LONDON/NEW YORK, Nov. 22 (Thomson Reuters Accelus) — When the young UBS trader Kweku Adoboli turned himself in after allegedly having lost $2.3 billion on the Swiss bank’s delta one desk, many asked how such a huge loss could have happened without anyone knowing. The short answer was, in part, that Adoboli’s back-office experience gave him inside knowledge which permitted him to game UBS’ control systems and hide the fraud. The same excuse was trotted out to explain Jérôme Kerviel’s $6.8 billion loss at Société Générale in 2008, but it must surely take more than a stint in the bank office to fool banks’ risk controls systems.
Financial Regulatory Forum
NEW YORK, Nov.16 (Business Law Currents) – Off balance sheet items and undisclosed liabilities are coming back to bite companies, as repo-to-maturity disclosures prove to be a jarring reminder of pre-crisis risk proclivity.
By Emmanuel Olaoye
NEW YORK, Nov. 8 (Thomson Reuters Accelus) – The collapse of MF Global and charges that millions of dollars are unaccounted for highlights the challenges that powerful corporate executives pose to a firm’s governance controls, experts said.
By Liz Osborne, Thomson Reuters Accelus contributing author
Nov. 7 (Thomson Reuters Accelus) – These days most people are aware of the dangers of someone stealing and misusing their identity to perpetrate fraud — but less people are familiar with the equivalent crime at a corporate level. Corporate identity theft (CIT) is the fraudulent and deliberate misrepresentation of a company’s identity. It is sometimes also referred to as a “white-collar crime” as it is generally conducted in a “cyber environment” and is not the domain of the stereotypical burglar.
NEW YORK (Thomson Reuters Accelus) – Charges that hundreds of millions of dollars are missing from the accounts of MF Global’s clients raise the question of whether powerful executives at the firm influenced the independence of internal auditors as the futures brokerage scrambled for survival.
Nov. 1 (Thomson Reuters Accelus) – The collapse of MF Global Holdings is the first major U.S. financial bankruptcy since new Dodd-Frank insolvency laws ended the doctrine of “too big to fail,” as well as being the first U.S. failure attributable to the Euro crisis. While the collapse is expected to be handled under pre-Dodd Frank bankruptcy laws and under the Securities Investor Protection Corp., it may signal that regulators are prepared to take earlier action when they see uncovered financial risks.
The financial thriller, “Margin Call,” which opened in movie theaters on Friday, tells the story of a firm in the mold of a Bear Stearns or Lehman Brothers at the height of the financial crisis. The firm in the film is akin to real-life firms that seemingly discover too late their reliance on a culture built on growth at any cost and tainted models at the expense of risk management.
By Thomson Reuters Accelus staff
NEW YORK, Oct. 19 (Business Law Currents) – Banking lawyers should be forgiven if they’re not returning calls right away: they’re busy trying to digest the Volcker Rule (or “the rule”). The proposed rule’s 298-page doorstop represents the collective efforts of the Treasury Department, Fed, FDIC and SEC to implement §619 of the Dodd-Frank Act, which itself added a new §13 to the Bank Holding Company Act of 1956 (the BHC Act). The intent of the Volcker Rule is to “generally prohibit any banking entity from engaging in proprietary trading or from acquiring or retaining an ownership interest in, sponsoring, or having certain relationships with a hedge fund or private equity fund (“covered fund”), subject to certain exemptions.”
By Patrick Conroy, James Overdahl, Robert Patton and Raymund Wong; NERA Consulting, Thomson Reuters Accelus contributing authors. The views expressed are their own.
NEW YORK, Oct. 12 (Business Law Currents) – The first half of 2011 saw rebounding credit markets and an uptick in debt issuance. Due to uncertain economic conditions in the second half of 2011, however, even the most fundamental aspects of loan documentation are facing increasing scrutiny. Representations & warranties that were more routine and non-contentious transformed into significantly stricter provisions as a result of the credit crisis.