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XTREME RISK GAMES (XRG)
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Regulatory Risk Scenarios |
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A securities firm has found material discrepancies in a trader's pricing of inventory positions.
Poor segregation of duties has led to the trader manipulating the marked-to-model valuations of his positions, to prevent losses that might impact his compensation.
An internal audit shows net trading losses over $10bn, as well as inadequate regulatory capital. Regulators must be notified promptly.
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Inadequate internal controls cause a breach of Sarbanes Oxley.
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