A SPECIAL READ IN THE ERNST & YOUNG AUDIT REPORT ABOUT THEIR FINDINGS....
Will try and get this typed up for further discussion.And I would like to now
start getting questions ready for the worldspreadsheist audit for worldspreads.
If this had happened in the U.S both Foley and the CFO would by now have been arrested and questioned. If we dont take White collar crime seriously in this country then these sorts of frauds and flagrant breaches of regulations will not just continue but get worse.
If it was discovered at Barclays Bank that customer Saftey deposit boxes had been broken into and £13m was missing and all the signs were that it was an inside job, I would bet that all those staff responsible for the safety deposit boxes would have been interviewed by police the next day and after two weeks there is a good chance that if all the signs point towards one or two people that they would be arrested within two weeks.
I bet the City of London police have not even interviewed Foley and the Directors yet.
But when £13m is stolen by ordinary people,the police move quickly and arrests are made, but white collar crime seems to be treated differently.
Should we all put in a formal complaint of Fraud on the City of London Police website? It says on the website that they want the public to report fraud. Maybe if we all put in a formal complaint they will act, although I doubt that the police would have waited for individual complaints in the above example.
I must admit,if it was discovered that £13m was missing from customer safety deposit boxes I doubt that people would be saying that there "was no evidence of wrong doing" and "too early to say if their was fraud"
Reading page 7 was interesting. It outlines the Directors responsibilities in some detail and was signed by both O`Kelly and Foley. If this statement means anything at all they should have all their personal assets confiscated to make good the shortfall in client funds.
It is page 6 that really gets them, on page 6 both Foley and O`Kelly sign to say that they are unaware of anything that would affect the financial position of the company and that they have made the Auditors aware of all material facts.
Page 8 outlines the Auditors responsibilites. " An Audit involves obtaining evidence about the amounts and disclosures in the Financial Statements sufficient to give reasonable assurance that the Financial Statements are free from material misstatement, whether caused by fraud or error"
i.e Ernst and Young can have no defense that the Directors lied to them.It was THEIR responsibility to make sure the numbers were correct. They failed to do their job.
"Balances with market counterparties of £18,952,054 (2010 £16,083466) are treated as cash as they are recoverable on demand"
"Included in the cash balance are amounts contained in client segregated accounts in the amount of £18,241,336 (2010 £17,830,448)
i.e they had used virtually ALL of the client money to post as margin for hedges with market counterparties. Here they are admitting in writing that they were breaking FSA client money rules.They are not allowed to use client money to post margin.The company simply never had that amount of their own money to have posted that. Were E&Y unaware of FSA client money rules?.Were they Directors unaware of the FSA client money rules?,was the Compliance officer unaware of the FSA client money rules? and did anyone at the FSA bother to read the Report and Accounts?.
the figure that sticks out to me is the "administrative expenses" of 10,171.813 (page 10). Can anyone cast any light on why that should be so high? fiscalista milano
If this had happened in the U.S both Foley and the CFO would by now have been arrested and questioned.
ReplyDeleteIf we dont take White collar crime seriously in this country then these sorts of frauds and flagrant breaches of regulations will not just continue but get worse.
If it was discovered at Barclays Bank that customer Saftey deposit boxes had been broken into and £13m was missing and all the signs were that it was an inside job, I would bet that all those staff responsible for the safety deposit boxes would have been interviewed by police the next day and after two weeks there is a good chance that if all the signs point towards one or two people that they would be arrested within two weeks.
DeleteI bet the City of London police have not even interviewed Foley and the Directors yet.
But when £13m is stolen by ordinary people,the police move quickly and arrests are made, but white collar crime seems to be treated differently.
Should we all put in a formal complaint of Fraud on the City of London Police website?
DeleteIt says on the website that they want the public to report fraud.
Maybe if we all put in a formal complaint they will act, although I doubt that the police would have waited for individual complaints in the above example.
I must admit,if it was discovered that £13m was missing from customer safety deposit boxes I doubt that people would be saying that there "was no evidence of wrong doing" and "too early to say if their was fraud"
Deletethe figure that sticks out to me is the "administrative expenses" of 10,171.813 (page 10). Can anyone cast any light on why that should be so high?
ReplyDeletePK
Directors salaries.
DeleteReading page 7 was interesting.
ReplyDeleteIt outlines the Directors responsibilities in some detail and was signed by both O`Kelly and Foley.
If this statement means anything at all they should have all their personal assets confiscated to make good the shortfall in client funds.
It is page 6 that really gets them, on page 6 both Foley and O`Kelly sign to say that they are unaware of anything that would affect the financial position of the company and that they have made the Auditors aware of all material facts.
DeletePage 8 outlines the Auditors responsibilites.
Delete" An Audit involves obtaining evidence about the amounts and disclosures in the Financial Statements sufficient to give reasonable assurance that the Financial Statements are free from material misstatement, whether caused by fraud or error"
i.e Ernst and Young can have no defense that the Directors lied to them.It was THEIR responsibility to make sure the numbers were correct. They failed to do their job.
If you dig deeper into those numbers you find that advertising increased 7 fold and ironically FSA reg fees X3.
ReplyDeleteTHIS IS REALLY IMPORTANT
ReplyDeleteOn page 29 at the bottom it says:
"Balances with market counterparties of £18,952,054 (2010 £16,083466) are treated as cash as they are recoverable on demand"
"Included in the cash balance are amounts contained in client segregated accounts in the amount of £18,241,336 (2010 £17,830,448)
i.e they had used virtually ALL of the client money to post as margin for hedges with market counterparties.
Here they are admitting in writing that they were breaking FSA client money rules.They are not allowed to use client money to post margin.The company simply never had that amount of their own money to have posted that.
Were E&Y unaware of FSA client money rules?.Were they Directors unaware of the FSA client money rules?,was the Compliance officer unaware of the FSA client money rules? and did anyone at the FSA bother to read the Report and Accounts?.
We have got to alert the Press to this.
ReplyDeletethe figure that sticks out to me is the "administrative expenses" of 10,171.813 (page 10). Can anyone cast any light on why that should be so high? fiscalista milano
ReplyDelete