It’s the financial service web site FierceFinance.com who have put together the list of the biggest blunders in the industry during the past year. Personally, I might have put a few other issues on the list, but when it comes to the final top position I think we have a winner:
“Led by CEO Jon Corzine, formerly of Goldman Sachs, MF Global was a trading powerhouse back in 2010. That all came crashing down in late 2011, as the bank filed for Chapter 11 bankruptcy and lost track of $600 million in capital.”
Yeah, losing $600 million is probably harder than earning them, and quite an achievement…
“The MF Global failure was a total unraveling involving poor management and risky investment. For what it’s worth, Corzine said he will not be seeking to collect his $12 million Golden Parachute severance package. But reports surfaced in The Telegraph speculating that MF Global employees in the U.K. may have received Q3 corporate bonuses, even with the firm on the brink of failure.”
Read more: MF Global coverage.
Here’e the rest of the list:
2. Bank of America imposes debit card fee.
“The backlash against the bank was severe. But CEO Brian Moynihan defended the bank’s right to make a profit, saying in a statement that he had “an inherent duty as a CEO of a publicly owned company to get a return for my shareholders.”
3. Frustration sparks Occupy Wall Street protests.
“What originated as peaceful has become violent, as reports surfaced of police using tear gas on protestors along with attempts to force them out of encampments.”
4. S&P downgrades US credit rating.
“Even though S&P went on to be criticized for its debt rating practices (the issue of credit rating agency credibility looms large), the move was significant at a time when budget showdowns in Washington and a stagnant economy were constantly in the headlines.”
5. Raj Rajaratnam slammed for insider trading.
“The convicted insider trader dominated the news in 2011 and in many ways is seen as the pinnacle of success for federal prosecutors, who have been cracking down on offenders.”
6. Citi stumbles after major data breach.
“Citi was reluctant to publicly announce the breach, finally doing so only after being pressed on the subject by the media. Citi offered a public explanation of the incident and tried reassuring customers that the stolen data was insufficient to commit fraud and that social security numbers, dates of birth and card security codes remained secure.”
7. Bank of America forecloses on couple.
“One of the more bizarre stories of 2011 was when Bank of America accidentally foreclosed on a Florida couple. Although the bank eventually backed down, the couple hired a lawyer to recoup attorney’s fees. Five months passed without payment–this coming after a judge ordered the bank to pay up. So the couple and its attorney showed up to foreclose on a local Bank of America branch, declaring their intent to remove furniture, cash and other property.”
8. RSA suffers cyber attack.
“RSA’s SecureID tokens are used by 30,000 organizations worldwide. RSA remained open about the attack, offering tips and posting details describing the anatomy of the breach. But even transparency didn’t reverse the fact that banks were forced to rethink security and look for new options.”
9. Typo costs Goldman Sachs $45 million.
“A tip for everyone who deals with contracts: Double check all calculations. Goldman Sachs learned that lesson the hard way back in June when it issued four warrants relating to Japan’s Nikkei index. Buried in the depths of financial jargon was a serious formulaic mistake: A multiplication sign was inserted where there should have been a divide by sign.”
10. John Paulson‘s Sino-Forest bust.
“In all likelihood, 2011 will not be a great year for hedge fund manager John Paulson. Among his failures was selling 35 million shares of the Chinese company Sino-Forest at an estimated loss of $500 million.”
Original post here.
- MF Global’s collapse looks like a scandal (blogs.ft.com)
- Missing MF Global Funds Could Top $1.2B, Trustee Says (foxnews.com)
- MF Global: The mess that keeps getting messier (finance.fortune.cnn.com)
- DealBook: British Regulators Bar Hedge Fund Executive From Industry (dealbook.nytimes.com)
- MF Global: Fraud, Incompetence, or a Bit of Both? (dailyfinance.com)
- House panel calls Corzine to testify (marketwatch.com)
- Analysis of the U.S. Savings and Loans Banking Market (prnewswire.com)
- Which? Sting Shows Banks ‘Give Bad Advice’ (news.sky.com)