Comments for Finlay ON Governance http://finlayongovernance.com Capitalism, leadership and accountability: Lessons from the Future. Now. Mon, 13 Jun 2011 03:06:38 +0000 hourly 1 http://wordpress.org/?v=3.4.2 Comment on Disorganized money markets mask mob activity: report by larry elford http://finlayongovernance.com/?p=2218&cpage=1#comment-62952 larry elford Mon, 13 Jun 2011 03:06:38 +0000 http://finlayongovernance.com/?p=2218#comment-62952 The definition of organized crime says "three or more persons" acting in concert to violate the criminal code. etc By that definition, our banks and financial institutions definitely fit as well as the ordinary criminal element. In US academic studies this type of crime is labeled as that by "trusted criminals", and is in my opinion, worse by one measure, namely, the violation of "trust" or professionalism, in addition to the violation of the country's economic health. Thanks Richard Larry Elford www.breachoftrust.ca The Unique Violence of White Collar Crime The definition of organized crime says “three or more persons” acting in concert to violate the criminal code. etc

By that definition, our banks and financial institutions definitely fit as well as the ordinary criminal element. In US academic studies this type of crime is labeled as that by “trusted criminals”, and is in my opinion, worse by one measure, namely, the violation of “trust” or professionalism, in addition to the violation of the country’s economic health.

Thanks Richard
Larry Elford
http://www.breachoftrust.ca The Unique Violence of White Collar Crime

]]> Comment on Turbo Populism Arrives in Washington, and Anywhere Else it Wants by Elizabeth Viki http://finlayongovernance.com/?p=1839&cpage=1#comment-43420 Elizabeth Viki Sat, 23 Jan 2010 18:02:03 +0000 http://finlayongovernance.com/?p=1839#comment-43420 Just want to thank you for your blog which I've recently subscribed to, as corp gov is my key area of interest. It's very useful for my research but also fun! Thank you Just want to thank you for your blog which I’ve recently subscribed to, as corp gov is my key area of interest. It’s very useful for my research but also fun! Thank you

]]> Comment on The Great Sphinx and the Mystery of the Federal Reserve by The Great Sphinx and the Mystery of the Federal Reserve « Corporate Governance Leaders http://finlayongovernance.com/?p=1808&cpage=1#comment-43408 The Great Sphinx and the Mystery of the Federal Reserve « Corporate Governance Leaders Tue, 12 Jan 2010 17:01:49 +0000 http://finlayongovernance.com/?p=1808#comment-43408 [...] It is asserted by senior New York Fed officials that Mr. Geithner had no influence in the outcome, as he had removed himself from any decision-making.  Influence comes in a variety of shapes and sizes, however.  As its CEO, Mr. Geithner set the tone and culture for the New York Fed during his five-year tenure.  If he didn’t actually hire the staff  who made the decision about the payments to AIG et al., he was involved in assessing their performance.  They were his kind of people.  It is unlikely they would have done something they knew he would disapprove of or that would have been likely to cause him trouble in his new post.  That is not the way organizations work…(continue reading) [...] [...] It is asserted by senior New York Fed officials that Mr. Geithner had no influence in the outcome, as he had removed himself from any decision-making.  Influence comes in a variety of shapes and sizes, however.  As its CEO, Mr. Geithner set the tone and culture for the New York Fed during his five-year tenure.  If he didn’t actually hire the staff  who made the decision about the payments to AIG et al., he was involved in assessing their performance.  They were his kind of people.  It is unlikely they would have done something they knew he would disapprove of or that would have been likely to cause him trouble in his new post.  That is not the way organizations work…(continue reading) [...]

]]> Comment on Why Canada’s Stock Markets Attracted Russian Mobsters Like a Magnet by Alexander Krakovsky http://finlayongovernance.com/?p=1729&cpage=1#comment-43353 Alexander Krakovsky Sat, 07 Nov 2009 03:52:10 +0000 http://finlayongovernance.com/?p=1729#comment-43353 This brings back memories. Conclusion is the same: do not blame it on the mafia or the regulators. I think Semion Mogilevic ("Seva") was attracted to the Canadian market because first he had long-time Canadian cohorts who saw how much easier pray the happy North American market would be over the hardened Russian market. Second, he saw easy pray not in the regulators, but in the investment community. No amount of regulation can make the markets fool proof. He would not have been able to pull off the same scheme in the poorly regulated Russian or Ukrainian market even in 1998 because Russian market participants, hardened by the mass privatization, are just a lot more activist than North American investors. Sure, there is a lot more shenanigans in Russia, but it is a legacy of mass privatization that listed companies without commercial reason (see for example http://www.oecd.org/dataoecd/5/60/1930613.pdf). Commercially-motivated issuers are better governed than in the US, and everyone knows where the dogs are. In a way, "Seva" was an inovator and a visionary, but a small-time player. Everything that followed, from Enron to Madoff, was more of the same, but bigger. Instead of blaming the poorly regulated Canadian markets or the Russian mafia, the investment community needs to look inward. Icahn is right: "It is up to the Shareholders, Not the Government to Demand Change..." And the old saying goes: "Fool me once, shame on you; fool me twice shame on me." Shame on Seva. He fooled us once. We were fooled the same way twice, thrice and many, many other times. Shame on us! This brings back memories. Conclusion is the same: do not blame it on the mafia or the regulators.

