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NQ Mobile shares fall after auditor dismissed

NQ Mobile, a Chinese mobile security software maker facing allegations of fraud from short-seller Muddy Waters Research Group, said it dismissed PricewaterhouseCoopers Zhong Tian as its independent auditor.

NQ shares fell in trading on Friday. (Click here for the latest quote.)

PricewaterhouseCoopers Zhong Tian told the company in June it needed to expand the scope of NQ's 2013 audit, days after the company said an independent committee had found no evidence of fraud.

NYSE EuroNext flag hangs outside the NYSE.
Adam Jeffery | CNBC
NYSE EuroNext flag hangs outside the NYSE.

NQ did not give a reason on Friday for the dismissal of PricewaterhouseCoopers Zhong Tian but said it had hired Marcum Bernstein Pinchuk as its new auditor.

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The stock has been volatile since Muddy Waters published its report in October, plunging from a high of $25.90 just before the report to a low of $4.13 earlier this month.

The stock is heavily shorted, with more than a quarter of its outstanding shares in short positions.

Short-sellers make money when the stock price of a company drops. They sell borrowed shares in the hope of buying them back at a lower price, returning them to the lender and pocketing the difference.

—By Reuters

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