Madoff: Lessons from a Disaster April 29, 2009
Posted by dogmatix76 in Uncategorized.Tags: Frauds, Madoff, Ponzi, Scams
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Amid the wreckage and recriminations, investors are left wondering what might warn them of the next mega-fraud
On Mar. 12, victims of Bernard Madoff’s Ponzi scheme finally had one of their wishes come true. After a judge denied bail, Madoff is going directly to jail, and he isn’t passing “go.” But Madoff’s victims still want answers.
They want to know where the money went. They want to know who else was involved. And they want to know how they got scammed.
At the courthouse, many victims said there were no warning signs and Madoff himself, in his courtroom statement, backed them up on at least one count. “The clients receiving trade confirmations and account statements had no way of knowing by reviewing these documents that I had never engaged in the transactions,” Madoff said during his guilty plea.
Maybe not. But to Harry Markopolos, the risk manager who alerted the SEC to Madoff’s fraud in 1999 to no avail, the foul play seemed obvious. Madoff was supposedly using a complex trading system to generate returns, a strategy he dubbed the “split-strike conversion strategy.” He would buy stocks in the Standard & Poor’s 100 and sell options to reduce volatility. But Markopolos’ firm was running a similar strategy and couldn’t match the returns. A look at the returns was all it took for Markopolos to know something was up.
The World’s Most Influential Companies December 21, 2008
Posted by dogmatix76 in Uncategorized.Tags: Brands, Companies
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In a year of loss, they’re building market share, upending their industries, and changing consumers’ lives
By Jena McGregor
December 11, 2008, 5:00PM EST
“Power lasts 10 years,” goes an old Korean proverb. “Influence, not more than a hundred.”
In a year that brought the mighty to their knees, some of the biggest players in business have seen their power whittled away. The once-venerated Lehman Brothers filed for bankruptcy in September. American International Group (AIG) now bows to government officials after nearly collapsing under a web of risky bets. Even the blue-chip General Electric found itself going hat-in-hand to Warren Buffett.
As the proverb points out, influence has a shelf life, too. And it’s probably getting shorter as the cycle of change accelerates. Companies that once wielded a seemingly unshakeable hold over their industries—General Motors (GM), Sony (SNE), Microsoft (MSFT)—now find themselves following the lead of more nimble players such as Toyota (TM), Apple (APPL), and Google (GOOG). “There’s no standing still,” notes veteran strategy guru Gary Hamel. “Influence is like water, always flowing somewhere.”
Everything We Learned about the Financial Crisis, Again December 20, 2008
Posted by dogmatix76 in Uncategorized.Tags: FInancial Crisis
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The nation’s top accounting guru gets back to basics with a list of financial lessons we must remember not to forget.
Tim Reason and Marie Leone, CFO.com | US
December 9, 2008
At the last big accounting industry conference of 2008, Robert Herz, chairman of the Financial Accounting Standards Board, reiterated what he has been saying all year: It was not fair-value accounting that worsened the credit crisis, but rather a capital markets house of cards built on complex and risky securitization structures linked to subprime mortgages.
Though Herz’s speech to the American Institute of Certified Public Accountants was not entirely new (he first rolled out a version of it September), it represents a significant review of what went wrong with the nation’s economy from the perspective of the nation’s top accounting standard setter. And while peppered with the FASB chairman’s trademark dry wit, the speech is a serious one. “I hope I don’t offend anyone with my frank assessments,” Herz began, before condemning the behavior that led to the current crisis — as well as much of the finger-pointing that occurred afterwards. Few players were spared criticism, which he leveled at investors, regulators, credit rating agencies, boards of directors, bankers, Wall Street, and even some of FASB’s own accounting standards.
U.S. to Take Over AIG in $85 Billion Bailout; Central Banks Inject Cash as Credit Dries Up September 17, 2008
Posted by dogmatix76 in Subprime Crisis, Uncategorized.Tags: Financial rescues, US Federal Reserve
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Emergency Loan Effectively Gives Government Control of Insurer;
Historic Move Would Cap 10 Days That Reshaped U.S. Finance
By MATTHEW KARNITSCHNIG, DEBORAH SOLOMON, LIAM PLEVEN and JON E. HILSENRATH
The U.S. government seized control of American International Group Inc. — one of the world’s biggest insurers — in an $85 billion deal that signaled the intensity of its concerns about the danger a collapse could pose to the financial system.
The step marks a dramatic turnabout for the federal government, which had been strongly resisting overtures from AIG for an emergency loan or some intervention that would prevent the insurer from falling into bankruptcy. Just last weekend, the government essentially pulled the plug on Lehman Brothers Holdings Inc., allowing the big investment bank to go under instead of giving it financial support. This time, the government decided AIG truly was too big to fail.
