Reuters (August 8)
“President Donald Trump is instructing agencies to scrap ‘reputation risk or equivalent concepts’ from the customer assessment equation.” Banks will like the reduction in paperwork, but this move will “make it harder to spot fraud.” Trump has already “rolled back enforcement of all sorts of financial misdeeds. Further clearing the way for more of them is a far bigger threat than the fanciful idea that profit-seeking banks turn away good business on purely ideological grounds.”
Tags: Agencies, Banks, Customer assessment, Enforcement, Financial misdeeds, Fraud, Ideological, Paperwork, Profit, Reputation risk, Threat, Trump
New York Times (November 18)
“An under-the-radar lawsuit has privately been a hot topic of conversation in Fortune 500 boardrooms and corporate security departments.” The suit by the SEC against SolarWinds and its chief information security officer appears to be the first lawsuit “in which the S.E.C. has charged a company with intentional fraud related to cybersecurity disclosures.” The suit suggests “boilerplate disclosures” are no longer “sufficient if the company knows of more specific risks.”
Tags: Boardrooms, Boilerplate, CISO, Corporate security, Cybersecurity disclosures, Fortune 500, Fraud, Lawsuit, SEC, SolarWinds, Specific risks, Under-the-radar
Wall Street Journal (March 25)
The aggregate M-Score index, which measures manipulation across corporate America “shows that the collective probability of fraud across major companies is the highest in over 40 years,” possibly foreshadowing economic downturn. “The theory is that their index might be catching distress in the stages when some companies are taking steps to try to cover it up…. The stock market might behave like the corporate sector is still humming along when in reality, its earnings are increasingly buoyed by tricks.”
Tags: Aggregate, Distress, Earnings, Economic downturn, Fraud, Highest, Index, M-Score, Major companies, Manipulation, Stock market
Financial Times (December 9)
“The Big Four accounting firms have recorded their strongest financial performance since the collapse of Enron as corporate clients rushed to transform their businesses during the coronavirus pandemic.” Revenues soared to over $167 billion, collectively, in spite of “continued criticism of the structure and performance of the firms, especially in audits, including scrutiny of EY’s failure to identify fraud at Wirecard.”
Tags: Accounting firms, Audits, Big Four, Clients, Collapse, Coronavirus, Criticism, Enron, EY, Failure, Financial performance, Fraud, Pandemic, Revenues, Scrutiny, Transform
Houston Chronicle (December 2)
Twenty years on, “Enron remains a cautionary tale of corporate hubris and fraud. It’s lessons still carry weight, especially as Theranos founder and CEO Elizabeth Holmes stands trial, accused of defrauding investors and patients about the viability and accuracy of its medical testing technology.”
Tags: Accuracy, Cautionary tale, CEO, Corporate hubris, Defrauding, Enron, Fraud, Holmes, Investors, Patients, Theranos, Trial, Twenty years
New York Times (September 9)
“The crypto revolution is bringing financial services to the unbanked, but not without risks.” The crypto “market is expanding quickly — in all sorts of directions,” giving rise to new “Shadow Banks.” Crypto customers “can earn much higher interest rates than at traditional banks, and they can borrow money, using crypto as collateral, often with no credit checks,” but the potential dangers include hacks, fraud, and the lack of FDIC protection for deposits.
Tags: Borrow, Collateral, Credit checks, Crypto, Financial services, Fraud, Hacks, Interest rates, Revolution, Risks, Shadow banks, Unbanked
Boston Globe (January 4)
“Trump’s crazy train reaches the end of the line.” So far, “not a single state or federal court has accepted the preposterous conspiracy theories floated by Trump and his supporters to explain his loss, ranging from zany stories of North Koreans smuggling ballots into Maine to supposed Sharpie malfunctions in Arizona. No election has been as thoroughly scrutinized as the 2020 vote, and even Trump’s own Justice Department acknowledges it couldn’t find any serious fraud, much less the vast plots of Trump’s imagination.”
Tags: Ballots, Conspiracy theories, Court, Crazy train, Fraud, Loss, Maine, North Korea, Preposterous, Scrutinized, Trump
USA Today (November 12)
“Sore loser Donald Trump claims he was cheated out of reelection. Where’s the proof?… The increasingly obvious answer is that the evidence does not exist. There is no proof of any widespread voter fraud, and surely not enough to overturn the results in a single state, much less the three or more states Trump would need to reverse the outcome.”
Tags: Cheated, Claims, Evidence, Fraud, Loser, Overturn Outcome, Proof, Reelection, Sore, Trump, Voter
The Economist (March 1)
Businesses can never fully eliminate fraud, but directors and executives must “treat it like any other unavoidable risk, and manage it professionally.” This means listening carefully to whistleblowers. “Three times as many frauds are discovered by tip-offs than by any other method…. Firms with fraud hotlines, which staff can call anonymously, suffer smaller losses from fraud, and cut by seven months the ‘exposure gap’ between the start of an illicit scheme and its discovery.”
Tags: Anonymous, Businesses, Directors, Discovery, Executives, Exposure gap, Fraud, Hotlines, Losses, Risk, Staff, Tip-offs, Whistleblowers
Forbes (February 5)
“The U.S. Justice Department announced plans to file civil fraud charges against Standard & Poor’s (S&P) relating to the atrocious ratings that Standard & Poor’s gave to toxic subprime mortgage-backed securities…. This is a welcome—if long overdue—development for investors who have been waiting for years for the Feds to take decisive action against those responsible for crashing the world economy.”
