Wednesday, February 16, 2011

Exclusive Prison Interview: Bernard L. Madoff Speaks to the Gray Lady

In his first interview since his arrest in December of 2008, Bernard Madoff tells the New York Times, “that unidentified banks and hedge funds were somehow “complicit” in his elaborate fraud, an about-face from earlier claims that he was the only person involved.”

The article notes that during the private two-hour interview, Madoff went on to say, ““They had to know, but the attitude was sort of, ‘If you’re doing something wrong, we don’t want to know,” and yet he did not say “that any specific bank or fund knew about or was an accomplice in his Ponzi scheme, which lasted at least 16 years and consumed about $20 billion in lost cash and almost $65 billion in paper wealth. Rather, he cited a failure to conduct normal scrutiny.”

The interview and the research conducted were part of the reporter’s leg work for an upcoming book, “The Wizard of Lies: Bernie Madoff and the Death of Trust,” out for publication this spring. You can read the full length article here.

Clearly, this case only serves to reinforce that the importance of operational due diligence before any investment is made is paramount. Most due diligence professionals would have identified problems with investing in Madoff Funds.  Since Madoff...there has been more awareness of the need for strong due diligence. To explore more related topics and test your knowledge in the Due Diligence Challenge, join us at the 6th Annual GAIM Ops Cayman.

Let us know what you think: Do you believe Mr. Madoff?

Wednesday, February 2, 2011

Finance + Social Media =

So the verdict is in - social media makes sense. Many companies are embracing it as a mainstream business practice. How about Finance? Where do you stand on social media?

In a recent article at Dave McCann states "Amid the chatter, companies are beginning to achieve tangible benefits".

He gives a few examples such as Ford:
Ford Motor was preparing last year's North American launch of the Fiesta, it didn't just make social media part of its strategy: its initial marketing push relied solely on social media. The automaker supplied Fiestas to a mere 100 people to drive for six months. But they were the right 100 people, so-called digital influencers (bloggers, podcasters, YouTube celebrities, and automotive journalists) who cranked out videos, tweets, blog posts, photos, and other media relating to the car.

Old Spice:
2010's Old Spice's "Smell Like a Man, Man," became a viral video sensation after being posted on YouTube and Facebook, racking up more than 100 million views in five months.

And some others, but failed to include any information about how financial institutions are using or NOT using social media.

I think banks, credit card companies and others should be using social media to its fullest; either by listening to their customers and doing customer service via social or setting up communities where users can get info quickly and share positive word of mouth experiences about that financial service.

Here is a PPT presentation I found which addresses some of my questions.

At the end of the day I think with proper training and setting up expectations financial institutions should be using social media to some degree.

David even included some stats in his article:

A 2010 study by communications firm Burson-Marsteller found that 65% of the largest global companies had Twitter accounts, 54% had Facebook fan pages, and 50% had YouTube video channels. And research firm Gartner predicts that by 2014, social media will have surpassed e-mail as the primary communication vehicle for a fifth of business users.

By 2014; Gartner predicts that SM will surpass email as the primary communication method. Wow - Finance are you prepared?