dollar tragedy."

TFF stated that it was likely that AutoChina's management team had committed Securities fraud, writing, "We spent considerable time discussing the unusual earn-out for the CEO. Aside from creating horrific incentives for management to use aggressive accounting tactics to meet earn-out targets, it was our belief that the earn-out was 'not currently treated in accordance with GAAP.'"

TFF drew comparisons to previous fraud RINO International, stating that an abundance of paper accounts on the balance sheet indicated a potential fraud.

TFF also raises concerns over hidden expenses and a variety of other questionable financial statements: for example, out of 23,000 leases only 20 are listed as in default.

Read more here.

AutoChina is currently trading near $25.80, down 0.50% on the session.