Investigation of Refco Scandal
One of the loudest corporate scandals was Refco crash. Even though there is official information that there was no possibility to learn about Bernett?s transactions, some of their customers state that there were losses on their accounts and there an opinion that the debt could result from that. One of the customer has responded to such information that there isn?t any chance that small losses from his account could be compared to more than $400 million debt. Even though it seems that this information doesn?t make any difference to Refco no exact amounts have been provided. The companies which worked with Refco seem to hide some information or avoid its spread. This might be one of the attempts to hide what were their real relationships with this company.
The major reason of Refco scandal was a strong conflict of interests of several shareholders groups. The head of this company, shareholders and investigators are always interested in increase of profit. But if there is a place for criminal deeds, low level of check then all negative factors lead to a scandal.
Even though corporate government seems to be an independent leader of this situation, when it comes to making any decisions the first thing they have to make sure of is that their shareholders are satisfied. It is difficult to imagine that Board of directors can make decisions driving by their own interests because it is pressured by shareholders all the time.
It is obvious that there was a problem in relationships between Board of Directors and other shareholders in Refco. The reason of their collapse was a person who was driven by personal interests and needs. There is no doubt that not everything is clear in this conflict but now it is not possible to find what really happened with a company which had so much support and recognition.
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