Why do supervisors get the big bucks?

Sometime head feints are acceptable; sometimes they are felonies.

“Citi to Pay Fine Over ‘Spoofing’ Tactics,” The Wall Street Journal, January 20, 2017 B12.  Traders entered large orders, intending to immediately cancel them, hoping thereby to fool the market.  This has been against the law since 2010.  Cost: $25 million in fines.

The supervisors of the traders were accused of failing to supervise.  Scolding, but not reporting, the offending trader was not sufficient.  Unclear whether the supervisors will themselves be prosecuted.

What does it say about governance when the people responsible for making sure traders operate legally aren’t penalized when the traders stray?  Perhaps if the government or the company penalized the supervisors (or their supervisors), the traders and others would get the compliance message.  Citi paid the fine, but the Citi shareholders bear the costs.

 

Advertisements

1 Comment

Filed under Controls, Duty, Employees, Governance, Internal controls, Managers, Supervision, To report

One response to “Why do supervisors get the big bucks?

  1. Ian

    One of the challenges is to have automatic systems in place that can pick-up on these trades and provide the alerts for review.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s