A blog by Martin Williams, external affairs spokesman of Graydon UK, focusing on business risks - from fraud to late payment. Martin has has spent the last 35 years in the credit information industry, and has been with Graydon UK, one of the top five commercial credit agencies in the UK, for the last 20. Apart from his PR duties, he teaches credit analysis to risk professionals and helps educate SMEs on the importance of maintaining a good credit rating. Martin is a Fellow of the Institute of Credit Management and is a sitting member of the Institute's Think Tank. He was also honoured by Credit Today, after being included on their Credit 100 list of people who have had the greatest impact in the credit industry during 2008, 2009 and 2010.
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15 Dec 2008
So, a former well respected head of the Nasdaq stock exchange has admitted to his companies perpetrating a 50 billion dollar fraud, with the banks around the world suffering the biggest hits. Apparently Bernard Madeoff , sorry, Madoff, was paying investor returns ,not out of profits made by his funds, but with new investor money. He has described his organisation as "one big lie".
Cries are ringing out that this is yet another example of a systemic breakdown in the US regulatory and securities market regimes. After all, this guy has been trading this way for years without anyone detecting anything was wrong!
But is there any new lesson to be learned from this con coming to the surface?
It became abundantly clear as the sub prime mortgage crisis unravelled last year that in this high tech, global economy, an unbridled and unregulated financial market can bring the rest of the real economy to its knees. It has to stop!
Visitor comments
Yes, it does teach us something new! Professional judgement should be paramount in the Audit field. In the past few years the trend has been towards form filling & filing and greater use of technology in order to comply with volumes of standards and rules & regulations. The result was time constraint, leading to mechanical use of technology, filling of checklists without thought, understanding the clients and the business.
The rules and regulations came in tons of volume after Enron, expecting these rules will prevent another Enron.
Values and Integrity has to be brought back to the Finance profession, where ever they work or practice.
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Posted by: forex , 14 Sep 2010
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