I think Semion Mogilevic (“Seva”) was attracted to the Canadian market because first he had long-time Canadian cohorts who saw how much easier pray the happy North American market would be over the hardened Russian market. Second, he saw easy pray not in the regulators, but in the investment community. No amount of regulation can make the markets fool proof.

He would not have been able to pull off the same scheme in the poorly regulated Russian or Ukrainian market even in 1998 because Russian market participants, hardened by the mass privatization, are just a lot more activist than North American investors. Sure, there is a lot more shenanigans in Russia, but it is a legacy of mass privatization that listed companies without commercial reason (see for example http://www.oecd.org/dataoecd/5/60/1930613.pdf). Commercially-motivated issuers are better governed than in the US, and everyone knows where the dogs are.

In a way, “Seva” was an inovator and a visionary, but a small-time player. Everything that followed, from Enron to Madoff, was more of the same, but bigger. Instead of blaming the poorly regulated Canadian markets or the Russian mafia, the investment community needs to look inward. Icahn is right: “It is up to the Shareholders, Not the Government to Demand Change…” And the old saying goes: “Fool me once, shame on you; fool me twice shame on me.” Shame on Seva. He fooled us once. We were fooled the same way twice, thrice and many, many other times. Shame on us!

]]> Comment on Bonfire of the Insanities: An Essay on AIG and Wall Street’s Culture of Entitlement by Pat R., Boston, MA http://finlayongovernance.com/?p=1477&cpage=1#comment-42424 Pat R., Boston, MA Wed, 15 Jul 2009 16:28:50 +0000 http://finlayongovernance.com/?p=1477#comment-42424 One of the least noticed outrages concerns the fact that many of America's fine but young men used to pull off such heists by their higher ups now sit on the sidelines without the bonuses they were promised in a blatant disregard of labor and employment rights while their supervisors and high level Executives waltz off with the profits and the bail out bonuses. The use of underlings in American industry is not new but the era of Wall Street greed in the last several years has taken it to new heights where those on Wall Street didn't even watch after those they trained to perform, reaching into the philosophy of eating your own seed corn - which has never been a phenomenon that America has witnessed with such blatant disregard of the responsibility of a meritocracy and the role of training and employment within it. Because of that, it takes the bail out business to an altogether new plateau of disgrace where self indulgent supervisors can disregard employees and hoard benefits for himself, much like the patterns of outsourcing overseas (which must be drifting into the U.S. consciousness as legitimate commercial protocol as well). That is a much more serious factor than mere laxity in business processes, and taking chances on unreasonable risks. One of the least noticed outrages concerns the fact that many of America’s fine but young men used to pull off such heists by their higher ups now sit on the sidelines without the bonuses they were promised in a blatant disregard of labor and employment rights while their supervisors and high level Executives waltz off with the profits and the bail out bonuses.

The use of underlings in American industry is not new but the era of Wall Street greed in the last several years has taken it to new heights where those on Wall Street didn’t even watch after those they trained to perform, reaching into the philosophy of eating your own seed corn – which has never been a phenomenon that America has witnessed with such blatant disregard of the responsibility of a meritocracy and the role of training and employment within it.

Because of that, it takes the bail out business to an altogether new plateau of disgrace where self indulgent supervisors can disregard employees and hoard benefits for himself, much like the patterns of outsourcing overseas (which must be drifting into the U.S. consciousness as legitimate commercial protocol as well). That is a much more serious factor than mere laxity in business processes, and taking chances on unreasonable risks.

]]> Comment on Did You Say “Fraud,” Mr. Mozilo? by Pat R., Boston, MA http://finlayongovernance.com/?p=1646&cpage=1#comment-42417 Pat R., Boston, MA Wed, 15 Jul 2009 15:50:04 +0000 http://finlayongovernance.com/?p=1646#comment-42417 Reality Check for the bail out may indicate a Stephen King imagination to produce a true country club of prisons where white collar criminals reside that can accommodate their unique needs for narcissistic habitation - that anticipates the growing need to accommodate white collar criminals in a system that induces performance as easily as the system condemns those at the bottom - blue collar criminals. Re-inventing the prison system might be a useful undertaking for a society committed to justice, not injustice based upon profession and appearance. Reality Check for the bail out may indicate a Stephen King imagination to produce a true country club of prisons where white collar criminals reside that can accommodate their unique needs for narcissistic habitation – that anticipates the growing need to accommodate white collar criminals in a system that induces performance as easily as the system condemns those at the bottom – blue collar criminals.

