Friday, March 02, 2007
SEC Alleges Insider Trading - Should Pension Investors Care?
Former U.S. Senator Alan Simpson is said to have claimed "If you have integrity, nothing else matters. If you don't have integrity, nothing else matters."
After reading the SEC's March 1 press release about insider trading, these words ring loud and clear.
If you haven't seen it yet, click here for details about charges against fourteen individuals "in connection with two related insider trading schemes in which Wall Street professionals serially traded on material, nonpublic information tipped, in exchange for cash kickbacks."
Efficient markets are crucial for the pension funds which invest over $10 trillion in global assets. Trust, integrity and internal controls are the lifeblood of a system that works.
If there is a silver lining attached to these allegations, it is to remind fiduciaries of the importance of a due diligence process that goes beyond financial risk management. Credit checks, questions about oversight of traders and continued verification of trades are just the beginning.
Labels: Efficient Markets, Insider Trading, Regulation
posted by Susan Mangiero at 3/02/2007 06:08:00 AM | 0 comments | links to this post
PENSION RISK MATTERSSM focuses on pension financial risk issues from a governance and fiduciary perspective. The goal is to identify important topics, ask thought-provoking questions, examine best practices and encourage meaningful debate about the $10 trillion global pension industry upon which millions of individuals depend. Author and consultant Susan M. Mangiero, Ph.D. is a CFA charter-holder, Accredited Valuation Analyst, Accredited Investment Fiduciary Analyst and certified Financial Risk Manager. Dr. Mangiero combines many years of experience in finance with a keen interest in solving problems and simplifying the complex (
