Archive for the 'General' Category

What did Madoff do?

I have been asked this question many times over and each time I explain it, I think to myself, how did he get away with it for so long?
Madoff sold himself as an excellent investor, giving excellent return for clients, which then helped enlist further investors into his securities business. But what Madoff was actually doing was performing a very elaborate Ponzi scheme. This is where clients give an investor a large amount of money to invest for them and each month or year payout a percentage back to the client as their dividend as the investment matures. But this dividend is actually money gained from other clients investments. It is very similar to a pyramid scheme. This works for so long until the money dries up and clients wish to cash in their investments. This is what happened in Madoff’s case. When the credit crunch hit, clients wanted to cash in their investments, leaving the restriction of cash being unavailable to pay the dividend to clients.
It is estimated that the actual net fraud to be $10 – $17 Billion.

Posted by Paul
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Management Reporting – The essence of all good businesses

In any type of business it is important that the correct people get the correct information in the most concise format that is why it is vital for companies to introduce a Knowledge Processing System (KPS). This will enable strategic information to travel efficiently through the veins of the company without the onset of communication deflection (CD) occurring. CD could lead to unmanaged data being misinterpreted, clouding decision making, as always prevention is better and easier than cure.
The introduction of a good KPS starts at a centralized team sometimes referred to as the bridge team, whose responsibility is to oversee and manage all information to the business, in and out. This should be fully auditable to maintain a level of accountability and also improved security. Once this has been established a monthly review of all incoming and outgoing reports should be performed to streamline the KPS, making sure it doesn’t just become a dead cow left in the field.

Posted by admin
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