1/6  ·  In one case, grossly inadequate management oversight resulted in the operation of a trading program with numerous phony transactions. This extended over a period of years, causing significant financial losses to the financial institution. ·  A repeated problem is inadequate management and audit committee oversight of business lines.
In one case, this resulted in an institution engaging in transactions with special purpose entities without adequate director knowledge and without effective identification and management of risks. ·  Despite apparent approval by outside auditors and lawyers, we have seen transactions that elevated form over substance, transgressed accounting rules, created serious reputational and legal risk for the institution and ultimately resulted in serious sanctions.