Owzat? Sir Allen Stanford caught out?
Yet again, another billion-dollar scandal has come to light, this time involving Texan billionaire and cricket sponsor, Sir Allen Stanford. One is reminded of the tech bubble bursting and the slew of corporate failures that came to light then, with the likes of Enron, Worldcom and the rest, and it suggests the unpleasant possibility that there are more to come.
The Stanford affair, like the Madoff scandal, calls into question to role of the regulators (in this case the SEC), following alleged improvements to corporate governance and transparency forced through by previous corporate failures and regulation such as Sarbox. How could it have happened again, we all ask.
One supposes that where outright fraud is intended from the start, an unpleasant reliance needs to be placed on whistleblowers where rules are followed rather than opinions expressed. The rather more complex but common issue of good intentions going bad, where a certain bending of the rules is undertaken to stay ahead of the game (for example, where Stanford started to replace low-risk investments with high-risk) is one where regulators should be more alert.
As suppliers of business management and information systems, we are more than aware how important it is to have access to good information. However, business leaders and regulators need to be braver to tackle fraud head on, whoever the perpetrators.
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Tags: business management, fraud