Motive and Opportunity

  1. What was the motive (alleged or otherwise) that each defendant, including the defendant auditors, if applicable, may have had to commit the fraud?
    a. For example, was compensation tied to stock price, etc.
    b. Was the defendant company on an acquisition spree?
    c. Was there insider stock selling during the fraud period?
    d. Was the company having profitability or liquidity problems?
    e. Regardless of whether the auditor was named as a defendant, do you think it should have caught the fraud? If it should have caught the fraud, how could it have done so? If not, why not? Regardless of what you conclude, explain your response in depth.
  2. Opportunity: Management Override? Internal Control Weaknesses, tone at the top, etc.?
  3. Was the fraud concealed? If so, how? (e.g., there was at least one case, where it appears that the fraudsters recorded false entries that appeared immaterial to several accounts – this technique has the effect of not setting off analytic red flags).