The cobbler’s children have no shoes. Experts tend not to tend to things at home.
“Errant Charges at Coinbase,” The Wall Street Journal, February 17, 2018 B9. A bitcoin firm ended up charging its customers multiple times (as many as 50!) for the same transactions. Blames its vendors.
Let me see. You can’t work out your own electronic invoicing and you want to store our digital currency? We should trust you why, exactly?
Wouldn’t you think you’d keep a close eye on the processes by which customers are charged and you are paid?
Filed under Accuracy, Board, Controls, Corporation, Directors, Duty, Governance, Interconnections, Internal controls, IT, Oversight, Supervision, Third parties, Vendors
The quality of information is largely based on its accuracy. Excluding others from using that information can also be valuable, such as trade secrets, patents, or copyrights. An additional factor is the information’s timeliness: getting information before someone else allows you to use that information first. Even fractions of a second can matter.
“CME Defect Aids Speedy Traders,” The Wall Street Journal, February 13, 2018, B1. Five years ago, some high-frequency traders took advantage of the small time gap between (a) when they received confirmation of trades and (b) when those trades were reported to the market. Based on this information, they deduced the direction of market movements and sold or bought, as appropriate, before that information was in the market. The exchange fixed this. Sort of, as the problem has reappeared, albeit much smaller. But microseconds matter, when it’s the computers that are doing the trading.
What’s the point? Well, what information would you pay more for to get it sooner? Do you rely on getting information at the same time as (or before) your competitors, allowing you to use your superior skill, foresight, and industry to profit from it?
What’s the first step to get out of a hole? Stop digging.
“Wells Errs in Bid to Make Amends,” The Wall Street Journal, February 12, 2018 B1. Wells Fargo, a frequent star in this blog, was trying to reach out to the 600,000 – 800,000 customers it screwed over by forcing them to buy auto collision insurance. It couldn’t even do that.
First, it reportedly sent refunds to some non-customers. Second, it told some customers that they would be paid the wrong amount. Third, it said it was going to pay refunds to people who hadn’t even bought the insurance. Affected: 38,000 folks. Cause: a vendor’s coding error.
Fourth, Wells Fargo still hasn’t contacted the 110,000 people it overcharged for mortgage insurance rate locks.
And they are in charge of your bank deposits?
“Equifax Denies Breach Of Passport Numbers,” The Wall Street Journal, February 8, 2018 B10. In the hack of its files, Equifax admits exposing information of perhaps 145 million people. Social Security numbers, stuff like that. And credit card numbers and driver’s license numbers. Senator E. Warren says the hack also exposed passport numbers. Equifax says it didn’t.
Who do you believe? One of them is wrong. Which is more likely, that Equifax is lying or that a sitting US Senator didn’t understand Equifax’s submission to Congress? When information is contradictory, how do you minimize risk?
“U.S. Probes Supplier to VW,” The Wall Street Journal, February 1, 2018 B2. Engineering firm under criminal investigation for alleging helping VW cook the emissions tests – altering the nature of the information provided to the government. See also, “Robert Bosch Workers Face Probe,” The Wall Street Journal, February 1, 2018 B3. (Similar allegations, but involving Chrysler).
Are you concerned about your vendors? Do you make sure they comply with law? Do you appreciate the data that confirms your own compliance? What’s it worth to have that data be accurate?
Were this a blog about Crisis Management and Emergency Response, there would be an entry here about what you should do when you hear that someone else in your industry has been doing something bad.
Filed under Accuracy, Board, Compliance, Compliance, Compliance Verification, Controls, Corporation, Data quality, Definition, Directors, Duty, Duty of Care, Employees, Governance, Information, Internal controls, Oversight, Oversight, Protect assets, Protect information assets, Third parties, Value, Vendors
“Shares of MetLife Plunge on Big Charge,” The Wall Street Journal, January 31, 2018 B16. MetLife needed to increase its reserves after “losing track of possibly tens of thousands of retirees owned monthly pension payments.” Loses 9% of share value (and this was before the big drop this week!). This was after they reduced their reserves earlier, resulting in increased revenues. The day earlier, “Pension Snafu Hits MetLife Results,” The Wall Street Journal, January 30, 2018 B1. A “records mistake.” Huh?
People have been and will be fired. Will any senior executives take the hit? What exactly is the company’s business? Where was the Board on this? Do they refund any of their fees? At least the company admitted a material weakness in its financial systems. Is the CFO nervous about what he/she signed? Did the boost affect anyone’s bonus? Did this affect the market?
This was not a records mistake. It was a conscious decision. Who decided to reduce the reserves and just forget about the pensioners who weren’t easy to find?
Filed under Accuracy, Board, Compliance, Compliance, Compliance Verification, Controls, Corporation, Data quality, Directors, Duty, Duty of Care, Employees, Governance, Internal controls, Investor relations, Oversight, Oversight
“Fake Public Comments On New Rules Probed,” The Wall Street Journal, January 25, 2018 A3. Were faked ids used to post comments on proposed federal regs?
When you make comments on a proposed government regulation, do you have to provide your correct name or id? Is there a special problem when the government tries to limit your free speech? Is this fraud (and if so, why?)? Apparently, it is a crime to “knowingly make false, fictitious or fraudulent statements to a US agency.” Is this 18 USC §1519, or something else? Can the government criminalize “fictitious” comments to the government? There’s the 1st Amendment of course, and the right to petition.
For a non-commercial site, how do you stop “spoofing”?