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The purpose of this paper is to provide excerpts of selected Financial Industry Regulatory Authority (FINRA) Regulatory Notices issued from April to June 2008 and a sample of disciplinary actions during that period.

The paper provides excerpts from FINRA Regulatory Notice 08‐16, Third Party Research Reports; 08‐17, Customer Complaint Reporting; 08‐18, Unauthorized Proprietary Trading; 08‐21, Partial Redemption of Auction Rate Securities; 08‐22, Definition of Public Arbitrator; 08‐27, Midleading Communications about Expertise; 08‐30, Illiquid Investments; 08‐31, Trading Ahead of Customer Orders; and 08‐33, Minor Rule Violation Plan Amendment.

Useful information may be found in each of these notices.

The paper provides direct excerpts designed to provide a useful digest for the reader and an indication of regulatory trends. The FINRA staff is aware of this summary but has neither reviewed nor edited it.

Arguably, how psychohistorians treat entrepreneur life-writing interiorizes the autobiographer’s self, thereby limiting the extent to which self can be accessed by researchers. By advocating a different approach, based on socio-narratology, this paper provides insight into how entrepreneurs in both the distant and recent past construct narrative identities – the textual corollary of “storied selves” – within their autobiographies.

The object of analysis is the failed entrepreneur autobiography, straddling two sub-genres – “projective” and “confessional” – which both serve to rehabilitate the author.

Narratological analysis of Nick Leeson’s Rogue Trader autobiography reveals how the author deftly draws upon the culturally recognizable trope of the “rogue as trickster” and “rogue as critic” to contextualize his deceptive and illegal activities, before signaling his desire for rehabilitation by exiting banking and futures trading – thereby enacting the “rogue as family man”.

The application of a narratological methodology opens up new avenues for understanding the interplay between Western cultural institutions, entrepreneur selves, and autobiographical writing.

This paper shows that narratology provides a new methodological window through which management historians can view entrepreneur autobiographies.

Recent failures and scandals in the banking and financial services industry have served as catalysts for anxiety about operational risk. In particular, the Basel II accord emphasises the need to develop methodologies for assessing and managing this category of risk. However, operational risk is said to be an elusive and problematic concept. This paper aims to examine how certain events in the banking and financial services industry become enframed and constructed as operational risk and how such risk is managed.

The paper draws on the sociology of risk literature to analyse how an “unauthorised trading” event (and associated losses) that occurred in the currency options trading desk of the National Australia Bank (NAB) was enframed and constructed as operational risk. Data are gathered through metadiscourse analysis of textual materials relating to this event.

The analysis reveals the social and institutional mechanisms underlying the construction of risk and the contested nature of risk knowledge. In particular, it highlights the significant role of media discourse in articulating risk claims and dominating public discourse about risk. It also highlights the moral character of the concept of risk and how the moralising of risk discourse leads to the creation of particular forms of subjectivities and the operationalisation of certain risk management rationalities in NAB.

The paper will be helpful in improving researchers' and practitioners' understanding of how, in a given field of possibilities, particular events become constructed as operational risk.

Research into rural entrepreneurship continues to expand, albeit slowly. A common theme in the literature is the creation of value and its extraction from the environment. Rural entrepreneurship potentially covers a wide gamut of activity including the illegal. Also studies into agricultural entrepreneurship particularly traditional accounts of “rurality” tend to emphasise the rural idyll. Most studies tend to concentrate on the application of entrepreneurial theory to issues of rurality and as such exist on the margins of entrepreneurship research – being primarily studies into rurality and not entrepreneurship per se. Rarely do such studies impinge on issues of illegal enterprise that shatter this rural idyll. As a consequence, rural and farming rogues have been neglected as subjects of research. Yet, in the present perceived climate of economic decline in agricultural income, extracting value from the environment can be difficult and can give rise to illegal enterprise in the countryside as well as an increase in the prevalence of farming rogues. The case story, presented in this paper relates to one such illegal enterprise, namely the illegal slaughter of sheep for the Muslim “halal” market, known to those in the know as the smokies trade. Using the case story methodology this paper explores an issue of contemporary illegal enterprise in the countryside telling an important story that is otherwise difficult to evidence empirically.

