Good Risk Governance Pays

Good Risk Governance Pays

Investment Best Practices | Risk Management | Valuation

Category Archives: Disclosure and Transparency

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Thank You for Blog of the Week Recognition

Posted in Disclosure and Transparency, Susan Mangiero
I was recently informed by Fiduciary News editor Chris Carosa that my blog post entitled “Effective Retirement Plan Communications” (January 8, 2017) was selected “Blog of the Week” for the second week of January. Thank you to Chris and his loyal readers. I really appreciate the recognition. It’s always terrific to get feedback about what topics… Continue Reading

Fake News, Plagiarism and Business Ethics

Posted in Disclosure and Transparency, Ethics, Investment Management, Non-Profits, Risk Management, Trading
If you are a consumer of factual information, your head is probably spinning from the fast-paced discussions about what constitutes real news versus fake news. Not being a journalist, I’ll leave questions about a reporter’s obligations to the media industry’s standard-setters. That said, I can and do vote with my dollars. If I sense that an article or broadcast reflects shoddy… Continue Reading

Victoria’s Secret and Financial Benchmarking

Posted in Disclosure and Transparency, Investment Management, Risk Management
Its iconic fashion show won’t occur until this fall but Victoria’s Secret is in the headlines for another reason. Owner L. Brands, Inc. (“LB” ticker) will no longer mail about 300 million catalogs each year. The goal is to save between $125 to $150 million and be more eco-friendly. Shoppers can still purchase online or visit… Continue Reading

Reputation and the Investment Management Bottom Line

Posted in Customer Service, Disclosure and Transparency, Governance, Investment Consultants, Investment Management, Key Person, Risk Management
Those in the know understand that both qualitative and quantitative factors must be evaluated when estimating enterprise value. The list of appraisal considerations is too long to address in any one discussion. Suffice it to say that one should understand, measure and benchmark multiple facets of an organization’s business such as production processes, distribution channels, sales infrastructure and customer service. A clarity… Continue Reading

Investment Vendor Due Diligence and the Fiduciary Rule

Posted in Compliance, Credit Risk, Disclosure and Transparency, Fiduciary Liability, Financial Reporting, Liquidity, Susan Mangiero
When I was a university professor and gave written homework, I frequently found myself in the position of having to remind students that reliance on a spell checker may not always produce good results. “I through the ball” is grammatically incorrect but would not reveal itself as an error. Someone would have to know that “threw” is… Continue Reading

Investment Benchmarking “Must Do” Tasks

Posted in Disclosure and Transparency, Financial Reporting, Governance, Investment Management, Regulation, Risk Management
Whenever the topic of performance measurement comes up in conversation, I think back to a story someone told me about a woman who took the number two spot in a race. Proud of her accomplishment, she telephoned friends and family with the news. Here’s the catch. Only one other runner competed. Technically, her statement was… Continue Reading

It’s Heeeere – The Fiduciary Rule Has Arrived – Now What?

Posted in Compliance, Disclosure and Transparency, ERISA, Fees, Fiduciary Liability, Governance, Investment Management, Mutual Funds, Regulation
Like most people who work in the financial services arena, I hastily downloaded the long anticipated “Fiduciary Rule” when it was released by the U.S. Department of Labor (“DOL”) on April 6, 2016 and am busy tackling this final version. With more than two hundred pages, it’s going to take longer than a lunch break but is nevertheless vital reading. DOL’s Fact… Continue Reading

Increased Regulation of Derivatives by Registered Funds

Posted in Derivatives, Disclosure and Transparency, International Investing, Investment Management, Mutual Funds, Regulation, Risk Management, Susan Mangiero, Trading
On December 11, 2015, the U.S. Securities and Exchange Commission (“SEC”) took steps to more actively regulate how derivative instruments are used by registered investment companies such as mutual funds, exchange-traded funds (“ETFs”), closed-end funds and business development companies. According to its Fact Sheet, a portfolio manager would have to either limit leverage via the use of derivatives to… Continue Reading

The Perils of “Sort Of” Investment Risk Management

Posted in Compliance, Disclosure and Transparency, Governance, Investment Management, Risk Management
As someone who writes all the time, I respect words. I acknowledge that being able to communicate clearly is a time-consuming labor and requires care. For those who strive for excellence in this area, keep up the great work. For those who have fallen under the spell of soundbite gimmickry, may I suggest that you… Continue Reading

One Size Does Not Fit All When It Comes To Pay

Posted in Compliance, Disclosure and Transparency, Financial Reporting, Governance, Key Person, Regulation
At a time when skilled talent is hard to find, business executives may want to resist the urge to socially engineer. One tech company CEO learned this lesson the hard way. According to “Seattle company copes with backlash on $70,000 minimum wage” (Seattle Times, August 1, 2015), across-the-board raises to establish a minimum base salary,… Continue Reading

