The Case Who Was Responsible For The Downfall Of Kidder Harrie & Company
Kidder, Peabody & Co.
Group Project
1. Who is to blame for the downfall of Kidder Peabody & Company?
Arguments for guilt and innocence:
-- Joseph Jett –
Guilty
Did not reveal the accounting glitch to his superiors and took advantage of the system deficiency
Continually entered a new forward recon so the loss would not be calculated and recorded thus knowingly hiding the daily loses
If Jett did not knowingly commit fraud and acted within KP guidelines, that does not exonerate him from guilt. He was tasked with generating profits while acting within the framework of the financial regulatory environment. Instead, whether it was with intent or out of ignorance, Jett acted irresponsibly and should carry some blame for the firm closing and …show more content…
This made it difficult to inspect when all are busy trying to meet their own trading quotas
At fault for not employing proper controls to ensure that his departments trading activities and financial reporting were compliant and sustainable.
He allowed Mullin to refuse to review the reports that outside counsel recommended be reviewed.
He also failed to properly oversee the activity of his direct report, Bernstein, head of risk management for the Fixed Income division.
Innocent
Ordered outside counsel to review the government desk when profits
Group Project
1. Who is to blame for the downfall of Kidder Peabody & Company?
Arguments for guilt and innocence:
-- Joseph Jett –
Guilty
Did not reveal the accounting glitch to his superiors and took advantage of the system deficiency
Continually entered a new forward recon so the loss would not be calculated and recorded thus knowingly hiding the daily loses
If Jett did not knowingly commit fraud and acted within KP guidelines, that does not exonerate him from guilt. He was tasked with generating profits while acting within the framework of the financial regulatory environment. Instead, whether it was with intent or out of ignorance, Jett acted irresponsibly and should carry some blame for the firm closing and …show more content…
This made it difficult to inspect when all are busy trying to meet their own trading quotas
At fault for not employing proper controls to ensure that his departments trading activities and financial reporting were compliant and sustainable.
He allowed Mullin to refuse to review the reports that outside counsel recommended be reviewed.
He also failed to properly oversee the activity of his direct report, Bernstein, head of risk management for the Fixed Income division.
Innocent
Ordered outside counsel to review the government desk when profits