StudentShare solutions
Got a tricky question? Receive an answer from students like you! Try us!

Research Paper example - How Individual Firms Can Prevent A Leeson Incident From Happening To Them

Only on StudentShare
Research Paper
Finance & Accounting
Pages 10 (2510 words)
This paper aims to examine how the United Kingdom changed its laws in response to the scandal, by examining the new regulations that have come about to address the Leeson affair. By this research, firms may be able to take the steps necessary to prevent this from happening to them…

Extract of sample

This research paper tells that the collapse of Baring Bank was primarily due to one rogue trader, named Nick Leeson, who was making fraudulent transactions. Leeson occupied a great deal of power in Barings Limited, as he was both the Chief Trader and Head of Settlements, which means that he could make any trades he wanted without any oversight – the fox was in charge of the chicken coop, so to speak. What this essentially meant was that Leeson was able to cover up losses and report them as gains, because, as Head of Settlements, which was in charge of reporting trading losses and errors, he was able to be dishonest in this way. This was brought to the attention of the auditors, which stated that this set-up provided great risk, but Barings did nothing to rectify it. In the end, it was this lack of governance that proved to be the undoing of the firm, as Leeson single-handedly brought the bank down. The Leeson affair was caused by a number of different factors. First, according to Hoch & Kunreuther, bad decisions played a large part in fomenting the conditions under which the scandal occurred. One of the bad decisions was on the part of the managers, who looked the other way regarding Leeson because their emotions got in the way. The managers liked Leeson, as he initially was successful in trading, and the emotion of greed got in the way of closely scrutinizing him. Moreover, Leeson had very little experience in trading, and he had some personal bad debt that was not disclosed in his application for a trading license. ...
Download paper
Not exactly what you need?

Related papers

Rogue Trading within Bank Industry about Nick Leeson
The research tells that corporate scandals can be of different types and in any kind of corporate scandals generally top executive managements are involved due to personal gains and other biasness. Corporate scandal may include the offences like frauds, insider trading, manipulation of financial statement for misguiding stakeholders, excessive compensation to top executives etc. Among these rogue…
10 pages (2510 words)
‘Blaak’ brands are much accommodative since they can go hand in hand with most colours and blaak simply was for the transformative quality of the colour. BLAAK has spread its geographical brand to Asia, US, Oceanic with new markets emerging in Africa. BLAAK philosophy remains but the visions has widened and now include other creation with colours other than black, and with the combination of…
7 pages (1757 words)
Political Environment of Firms
Brazil Aerospace It got started when the government gave technological support to private firms through the Centro Tecnico da Aeronautica (CTA) established in 1947 in Sao Paulo, being the most advanced research institution among the industrializing countries. The state allowed private ownership to the production of aerospace but gave the technological support and increased allocation of resources…
5 pages (1255 words)
individual Assignment
The company chose to deal with water, a vital commodity over which, because of public interest, they could not raise prices too high without becoming the target of negative sentiments. This means that MIBW4A will be trapped perpetually in narrow profit margins. Underreporting is a real concern, because there is no way for MIBW4A to oversee sales. The revenue sharing agreement, where water vendors…
5 pages (1255 words)
Capital structure theory, issues and debates while showing how capital structre choices affects a firms return on investment (RO
In this portion, the MM approach for the capital structure theory has been described, and the assumptions have been stated and criticized. The main objective of this project is to show the importance of the capital structure of a company and its affect on the performance. A detailed analysis of the debt and equity financing has been done in this project from 2010 to 2012. Their implications have…
How do US auto firms evaluate the comprehensive and long term viability of investing in Information Technology projects that len
Aptness of the process of decision making is justified by the methodological fitness of the decision to the demand of the concerned situation, reliability of the evidence used for decision making, relevance of the decision to context, transparency in the findings and the extent up to which consensus reached within the decision making individuals. In this paper the mixed method of research has been…
12 pages (3012 words)
individual assignment
It has five branches in major cities in the nation and the head office is in Abu Dhabi. The central bank has seven departments which include Banking operations, Banking supervision and Examination, Financial control, treasury, Research and statistics, Administrative affairs, internal audit. The similarity between European central bank and GCC central bank is that both have established single…