Primed for fraud

Article Abstract:

Accountants should be wary of potentially fraudulent schemes that invite investors to trade in financial instruments that are backed by so-called prime bank guarantees. These schemes typically offer investors high returns with seemingly little risk because they involve standby letters of credit (SLCs) that are backed with what seem to be ironclad bank guarantees. However, as many investors have discovered to their regret, these seemingly failsafe deals are often fraudulent in nature and can lead unwary investors to incur millions of dollars in losses. It may be a measure of the sophistication of these SLC-based fraudulent schemes that investors are believed to have lost over a billion pounds sterling in the 1990s alone. These type of frauds fall into three basic categories: those that involve the issuance of fake securities, those that involve the use of documentation related to fake instruments, and the sale of such fake securities to unwary investors.

Methods, Crimes against, Fraud, Investors

---

The bonanzas and the burdens

Article Abstract:

The collapse of Barings has affected the way other merchant banks, their clients and accountants operate. Smaller merchant banks reportedly lost some funds but not as disastrously as was expected. Big merchant banks, on the other hand, are relatively untouched by the Barings fiasco. Nonetheless, clients of these institutions are said to be transferring their accounts to other banks with sufficient backing from wealthy parent companies. In response, banks are discarding their derivatives business, making sure that their clients know this. They are also implementing tighter controls, resulting in increased business for accountants. To help accounting firms deal with these added responsibilities, the Assn. of Corporate Treasurers, the Futures and Options Assn, and the Auditing Practices Board have all released guidelines. New regulations are also about to be introduced to further strengthen the internal controls of organizations.

Investment Banking and Securities Dealing, Investment Banking, Security brokers and dealers, Standards, Management, Investment banks, Accounting, Merchant banks, Barings PLC

---

Banking on the ethical impulse

Article Abstract:

The Co-Op Bank has shown that companies can embrace ethical policies and raise profits at the sametime. Since its adoption of a new ethical principle in 1992, the bank has transformed a prior loss of three million pounds sterling into a six-million-pounds profit and has achieved a retail deposit increase of 13%. The decision to appropriate an ethical policy is the result of a 1991 survey ofits 1.5 million account holders, 80% of which expressed their agreeability to such a program. The major provisions of the policy are that the Co-Op Bank willnot furnish finance or services to assist tyrranical regimes abroad, experiments using animals for cosmetic purposes, factory farming, blood sports or the production of tobacco goods. Although it would be doubly difficult for large banks to implement such policies, Co-op Bank Managing Dir hopes that competition will follow suit.

Ethical aspects, Co-Operative Bank PLC

Similar abstracts:

• Abstracts: A time for patience. The growl of the bear. Market predictability becomes a random walk
• Abstracts: The fraud chasers. Beyond the boredom threshold. The intriguing case of a murder mystery creator
• Abstracts: A pep for trusts. Little and often. Repaying mortgages, finding the school fees
• Abstracts: Crash course. The deal of the cards. Fleet management
• Abstracts: Management theory in translation. The business of design. GM's current woes reveal the price of corporate arrogance and amnesia

This website is not affiliated with document authors or copyright owners. This page is provided for informational purposes only. Unintentional errors are possible.