CHAPTER 9 CASE: The Fall of Barings Bank The story of Barings Bank shows how overconfidence‚ coupled with poor internal control‚ can even bring down an historic financial institution. Below we provide a few teaching points. Nick Leeson seemed to have all the characteristics of an overconfident trader. As described in the chapter‚ excessive trading‚ lack of diversification‚ and too much risk were obviously present. Self-attribution bias seemed to play a major role. One commentator notes
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Lam Tran BBUS 435 – Accounting Information System Rogue Trader COSO Control Violations Short Essay The movie‚ Rogue Trader‚ narrates the true story of a man named Nick Leeson. He brought the Barings Bank down‚ which was one of the most venerable financial institutions in England. Nick Leeson was played by the actor Ewan McGregor‚ who started working in Indonesia for Barings Bank. He then became a trader on the floor of Singapore International Monetary Exchange. Nick’s responsibility was to trade
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Mercedes Oliva HW 2 1. What was Nick Leeson’s strategy to earn trading profits on derivatives? Nick Leeson’s strategy to earn trading profits on derivatives was to trade futures on the Nikkei 225 stock index and the Japanese government bonds. This strategy would have either provided huge gains or huge losses. This went completely against what Barings was expecting him to do. He opened a secret trading account to avoid being caught. 2. What went wrong that caused his strategy to
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3. Internal Audit of operations: If the managers of Baring bank would have instituted internal audit of operations then they would have been able to uncover Leeson teeming and lading acts‚ Fraudulent cover up and grave misjudgment made while undertaking his duties.However this was not in place and their isn’t evidence of any manager who undertook to review Leesons work as they viewed Leeson to be independent. 4. Background Review: Due to the fact that the management of Baring Bank had created a
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The Review of The Shawshank Redemption The events The Shawshank Redemption take place in 1947. Andy (Tim Robbins) is a young banker who is convicted of murdering his wife and her lover. He is sentenced to life imprisonment‚ which means that he will be in Shawshank prison through the rest of his life. For a long time‚ Andy does not talk to anyone. While everyone complains‚ he is leisurely walking in the yard‚ just like in the park. A month later‚ the first thing that Andy asks his inmate Red (Morgan
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Title: The Shawshank Redemption Director: Frank Darabont In the movie the character Andy Dufresne played by Tim Robbins is sent to Shawshank prison on a double life sentence for killing his wife and her lover. In the prison he befriends Red‚ played by Morgan Freeman. Andy spends out his sentence helping the guards with tax returns and such and eventually he is laundering the corrupt money in which the prison makes. He is blackmailed by the warden when he says he is out so he escapes through a
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2010 Carl Robins Case Study Introduction Carl Robins is a new campus recruiter who is on the fast track to success. However‚ as a new employee‚ he is not fully informed on processes of the company. From my analysis‚ I conclude that Carl Robbins is not organized and did not assemble training plan for the new recruits. New employees can acquire a situation too deep and too fast. It takes at least six months to a year for someone in a new position to understand his or her role within a company
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Rogue Trader Introduction: A rogue trader is a market professional who is basically involved in different unauthorized trading activities. Most people are highly familiar with the rogue trading activities‚ as there have been several instances of huge losses incurred under the rogue trading. Recently these rogue trading activities causing huge losses attracted the media and many films have been based on such rogue trading activities. The rogue trader movie has been highly famous as it portrayed
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Events leading to Barings Bank’s collapse Barings Bank’s activities in Singapore between 1992 and 1995 enabled Nick Leeson to operate effectively without supervision from Barings Bank in London. Leeson acted both as head of settlement operations (charged with ensuring accurate accounting) and as floor manager for Barings’ trading onSingapore International Monetary Exchange‚ or SIMEX. This placed Leeson in the position of reporting to an office inside Barings Bank which he himself held. Because
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A Short Essay of Rogue Trader In the movie Rogue Trader‚ Nick Leeson‚ a trader on behalf of the Barings Bank of England‚ made a series of financial fraud to cover the loss he incurred in trading—up to £800 million—in the Singapore International Monetary Exchange which ultimately led to the fall of Barings Bank. This tragedy was a mixed result of the personal greed and the lack of control in Barings Bank’s system. Most of the COSO internal control frameworks were violated with the “Control Environment”
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