Investment Transparency Now Required in Rhode Island

Posted in Disclosure and Transparency, Fees, Hedge Fund, Investment Management, Pension
Just a few days after the U.S. Securities and Exchange Commission (“SEC”) voted to officially propose that certain registered funds provide a lot more information about their operations, the State of Rhode Island has followed suit. In a May 26, 2015 press release, General Treasurer Seth Magaziner describes the Ocean State as a leader in… Continue Reading

SEC and Asset Manager Disclosures About Use of Derivatives

Posted in Derivatives, Disclosure and Transparency, Investment Management, Liquidity, Regulation, Valuation
Notice anything odd about this announcement? Are we to celebrate this creamy dessert on May 21, 22, 23, 24 and 25? If so, why is the event referred to as a “day” celebration? A quick search on the internet informs that National Vanilla Pudding Day is in fact May 22, 2015 and does not span… Continue Reading

Excessive Fee Litigation and Public Pension Plans

Posted in Disclosure and Transparency, Fees, Investment Management, Pension, Private Equity, Susan Mangiero
Having just returned from a two-day ERISA litigation conference in Chicago, the topic of fee benchmarking is top of mind. During a rousing session about excessive fee allegations, plaintiffs’ counsel Greg Porter (partner with Bailey Glasser LLP) and defense counsel Eric S. Mattson (parter with Sidley Austin LLP) discussed fiduciary litigation, the Exclusive Benefit Rule,… Continue Reading

Investment Risk Management, Kanye West and Paul McCartney

Posted in Broker Dealers, Compliance, Disclosure and Transparency, FINRA, Investment Management, Liquidity, Regulation, Risk Management, Valuation
Thank heavens for the absurdities of life. A few chuckles here and there make the difference between blah and pizzazz in life. A recent example is the Twitterverse response to a recent artistic collaboration between Kanye West and Paul McCartney. Supposedly some of the members of the younger generation are unaware of this Beatle’s musical eminence. See “Genius… Continue Reading

Investment Performance Magic Can Cost Millions

Posted in Compliance, Disclosure and Transparency, Financial Reporting, Investment Management, Regulation
Having spent a few days in Las Vegas over the holidays, one is reminded of the lure of legerdemain. A few bells go off, some flashing lights and a win here and there can tempt even the most staid rationalist into believing that magic can happen. If you have seen “Chicago,” you may recall Billy Flynn’s musical urging… Continue Reading

Do CEOs Work Hard Enough?

Posted in Disclosure and Transparency, Financial Reporting, Governance, Key Person, Regulation, Valuation
By invitation of the head of the finance department, Dr. Chinmoy Ghosh, I am guest lecturing to students this fall as part of a Financial Risk Management graduate-level course. During a recent session about executive compensation – one of the topics I was asked to address – more than a few students opined that CEOs earn too much and… Continue Reading

SEC Reports Strong Enforcement Year Due to New Analytical Tools

Posted in Compliance, Disclosure and Transparency, Financial Reporting, Hedge Fund, Regulation
According to an October 16, 2014 press release, the U.S. Securities and Exchange Commission (“SEC”) reports a “record 755 enforcement actions covering a wide range of misconduct, and obtained orders totaling $4.16 billion in disgorgement and penalties…” for the fiscal year-end ending in September 2014. One reason given for this increase from prior years is the “enhanced use of data… Continue Reading

Investment Firms and Corruption Risk Management in Africa

Posted in Compliance, Disclosure and Transparency, International Investing, Private Equity, Regulation, Risk Management
When I write an article, it is always gratifying to know that someone has read it and found it helpful. Having someone reference your work is nice too. That is why I was happy to learn from my co-author, H. David Kotz, that AFK Insider has extensively excerpted from our article entitled “Avoiding FCPA Liability… Continue Reading

Expert Networks and Fiduciary Duties

Posted in Disclosure and Transparency, Financial Expert, Hedge Fund, Insider Trading, Pension, Regulation
I was recently asked by an attorney I know for my governance opinion about the use of expert networks. He has a pension fund client that is pondering whether to allocate money to a hedge fund that is a frequent user of expert network services. As is typically the case, I answered “It depends.” Is… Continue Reading

Article About Foreign Corrupt Practices Act (FCPA) and Institutional Investors

Posted in Compliance, Disclosure and Transparency, Ethics, Financial Reporting, Fraud, International Investing, Litigation, Regulation, Risk Management
When I was asked to co-author something for The Corporate Counselor, I suggested an article about the Foreign Corrupt Practices Act (“FCPA”) and its implications for institutional investors and their counsel. I had not seen much on the subject yet knew that it was starting to percolate as an important topic for several reasons. First, it… Continue Reading