The purpose of this paper is to recognize the effect of the VAT fraud upon the market prices and to assess the occurrence of money laundering on the carbon emissions market. The paper presents an analytic breakdown of the MTIC pocketed funds and estimates the bearish impact of the VAT trade on the carbon prices. The VAT carousel could also be used for all the steps of money laundering given the lack of control and surveillance of various trading firms.

In a previous work by Frunza and Guégan it was shown that the European carbon market is strongly influenced by fundamentals factors such as oil, energy, gas, coal and equities. Using public market prices and volumes for both futures and spot exchanges, the model allows us to assess and quantify the spread between the observed carbon prices and the theoretical fundamental prices. The dataset analysis reveals that the spot volumes remained abnormally high compared to an empirical economic level, even after the end of the VAT fraud on the organised exchange. These abnormal volumes could be explained by the occurrence of speculative trading linked to the money laundering.

Findings present an analytic breakdown of the MTIC pocketed funds and a bearish impact of 2‐3 euros upon the carbon prices. The paper also explains the origin of a relative persistence of high volumes on the spot market by proposing a model of placement, layering and integration steps on the carbon emissions market, similar to the VAT carousel.

This paper is the first study that quantifies the market manipulation effect due to VAT fraud. The work is also unique as it provides the first estimation of money laundered on the carbon emission market.

Corruption in banking — the topic of this paper, is at the very heart of such practices as money laundering. To illustrate this point, examined below are four specific cases, encountered by the author as an official of the US Federal Reserve. These cases are Banco Nazionale de Lavoro (BNL), The Daiwa Bank, Barings Bank and, of course, the Bank of Credit and Commerce International (BCCI).

Over recent decades, banks and bank regulators have devoted substantial resources to managing market risk and credit risk. More recently industry and regulatory focus has shifted to the mitigation of operational risk. This article addresses the Advanced Measurement Approaches under which banks would be allowed to determine capital requirements, based on their own internal assessment of operational risk, according to standards set by the Basel Committee. The authors propose adopting the concept of “nearmiss” risk assessment employed in the chemical, health, and airline industries to internally evaluate operational risk.

This paper aims to focus on a number of unexpected disclosures by major Australian banks, to highlight the subjectivity of financial reports and their failure to present an accurate portrayal of the underlying realities, and to propose that corporate governance disclosures are required to provide reassurance that financial reports are trustworthy.

Mouck's institutional framework of financial regulation portrays financial reporting as a “game” played within a set of rules. It provides insights about the subjectivity of financial reports which are illustrated with archival evidence from banks' reports and activities.

The banks' financial reports were shown, in the light of later revelations, to portray an unrealistic view of their operations. Disclosures about corporate governance practices play a strong legitimising role, enhancing perceptions that financial reports correspond with organisational realities.

This study considers a narrow population of companies within one industry. By extending the focus, greater evidence could be provided that accounting standards and financial reporting requirements have lost their connection with business practices.

In spite of financial reporting reforms, financial reports are becoming less reflective of companies' activities and performance. This questions the usefulness of accounting standards, and the effectiveness of regulatory systems. Future reforms to accounting standards need to address these issues.

The paper demonstrates the contention that the financial reports of several Australian banks fail to match the realities that lie beneath is really a broader challenge to the usefulness and credibility of Australia's system of financial reporting and regulation.

In February 1995, Simon Jones and Tony Railton of Barings Bank planned a meeting that afternoon with their star Singapore trader, Nick Leeson, to iron out a few financial discrepancies that had arisen in his Far Eastern office. A few minutes after the meeting was confirmed, Leeson made an excuse to leave the office … and never came back. It is common knowledge (as well as management folklore) what Leeson did leave behind – debts of over £850 million that brought down one of England’s most prestigious banks. At the time we thought that this scandal was a one‐off, never to be repeated story of deception and mismanagement. But when John Rusnak was arrested for covering up losses of £529 million at AIB earlier this year, senior managers were forced to ask themselves “could this happen to my organization?”

In this extract from his new book, Handling Investment Risk, the author examines operational risk and, with case studies ranging across Nigerian fraud, the split capital trusts scandal, Chase Manhattan in Russia and Deutsche Morgan Grenfell in 1996, shows how to deal with all the issues involved.