In the capitalist market economy savings, which seek capital gain and dividend, are channeled to business enterprises, which need financial resources for business creation and expansion. Capital markets play a key role in this circulation of financial resources. Investor's decision depends on the information that is publicly available and it is theoretically assumed that business enterprises publicly disclose full and complete information of their present and future value. In actuality, however, the financial disclosure is not always full and complete. It might intentionally hide information implying risk for investors. When ENRON boasted "tremendous opportunities for growth" in the 2000 annual report, it was already known to the insiders that their overseas ventures in the U.K., Azurix project and the Dabhol power plant in India had caused the corporation an enormous loss.
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