Operational Risk Management framework
, is a non-clearing futures directive commercial corporation, which is directed in upholding brokerage, merchant education, and accessible transaction services through some of its excellent platforms. It is mandated in offering trading strategies across the various classification of the assets such as the future, foreign exchange, options, securities, bonds, wealth management, and international services to the wholesale and customers of the company. Bankruptcy The Peregrine Financial Group was declared bankruptcy after the Chief Executive Officer misused the customers' funds of over $ 200 million which resulted in the financial trouble of the company. Seemingly, the company revealed false bank statements to the regulators. It made the National Futures Association take stern action against the PFG for their fault of falsified transaction activities. The Peregrine Financial Group helped their clients in buying, selling and trading foreign currency and futures and options.
In fact, in that time, these were not the ideal investment opportunities since their values kept on fluctuating as a result of the expected future prices of food and energy commodities and other investment. It would have been significant if the company had a competent financial analyst who could have advised the company on which investments opportunities to invest on based on their expected returns at the end of the trading period. What I would have done as a manager In any case, if I was in charge of the company, I will try to my level best to make sure that I meet the customers' expectation while working towards achieving the organization set objectives and goals. It would only be successful by putting several control measures such as the self-protection tools.
Since many employees are shy to report fraud to their employers. Deliberate setting up an anonymous reporting system. Employees can report evasive action through a website keeping their individuality safe. I would also make sure that the Peregrine Financial Group implements the internal controls. Internal controls directly refer to those programs that are implemented in safeguarding the assets of the assets of the company. The foremost part of solidifying internal controls encompasses changing the assertiveness some staffs have concerning auditors. The auditor's role must be reinforced by ensuring that they are always at the forefront of corporate strategies, practices, procedures, and the new technological advancement making auditors a treasured basis of corporate information. To manage the process successfully, distinct sections work together collaboratively.
Working together upsurges issue attentiveness, reinforces communication, lessens opening for fraud and guarantees a more comprehensive and vigorous internal control process. Preferably, the other way of strengthening internal controls is by making sure that there is a major improvement in the entire process of communication. Liquidation. The Peregrine Financial Group had lousy management in place which made the company be declared bankrupt. The National Futures Association decided to place the Peregrine Financial Group under the liquidation status as a result of the conditions of Mr. Wasendorf. It made the company take further another action which stated that all of their funds were put on hold. Businesses face numerous types of risks which can either cause a significant loss which might lead to bankruptcy.
There were various types of risks that the Peregrine Financial Group experienced as discussed below. Strategic risk occurred when the Peregrine Financial Group's strategies became less efficient, and it made the company struggle in reaching and meeting set objectives and goals. It was majorly caused by the rapid changes in technology which leads to stiff competition in the global market. As a result of the technological changes, it forced the costs of production of the services to increase which led to the increment in expenses. When there is a resounding performance in the company, even the surrounding environment would also benefit a lot. Since most of the companies and organizations engage in the corporate social responsibilities such construction and funding of the health institutions, learning institutions and the general cleaning of the surrounding market centers.
They are also mandated in examining the use of the real and cost-effective opportunities in harmonizing the withholding programs with other insurance firms. For the organization to realize their full market potential, they must first be cost-effective by making sure they minimize and reduce the unnecessary expenses in running the business. They ought also to be channeling their available resources to those projects which would relatively be generating high returns. The rules and regulations must be reviewed, and the necessary changes are made which will ensure that the organization maximizes fully on the available business opportunities in the market. Lastly, the risk managers in collaboration with the General counsel, maintaining control over the entire processes in claiming which ensures there is fair, consistency in settlement of the claims made.
The other departmental managers must join hands and embrace teamwork with the risk manager whereby they would be playing the key role in providing the necessary information for the reviewing and identifying the loss exposures. The management should also provide training, seminars to their employees which will ensure that they are aware of the different types of uncertainties and how they should prevent and control (Kaplan et al, 26). Risk management department plays a critical role in an organization. Risk management framework. No. CMU/SEI-2010-TR-017. Carnegie-Mellon Univ Pittsburgh Pa Software Engineering Inst, 2010. https://resources. org/1812/adc75ed61b7c241635f65ea03b997cfb1d03. pdf Kaplan, Robert S. , and Anette Mikes. "Managing risks: a new framework. https://hbr. deepdyve. com/lp/elsevier/the-construction-of-the-risky-individual-and-vigilant-organization-a-j92DxH910f Norman, Carolyn Strand, Anna M.
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