Chinese media company Xinhua Sports & Entertainment (formerly Xinhua Finance Media) listed on the NASDAQ in March 2007. A few months later, in May, a press article revealed that the company's CFO had been accused of other improper behaviour relating to securities violations. This led to his resignation and a 40% decline in the company's share price. Later that month, short-seller Citron Research raised corporate governance concerns, leading to further falls in the company's share price. From 2009 onwards, financial performance began to deteriorate and by February 2011, it appointed receivers. In May 2011, former management were charged and subsequently convicted of defrauding the US SEC, investors and others and to enrich themselves through a series of undisclosed and disguised related party transactions and insider trading that generated proceeds in excess of $50m. As such, Citron's allegations were confirmed. 

Last updated March 2022

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