Please! ! ! Cases of investment business failure caused by internal control failure.

Analysis: 1. Reason 1. Management dereliction of duty of Bahrain Group When considering whether Singapore International Finance Exchange is competent, it must be made clear that Singapore International Finance Exchange has no responsibility to manage the affairs of Bahrain Futures Company of Singapore or any clearing member. Singapore International Financial Exchange is only a trading place for clearing members to conduct transactions. However, even so, the Singapore International Financial Exchange still has the opportunity to identify and reflect the signs of misconduct of its members. This opportunity appears at the end of 1994 and at the beginning of 1995. At that time, the Singapore International Financial Exchange found that there were some anomalies in the trading of Bahrain Futures Company in Singapore, and made some inquiries about Bahrain Futures Company in Singapore to Bahrain Group. These may be helpful for early detection of Allison's activities. According to the official liquidator, if the management of Bahrain Group correctly examines and understands the concerns expressed by the Singapore International Financial Exchange in its letter to the group, bankruptcy may be redeemed. The official liquidator thinks that the attitude of Bahrain Asset and Liability Management Committee in replying to the second letter of Singapore International Financial Exchange should be severely criticized, and it has made many unfounded false guarantees to Singapore International Financial Exchange. Similarly, Jones's attitude towards the two letters of the Singapore International Financial Exchange also reflects that he has taken the problem lightly to an unacceptable level. We can't understand why Qiong Qi, as the chief financial officer of Bahrain Futures Company in Singapore, signed the reply drafted by Li Sen in response to the inquiry of Singapore International Financial Exchange about Li Sen trading activities without having an independent and detailed understanding of the whole incident. 2. Loose internal control From the whole process of bankruptcy in Bahrain, it is generally believed that the internal management of financial institutions is the core issue of risk control, but the internal control in Bahrain is very loose. According to the newspaper, before the tragedy on February 26th, the securities investment of Bahrain Bank had exposed great risks, but it did not arouse the vigilance of the bank's top management. In the first week of June 65438+ 10, Lisen held 3024 lots, and held 16852 lots 20 days later (the position was quadrupled in just 20 days). By mid-February, Allison had more than 20,000 contracts, eight times more than the position held by the second largest trader in the same market. For reasons we don't know, the senior management of Bahrain Bank didn't notice this signal, so we responded accordingly. In a word, the internal control system and early warning system of Bahrain Bank failed, which eventually led to the tragedy. Shortly after Bahrain's bankruptcy, the bank's executives said that they knew nothing about nick leeson's behavior in Singapore, because the company's risk report was still balanced until the day nick leeson left, that is, Thursday, February 23rd. However, according to the relevant authorities in Singapore, Bahrain remitted US$ 65.438+28 billion to Singapore International Monetary Exchange in the first 654.38+08 days of February 1995 to advance the maintenance fund. According to the Financial Times, Eddie George, governor of the Bank of England, told members of the British Treasury and the House of Representatives Committee on April 5 that Bahrain had remitted 760 million pounds of cash to its Singapore branch without notifying the Bank of England. Before Bahrain went bankrupt, Lisson mainly traded with Bahrain's London headquarters, Tokyo branch and Hong Kong branch. In Singapore, there are only a few customers for futures trading, among which three are Bahrain Branch and the other is BNP Paribas. Every transaction will go through Bahrain branch. Therefore, it is impossible for Bahrain executives to be completely unaware of what Lisson has done. Alison later said in prison, "I can't believe nobody stopped me." People in London should know that my data is false ... these people should know that it is wrong for me to ask for cash from London headquarters every day, but they still pay. "It can be said that the collapse of Bahrain Bank was not caused by one person, but by an institution with a porous organizational structure and out-of-control internal management. 3. The responsibilities of the business transaction department and the administrative and financial management department are unclear. In Bahrain Singapore Branch, Nicholas himself is the person in charge of this system. He is in charge of trading and settlement, which is no different from letting a primary school student correct his homework and grade himself. This practice gave Allison many opportunities to make her own decisions. As the general manager, he is not only responsible for trading, but also has the following four powers: supervising administrative and financial management personnel; Issue checks; Responsible for reconciliation with Singapore International Monetary Exchange; And is responsible for checking the account with the bank. The administrative and financial management department keeps all kinds of transaction records and is responsible for payment. Although the company headquarters is well aware of his responsibility, they have not taken any action, for fear of offending him and losing this "star trader". He is in charge of both front desk transactions and administrative and financial management, just like a person is in charge of both warehouses and collections. Due to the convenience of work, Nicholas's wrong account code "88888" was used by 1 for many years, and it was not discovered until 1995 resigned. The London headquarters also thought of determining whether the profits of Singapore Branch can be sustained for a long time, and sent an audit team to Singapore Branch. The audit team mainly relied on the information provided by Leeson to prepare a four-page report. They have some knowledge of the general risks of the company, and wrote in the report: "The control may be replaced by the general manager", "He is responsible for the front-office transactions and financial management", "He may trade in the name of the collective and ensure delivery and recording according to his own intentions". However, the report goes on to say, "In view of the lack of senior cadres with experience in administrative and financial management, the general manager must actively hold trade and logistics management positions." At the same time, the report also pointed out that "Singapore Futures Department may break away from the normal trading track in Bahrain and do things that violate the regulations of Singapore International Monetary Exchange. "The audit team is also very familiar with Allison's trading strategy-many transactions are not low-risk arbitrage, but one-way high-risk gambling on the Nikkei." Although the risk is high, it may have higher returns. "4. The division between trading agent department and proprietary trading department is not clear. Trading with a company's capital is called proprietary trading. In addition, the company can also trade on behalf of customers. Of course, in the second case, the company will ask customers to charge a certain commission or transaction fee. Such as stock trading, we are all familiar with it. Companies generally conduct transactions according to customers' requirements, and of course sometimes provide some suggestions. Since the company only exercises rights on behalf of customers according to their requirements, customers should be responsible for any losses. Since the profit belongs to the customer, if the maintenance fund is insufficient, the customer should pay in advance. Nick leeson's trading was also questioned by his colleagues in the futures department of Bahrain and Singapore, but he always said that he was trading on behalf of his clients. It has also been suggested that Nick Leeson is lying to Bahrain, because it is very rare to advance the maintenance funds of futures contracts on behalf of customers. In many companies, the confusion between agent trading and proprietary trading also brings management difficulties. Only by clearly dividing the two can effective risk management be carried out. 5. The proportion of bonus structure and risk parameters is improper. Many companies use bonus payment to encourage employees to work hard. Generally, it is determined according to many factors such as employees' positions, work experience and work performance, and the regulations of each company are different. Of course, it is one thing to commend work achievements, but regardless of the company's risk parameters or long-term strategy, it is another matter to pay a large bonus according to the profit of the transaction. Bahrain has been paying 50% of the company's gross profit as a bonus to employees. This ratio is higher than most companies. Bahrain 1994 bonus 1 billion pounds (1.6 1 billion dollars) was just announced a few days before the company closed down. Several major presidents are expected to receive more than 6.5438+0 million pounds. Bonuses are often determined according to the profits earned by a group or individual in the previous year. The biggest problem with this reward system, which links traders' income with their trading profits, is that it stimulates traders' greedy speculation. High bonuses make employees eager to make money, and seldom consider the risks taken by the company.