Daily Market Update - November 26, 2014

Merrill Lynch criticized by regulator for ‘simplistic’ risk management… Companies not ranking corruption risk highly enough… Sony Pictures suffers cyber attack…

Risk Management News

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Merrill Lynch criticized by regulator for ‘simplistic’ risk management
The Bank of America’s UK Merrill Lynch business has been criticized by regulators for weak risk management. The Prudential Regulation Authority says the firm needs to be “more comprehensive” in its evaluation of the risk posed by business partners and calls its current risk management practices too “simplistic”. The criticism only refers to Merrill Lynch International, based in London. The unit is responsible for around 10 per cent of Bank of America’s revenues.
 
Companies not ranking corruption risk highly enough
Companies are not doing enough to combat the risk of corruption in their organizations. That’s the message in a new report from risk management firm Control Risks. Firms are either not investing enough in compliance teams and/or are underestimating the risk. Regulators throughout the world are more vigilant with anti-corruption measures and financial penalties are frequently hitting new highs. Many emerging countries, where corruption has not always been handled robustly are now doing so. The Control Risks report found that most companies are optimistic that they will not face an investigation in the next two years and most (87.9 per cent) have policies banning the taking of bribes for contracts.
 
Sony Pictures suffers cyber attack
Sony Pictures has been forced to shut down email and websites after suffering a cyber attack. The entertainment company’s website was accessed by hackers who posted a skull and crossbones image together with a warning that they would expose all of the company’s ‘secrets’. A group known as Guardians of Peace have claimed responsibility for the attack. Sony says it is investigating. The attack comes just months after the company’s PlayStation network was compromised by online attackers. 

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