October 12, 2020
Respectable SEC chairman,
I am an educated investor with double CPA qualifications (CPA from Australia and CGA from Canada with a Master degree in Accounting).
I have been following up and researching on GSX case since April this year. I have been in correspondence with SEC senior counsel Mr Steven Johnston and Deloitte Ethics Asia Pacific division head officer Ms Nikki Scott-Smith. I even received two emails from Deloitte US talent recruiting team as a result of my high quality work.
However, with more than enough evidence that GSX is the creator of the extensive Chinese online education brushing operations (with 129 million K12 students population, China has more than 2 billion registered online education users, GSX's 3 core operational APPs: sky-school focus on fake students operations, Mini-Lion brush revenues through third party marketing firms, U-league is an outright illegal education Multi-Level-Marketing tool), GSX founder Larry Chen was exposed in 2015 of requesting his employees brushing, failed to B round capital raising in China, dismissed 80% employees in December 2018, then started US IPO process in January 2019 claiming "we had limited accounting personnel to detect financial fraud."
I have presented all evidence in my possession to both SEC and Deloitte, suggested that even brushing is highly deceptive because it involves real cash and stolen user IDs, GSX true revenues can be identified by tracking to its payroll records. All GSX tutors are salesmen, their monthly salary commission payment is documented and signed off by their supervisors, therefore, provide a complete audit trail. GSX's only business is online education, therefore, the process should be simple and straight forward. But after such long time, there is no news.
Many people advocate publicly that fraud companies are the best investments, because they yield best return and SEC as a political party simply wouldn't care. It's evident that many stocks in the US market are no more than a gamble place. People are screaming evidence of stock manipulation everyday, but SEC wouldn't act.
I am deeply disappointed in our regulators's administrative capabilities. The fact is people doing their research and trade on fundamentals lose, these people following the trend win. The US market is already deeply off to fundamentals of investment.
Even though I am deeply disappointed but I still hope to hear back from you soon
Yours' truly
Kate Clingenpeel