The Short Sellers Digest: Weekly insights powered by accounting quality

This weekly article curates notable short-seller reports and executive resignations, enriched with Transparently.ai's proprietary Risk Ratings to help investors quickly assess the accounting quality and potential red flags in public companies.

The ratings are a proprietary measure of accounting manipulation risk, assigned as a letter grade from A+ (representing high-quality accounts) to F (indicating extreme risk). A lower letter grade (e.g., D, E, F) suggests a greater likelihood of aggressive accounting practices or potential financial misrepresentation and warrants closer investigation. 

Please see the appendix below for further explanation. 

Note: Our model is not designed to provide ratings for financial institutions due to their unique accounting and regulatory frameworks. This article should not be construed as investment advice.

We will be updating this article regularly, which over time will develop into a living archive of market controversies and risk signals that investors and asset managers can use to spot patterns, track red flags, and inform smarter stock picking.

Oct. 6, 2025

Appendix: Transparently.ai methodology and Risk Rating interpretation

Transparently.ai utilizes an advanced, AI-driven forensic-accounting model to assess the accounting manipulation risk of publicly-listed companies worldwide. This proprietary model is trained on extensive historical fraud and failure data, enabling it to identify patterns and indicators of potential financial misrepresentation within a company's financial statements. The assessment is based on a comprehensive analysis of numerous financial and non-financial factors, grouped into various clusters, which collectively contribute to an overall risk score.

Our risk ratings are presented as letter grades, ranging from A+ to F, providing a clear and concise indication of a company's accounting quality:

A+ to B-: These ratings generally signify good to acceptable accounting quality, with lower levels of identified accounting manipulation risk.

C+ to C-: Companies in this range exhibit a moderate level of accounting manipulation risk, suggesting that some aspects of their financial reporting might warrant closer examination.

D to F: These ratings indicate significant to extreme accounting manipulation risk. Companies with these grades are flagged for a higher likelihood of aggressive accounting practices or potential financial misrepresentation and should be investigated thoroughly.