{"id":14263,"date":"2023-02-21T14:07:29","date_gmt":"2023-02-21T19:07:29","guid":{"rendered":"https:\/\/jasonapollovoss.com\/web\/?p=14263"},"modified":"2025-09-05T15:03:46","modified_gmt":"2025-09-05T21:03:46","slug":"case-study-patisserie-valerie","status":"publish","type":"post","link":"https:\/\/jasonapollovoss.com\/web\/2023\/02\/21\/case-study-patisserie-valerie\/","title":{"rendered":"Case Study: Patisserie Valerie"},"content":{"rendered":"

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It is a frequent refrain among deception scientists that all people engage in deception, and on average, about twice per day. Most deceptions are harmless and of the social variety, such as, \u201cHow are you?\u201d asked of a friend who replies with low energy, \u201cGreat.\u201d Typical deceptions are about things we just are not comfortable talking about, including companies not wanting to discuss the underperforming parts of their business. This is why having an objective, scientific assessment of the entirety of the comms of a company is important. Take, for example, the case study of Patisserie Valerie.<\/span><\/p>\n

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About Patisserie Valerie Fraud<\/strong><\/span><\/h3>\n<\/div>\n

Patisserie Valerie is a chain of cafes in the UK that was founded in 1926. According to Wikipedia, on 10 October 2018\u00a0trading in Patisserie Valerie stock was suspended<\/a>\u00a0after the discovery of potentially fraudulent accounting practices. Because of\u00a0the gap between its reported financial status and its actual financial status<\/a>it needed an immediate injection of capital to save itself. In other words, a crisis materialized almost out of nowhere.<\/span><\/p>\n

How could a fraud like this have been caught by investors? After all, outright fraud is incredibly hard to detect because investors are reliant on the published quantitative performance of a company. At Deception And Truth Analysis (D.A.T.A.) we have several possible solutions:<\/span><\/p>\n

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  1. We know from having assessed every quarterly and annual report of US equities dating back to 2008 that the average % of quantitative information in these documents is just 1.7%. Said another way, 98.3% of the contents of these regulatory documents is text. Thus, if you want to detect fraud, you ought to have the ability to assess the qualitative information, too.<\/span><\/li>\n
  2. In our work researching the ten largest scandals of all time, we were able to detect deception at these firms with an average lead time of 6.2 years. How is that possible? We are not entirely sure, but our theory is that numbers \u2013 which most investors rely upon to assess for possible fraud \u2013 are outcomes. These outcomes are driven by management choices. In turn, those choices are driven by managements\u2019 behaviors. Consequently, if you want to evaluate fraud, you should have a way of evaluating the behaviors, such as deception, of management.<\/span><\/li>\n<\/ol>\n
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    myDATA Analysis of Patisserie Valerie<\/strong><\/span><\/h3>\n<\/div>\n

    There are several crucial assists provided by Deception And Truth Analysis in an assessment of any company:<\/span><\/p>\n

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    1. Our myDATA product allows almost any document to be assessed for its level of deceptiveness and truthfulness.<\/span><\/li>\n
    2. DATARED<\/strong>line provides a running assessment of deceptiveness and truthfulness through documents so investors can identify where a company is being deceptive, and where it is being truthful.<\/span><\/li>\n
    3. Assessing multiple documents in time series provides investors with key insight about the changes and evolution of narratives at a company through its operating history.<\/span><\/li>\n<\/ol>\n

      D.A.T.A.\u2019s myDATA assessment of Patisserie Valerie\u2019s formally filed \u201cGroup of Companies Accounts<\/a>\u201d (i.e. UK companies annual report) found DATA Scores of:<\/span><\/p>\n