What Jayson Blair and Stephen Glass did for newspapers, Bernie Madoff and R. Allen Stanford did for finance. Lying on balance sheets seems to be the new way to succeed in business -- for a while at least.
Another member of the fib list? Canopy Financial, a start-up that had received $85 million in venture capital from investors including Financial Technology Partners, an investment bank, and Spectrum Equity Investors, a PE firm. The firm was flying high -- it ranked No. 12 on the 2009 Inc. 500 list and its CEO, Vikram Kashyap, claimed revenues of $9 million in 2007.
As it turns out, Canopy may have been faking its financial statements all along. And not just any old financial statements -- forged audited statements with a fake KPMG letterhead. Spectrum invested $62.5 million in the company, and it's rumored that the PE shop has already filed a lawsuit to recover its funds.
Note to investors: Always check out with whom you're planning to invest. Checking in with the supposed accountants wouldn't hurt, either.
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