I blame the regulators, they put stupid rules and phony required audits in place. they need to stop allowing firms and commodities firms to have self custody of client assets. require all client assets to be held with an appropriate 3rd party custodian, who have procedures in place to prevent fraud.
Madloff, Stanford, MF Global, and PFG all had a form of self custody which allowed them access to client funds without anyone asking a question. Stop the stupid regulation and just use common f;ing sense!
I blame the regulators, they put stupid rules and phony required audits in place. they need to stop allowing firms and commodities firms to have self custody of client assets. require all client assets to be held with an appropriate 3rd party custodian, who have procedures in place to prevent fraud.
Madloff, Stanford, MF Global, and PFG all had a form of self custody which allowed them access to client funds without anyone asking a question. Stop the stupid regulation and just use common f;ing sense!
You can't eliminate the possibility of fraud. Arthur Anderson was going to prevent Enron from defrauding everyone and look how that worked out.
PFG is a bit misleading as well. Iowans don't associate PFG with Peregrine.
I blame the regulators, they put stupid rules and phony required audits in place. they need to stop allowing firms and commodities firms to have self custody of client assets. require all client assets to be held with an appropriate 3rd party custodian, who have procedures in place to prevent fraud.
Madloff, Stanford, MF Global, and PFG all had a form of self custody which allowed them access to client funds without anyone asking a question. Stop the stupid regulation and just use common f;ing sense!
Apparently the owner provided the regulators with a bogus bank address that went to a PO box that he owned, then forged the confirmations when he received them. I think the majority of CPA firms (and probably other regulatory firms) rely on the address provided by their client as a valid address for confirmation - I'll bet we'll see some tightening of standards here.The audit should have found that there really wasn't $220 million in customer funds. Verifying bank accounts is the most basic audit practice so there is no excuse for the audit to not find the discrepancy between $220 and $5 million.
You do realize that not allowing firms and commodities firms to have self custody of client assets would be a regulation, right? In 2 sentences you said that they need to eliminate regulations and put in regulations.
FIFYYou can't eliminate the possibility of fraud or a coverup by those who you rely on to watch for fraud. Arthur Anderson was going to prevent Enron's fraud from being uncovered so they didn't lose a major source of audit and consulting revenue and it worked pretty well for a while.
How can so many be so wrong about a company? PFG won all kinds of recognition and awards. Yet no one thought to look at the financials? Hmmm... What is the point of regulation if things like this can go on in plain sight?
It would only be a matter of time before the 3rd party committed fraud.
YES! Both you and JBH are 100% correct. And policy maker's are scratching their heads wondering why we have anemic GDP growth and little new job creation.Most regulations are designed not to regulate, but to force burdensome protocols onto smaller competition, thus forcing them out of business and leaving everything to the big boys. Don't throw me in that briar patch! The entire system is corrupt to the core.