Enterprise Risk Management
Securities Class Actions in Canada
With the winter Olympics going full swing in Canada, I thought I would look to how that country is dealing with securities class actions. NERA Economic Consulting just released their 2009 Update on Trends in Canadian Securities Class Actions. Some tidbits: Eight securities class actions were filed in 2009, compared with the 10 filings in… » Read More
The Economist: Special Report on Financial Risk
This week’s The Economist has an excellent special report: The Gods Strike Back. The title comes from Peter Bernstein’s Against the Gods: “The revolutionary idea that defines the boundary between modern times and the past is the mastery of risk: the notion that the future is more than a whim of the gods and that… » Read More
The Drunkard’s Walk, The Butterfly Effect and The Black Swan
The “drunkard’s walk” refers to the Brownian motion, the seemingly random movement of particles suspended in a fluid. The original thought was that you might be able to calculate the movement by measuring and calculating the interaction. It proved impossible. There are too many factors and too many interactions. Small changes in a system can… » Read More
Six Mistakes Executives Make in Risk Management
Nassim N. Taleb, Daniel G. Goldstein, and Mark W. Spitznagel discuss risk management and short comings in approaches in the October 2009 issue of the Harvard Business Review (subscription required). They offer up six mistakes in the way we think about risk: 1. We think we can manage risk by predicting extreme events. 2. We… » Read More
The Four Areas of Risk and Knowledge
When thinking about risk, I break things into four quadrants. There are things we know and there are things we don’t know as individuals. I then slice slice that further again with the things we know and the things we don’t know as part of the larger organization or conscious state. Our sweet spot is… » Read More
Managing Risk in the Financial Sector
On Sept. 16, 2009, Compliance Week and Navigant Consulting presented an exclusive editorial roundtable about compliance practices at financial services firms at The Mandarin Oriental Hotel in Boston. (Apparently not so exclusive, considering I was able to get in. I even made it into one of the article’s pictures. – That’s me eating my fingers… » Read More
Redefining Risk
Maybe we should define risk as what needs to go right, instead of what could go wrong. Although I would like to claim credit for this view of risk, it came from James Bone of Global Compliance Advisors, LLC. I met James at a Compliance Week round table last week discussing risk management and regulatory… » Read More
What Went Wrong at Lehman?
Complinet interviewed David DeMuro, head of compliance at Lehman Brothers during its last days in 2008. It should come as no surprise that the warning signs were there for everyone to see but in the midst of a bubble, employees were too scared to raise their hand because there was still money to be made…. » Read More
Failure to Conduct Diligence Can Lead to SEC Sanctions
If you advertise that you have due diligence process, you had better follow that process. The Securities and Exchange Commission brought an administrative proceeding against an investment adviser for failing to follow its advertised due diligence program. The Hennessee Group promoted its process for evaluating and selecting hedge funds as the “Five Level Due Diligence… » Read More
Risk Assessment – Getting It Right
PricewaterhouseCoopers LLP sponsored this webcast: Corporate leaders have long recognized that the pace of change continues to increase in velocity, thus challenging management’s execution of the business’ strategic and tactical plans. Enterprise Risk Management (ERM) is a management tool that can be effective in identifying and assessing the risks that come with change and allow… » Read More
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Compliance Building is published by Doug Cornelius, focusing on compliance and ethical issues for private equity real estate companies. Read more in About.
