Free WiFi provider admits to making up 90 percent of its revenues

If you live in San Francisco or New York, you likely know you can connect to free WiFi in certain locations. Your cities' governments partnered with Madrid-based provider Gowex to make that happen -- the same company that has recently admitted to doctoring its accounts for the past four years. Gowex might be an unknown to most of us, but it was considered a success story in Spain and performed really well at Madrid's Alternative Equity Market, a stock exchange for small companies. A few days ago, though, a short seller named Gotham City Research published a report that claims 90 percent of the company's revenues are falsified and that it actually earns only 10 percent of what it says it does.

While Gowex initially denied the accusation and even announced that it earned 182.6 million Euros ($248 million) in 2013, company president Jenaro Garcia ultimately admitted the allegations and resigned from his position. On his Twitter page, Garcia wrote:

The company used to claim that it makes its money from partnerships with local governments that want to use its free WiFi services, carriers that use its hotpots to offload data and from premium fees, among other things. It's unclear what will happen to its hotspots in NYC and San Francisco, but the cities will likely have to look for another provider now that Gowex has filed for bankruptcy.