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Posts Tagged ‘financial risks’

Private equity update: Optimistic for more deal activity

March 22, 2016 Leave a comment

magnifying_glassDeal volume in Q4 2015 was very high, with many private equity firms charging hard for year-end closes. However, January experienced a slower pace for deal volume. Our team suspects many private equity firms were evaluating their portfolios, if sellers will adjust their pricing, and evaluating any potential impact from China’s economy.

In addition, the actions and commentary of the Fed in January when it comes to raising interest rate, has provided some uncertainty.

With February behind us, and only a few weeks away from the end of Q1, activity has steadily increased, and it appears as if the rest of 2016 will continue to follow suit. Deal flow has increase quite well, and in speaking with deal professionals and advisors, many seem to be cautiously optimistic for 2016 overall, as pipelines are filling up. Read more…

The risk of bitcoin

November 27, 2013 Leave a comment

bitcoinYou cannot pick up a newspaper these days without reading about bitcoin and the other digital currencies that are vying to be an alternative to traditional fiat money issued by nation states. The price of a bitcoin has skyrocketed this year. If only we had ditched the stock market and put all of our coin in bitcoin last January.

But, some business writers are starting to question the premise of digital currencies. The latest skeptic is Andrew Ross Sorkin writing in the New York Times. Sorkin hints at the problems, but I find that even he understates the risks, both of the currency itself and potential problems for organizations that choose to trade in and support digital currencies.  Read more…

Social media use as a means to communicate with investors is on the rise at banks and financial firms: beware the risks

twitter_wallstWith the release of the Securities and Exchange Commission’s new rules governing disclosure of social media use, an increasing number of companies are using sites like Facebook and Twitter to communicate with customers. Financial firms and banks are among those that are allowing employees to use social media sites on the job to post market updates and communicate with investors through tweets and status updates. Bank of America, Morgan Stanley, Citigroup Inc, and Goldman Sachs are among those on Wall Street incorporating social media use into their corporate communication strategies, granting stock analysts and traders use of Facebook, Twitter and LinkedIn in order to follow market trends and release financial information.

Despite the A.P.’s Twitter hoax last month, (which caused a brief drop in the Dow Jones Industrial Average after a false report about a bomb at the White House), social media use continues to expand Read more…

Attention bankers: are you at risk for cybercrime?

financial cybercrimeCyber breaches for banking institutions have been a significant peril since computers entered the banking sphere a generation ago. Unfortunately, today the threat has been multiplied in complexity and magnitude. Last year, cyber thieves, disguised as a commercial customer, submitted nearly $700,000 worth in files of ACH credits to a large bank, using the proper ID and password information to authorize the transactions. Despite the bank’s own sophisticated scoring model used to validate the payment, it failed to catch the fraudulent activity; by the time the issue was discovered, the bank’s customer had lost a majority of the funds.

Kenneth Proctor, Managing Director, Risk Management and Compliance of Abound Resources, a leading risk control consultant to financial institutions, outlines many of risks and defensive practices Read more…

D&O premiums jump as small banks feel pressure from FDIC

March 25, 2013 Leave a comment

FDICMany small banks have been heavily hit with rising D&O insurance premiums, as federal regulators seek to recover some of the $86.8 billion it paid out to community bank lenders during the financial crisis. The Federal Deposit Insurance Corporation (FDIC), has filed 19 suits against former executives and directors of collapsed banks since October. That number is expected to increase, as the agency has also authorized 94 lawsuits – the initial step regulators take immediately following a bank’s failure and prior to filing an actual claim. The FDIC then has three years from the time the bank closes to file suit. FDIC officials say the agency collected around $337 million in settlements last year and nearly $232 million in 2011.

The lawsuits primarily target directors and officers of small banks accused of approving loans that later contributed to the bank’s collapse. Insurance experts say D&O rates for small banks Read more…