Question: One of the largest losses in history from unauthorized securities trading
One of the largest losses in history from unauthorized securities trading involved a securities trader for the French bank, Société Générale. The trader was able to circumvent internal controls and create over $7 billion in trading losses in six months. The trader apparently escaped detection by using knowledge of the bank’s internal control systems learned from a previous back-office monitoring job. Much of this monitoring involved the use of software to monitor trades. In addition, traders are usually kept to tight spending limits. Apparently, these controls failed in this case. What general weaknesses in Société Générales internal controls contributed to the occurrence and size of the losses?
Answer to relevant QuestionsAn employee of JHT Holdings, Inc., a trucking company, was responsible for resolving roadway accident claims under $25,000. The employee created fake accident claims and wrote settlement checks of between $5,000 and $25,000 ...Identify the internal control weaknesses that exist at Buffalo Bob’s Burgers, and discuss what can be done to prevent this theft. Themailroom employees send all remittances and remittance advices to the cashier. The ...The following data were accumulated for use in reconciling the bank account of Commander Co. for March:a. Cash balance according to the company’s records at March 31, $13,065.b. Cash balance according to the bank statement ...Mattel, Inc., designs, manufactures, and markets toy products worldwide. Mattel’s toys include BarbieTM fashion dolls and accessories, Hot WheelsTM, and Fisher-Price brands. For a recent year, Mattel reported the following ...The records of Anacker Company indicate a July 31 cash balance of $9,400, which includes undeposited receipts for July 30 and 31. The cash balance on the bank statement as of July 31 is $6,575. This balance includes a note ...
Post your question