Allen Stanford was, at one point, a successful entrepreneur whose investment company’s accounts totaled in the billions. The aforementioned keyword is ‘was.’ As CEO of Stanford Financial Group, Stanford essentially ran a massive Ponzi scheme; he issued certificates of deposit at an offshore bank that he controlled and illegally used the investors’ funds. These CD’s were appealing to investors due to their high returns of nearly twice the average rate of return of investments in U.S. banks. Investors were led to believe that these CD’s had such high returns because they were being invested in corporate stocks, real estate, hedge funds, and precious metals (BusinessWeek). The SEC eventually uncovered Stanford’s fraud in 2008. Stanford was In 2007, Stanford’s various companies were running net operating losses of over $30 million (Madoff). Stanford had to personally keep the company afloat. The complaint against Stanford alleged that, “70% of its 2007 operating revenues through referral fees earned from SGC’s sales of SIBL CDs.” BDO did not verify the existence of these CD’s or Stanford’s assets or income. The success of the company was riding solely on the sale of certificates. If BDO fulfilled its obligations of verifying existence, completeness, and correct valuation of these CD’s, an unqualified opinion would have been impossible. Investors’ auditors would have been able to see these red flags and BDO would have been able to detect that the securities were not able to bring in a profit by performing analytical procedures. BDO also did not correctly assess risk. Inherent risk was present because of management’s objections and increasingly ineffective investing. Independent controls testing was also necessary but not implemented. Part of BDO’s responsibility was to test the internal controls and confirm that the funds intended to purchase the CD’s were used for that purpose. Instead, BDO concealed such information and contributed to the fraud (PonziBook).
If I were to advise clients regarding investing in off-shore banks like Stanford’s, I would refer to the statement, “If it seems too good to be true, it probably is.” Stanford’s rates were double the average 2%
TUI UNIVERSITY Module I: Case Assignment FIN301: Principles of Finance October 31, 2011 Introduction For the following Case Assignment, I will investigate if the finance departments are the best place to train future CEO’s. In addition, I will include a discussion of the pros and cons of hiring a CFO to be CEO. Also, I will provide two actual examples of CFO’s of publicly-traded companies who became CEO’s of publicly-traded companies within the past 5 years. Furthermore, I will research…
if this decision could possibly bring harm to anyone? In this case the answer would be yes, the harm would be towards the integrity of company, its employees and the general public. This problem would also hurt investors by causing massive financial losses. The next questions we ask is whether or not this issue goes beyond any legal concerns or not? Could choosing to conceal debts and faking receipts cause legal problems? In this case it is called fraud and is against the law. They deceived the…
Orsini Bus 309- Business Ethics August 20, 2014 Assignment 2: The World’s Most Ethical Companies Google is the fastest growing internet company in the world. Google was created by Larry Page and Sergey Bin while there were students at Stanford University. Their mission statement was "to organize the world's information and make it universally accessible and useful." The company has purchased many companies and has also partnered with companies in research and advertising. Through it, all…
the RISC-II , that had 40,760 transistor, 39 instruction in 1983, and ran over three times as fast as RISC-I. The MIPS architecture (Microprocessor without Interlocked Pipeline Stages) came from a graduate course lectured by John L. Hennessy at Stanford University in 1981, resulted in a functioning system in 1983, and could run simple programs by 1984. The MIPS system was followed by the MIPS-X and in 1984, Hennessy and his colleagues formed MIPS Computer Systems. (The company was purchased by…
may be subject to its inspection program, which will only evaluate the SEC issuer or public company audit practice. All firms will continue to require peer review of the rest of their auditing and accounting practice in order to satisfy AICPA membership, federal regulatory (e.g., Generally Accepted Government Auditing Standards) and/or state licensing requirements Inspected Firms As of July 27, 2012, 2,398 public accounting firms, including U.S. firms and non-U.S. firms, are registered with the…
MANAGEMENT CONTROL SYSTEM BY BCCI For IPL In partial fulfillment for the requirement of “Management Financial System” course in two years full time Masters of Business Administration (MBA) programmed of Gujarat Technological University (GTU) Prepared By: Jatin patel [09059] Vineet Modi [09042] Sheenam Gupta [09025] Pranav Shah [09087] Harsh Rajwani…
1. Those who work on issues of ethics are among the few professionals not suffering from the current economic downturn. The last decade has brought an escalating supply of moral meltdowns in both the for-profit and the nonprofit sectors. Corporate misconduct has received the greatest attention, in part because the abuses are so egregious and the costs so enormous. Chief contenders for most ethically challenged include former Merrill Lynch & Co. CEO John Thain, who spent $1.22 million in 2008 to…
Corporate Governance: The international journal of business in society Managing legitimacy issues in global supply chains: the case of the athletic footwear industry André Nijhof Dai Forterre Ronald Jeurissen Article information: To cite this document: André Nijhof Dai Forterre Ronald Jeurissen, (2008),"Managing legitimacy issues in global supply chains: the case of the athletic footwear industry", Corporate Governance: The international journal of business in society, Vol. 8 Iss 4 pp. 506 - 517…
SEBI, Banking sector 3 The Budget preparation and presentation, factors influencing the annual budget, role of (5) subsidies and foreign exchange reserves 4 Companies, balance sheets, AGMs window dressing of balance sheets, the loopholes (the case of Satyam) (5) 5 Stock exchange, Sensex and its ups and downs, need for stricter monitoring, how to (5) cover Stock Exchanges, qualities of a good stock exchange reporter 6 Ethics for…
CONTENTS: CASE STUDIES CASE STUDY 1 Midsouth Chamber of Commerce (A): The Role of the Operating Manager in Information Systems CASE STUDY I-1 IMT Custom Machine Company, Inc.: Selection of an Information Technology Platform CASE STUDY I-2 VoIP2.biz, Inc.: Deciding on the Next Steps for a VoIP Supplier CASE STUDY I-3 The VoIP Adoption at Butler University CASE STUDY I-4 Supporting Mobile Health Clinics: The Children’s Health Fund of New York City CASE STUDY I-5…