Re-inventing the prison system might be a useful undertaking for a society committed to justice, not injustice based upon profession and appearance.

]]> Comment on Reshuffling the Crew on the Citigroup Titanic by Pat R., Boston, MA http://finlayongovernance.com/?p=1065&cpage=1#comment-42416 Pat R., Boston, MA Wed, 15 Jul 2009 15:45:45 +0000 http://finlayongovernance.com/?p=1065#comment-42416 Red Flags dismissed are not negligence but a preference/favoritism for who wins and who loses by those feeling privileged to make the call. Red Flags dismissed are not negligence but a preference/favoritism for who wins and who loses by those feeling privileged to make the call.

]]> Comment on There is Madness in the Madoff Punishment, Too by Pat R., Boston, MA http://finlayongovernance.com/?p=1661&cpage=1#comment-42415 Pat R., Boston, MA Wed, 15 Jul 2009 15:43:54 +0000 http://finlayongovernance.com/?p=1661#comment-42415 There is no possible way to equate the illegalities associated with Madoff and the illegalities associated with the bail out bills that reward misconduct except to presume that Madoff was made a scapegoat of the problem owned by all of Wall Street, and by most of the banking firms that do business there, as well as the companies they fund and float capital for. That Madoff was a part of this scheme reveals the injustice of carving him out of the process for condemnation but rewarding everyone else because they didn't get caught. It is economic schizophrenia in its finest rationale. There is no possible way to equate the illegalities associated with Madoff and the illegalities associated with the bail out bills that reward misconduct except to presume that Madoff was made a scapegoat of the problem owned by all of Wall Street, and by most of the banking firms that do business there, as well as the companies they fund and float capital for. That Madoff was a part of this scheme reveals the injustice of carving him out of the process for condemnation but rewarding everyone else because they didn’t get caught. It is economic schizophrenia in its finest rationale.

]]> Comment on The Missing Question in the Obama Regulatory Reforms: Where Was the Board? | Part 1 by Alex Krakovsky http://finlayongovernance.com/?p=1649&cpage=1#comment-41476 Alex Krakovsky Fri, 26 Jun 2009 13:28:10 +0000 http://finlayongovernance.com/?p=1649#comment-41476 SEC proposed new exchange act rule 14a-11 and 14a-8(i)(8) seem to put a whole lot more power with the activist shareholders over nominating of the the board. However, the criticism, as expressed by Commissioner Troy Paredes ( http://www.sec.gov/news/speech/2009/spch062309tap.htm ) is that this rule reaches too far in meddling in internal corporate rules. However, the Government had overreached much, much more in regulations dictating company operations and reporting, while allowing archaic bylaws to frustrate shareholders' ability to demand proper private oversight. Regulators and state legislators have to go further by requiring that corporate bylaws be reviewed and a certain set of best practices (especially those dealing with board elections) be adopted individually by a simple majority instead of a qualified majority. This kind of regulation will put the power in shareholder hands and shake-up the "pocket boards" a lot more than meddling in the details of how companies run their accounting departments. SEC proposed new exchange act rule 14a-11 and 14a-8(i)(8) seem to put a whole lot more power with the activist shareholders over nominating of the the board. However, the criticism, as expressed by Commissioner Troy Paredes ( http://www.sec.gov/news/speech/2009/spch062309tap.htm ) is that this rule reaches too far in meddling in internal corporate rules. However, the Government had overreached much, much more in regulations dictating company operations and reporting, while allowing archaic bylaws to frustrate shareholders’ ability to demand proper private oversight. Regulators and state legislators have to go further by requiring that corporate bylaws be reviewed and a certain set of best practices (especially those dealing with board elections) be adopted individually by a simple majority instead of a qualified majority. This kind of regulation will put the power in shareholder hands and shake-up the “pocket boards” a lot more than meddling in the details of how companies run their accounting departments.

]]> Comment on The Titanic of Ironies by Fintan http://finlayongovernance.com/?p=1570&cpage=1#comment-35645 Fintan Fri, 17 Apr 2009 08:48:07 +0000 http://finlayongovernance.com/?p=1570#comment-35645 Yes, indeed, what a waste of potential. But, like Anakin Skywalker, Black succumbed to the wiles and seductions of the Dark Side and followed a path of evil until Karma finally stepped in and his downfall came. Yes, indeed, what a waste of potential. But, like Anakin Skywalker, Black succumbed to the wiles and seductions of the Dark Side and followed a path of evil until Karma finally stepped in and his downfall came.

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