Raffles Hotel Marketing Communications

Assignment #4 Observation Report A: Describe one on-the-job problem of issue encountered and how it was resolved. I first encountered this problem two weeks into my internship with Raffles Hotel Marketing Communications. After my orientation week, it was finally time for me to take on projects on my own and start communicating with some of the clients and media the department would follow up from time to time. One of the projects that I was tasked was to prepare the Arabic version of Raffles Hotel’s fact sheet for the Saudi Arabia sales trip that the Director of Sales and Marketing will be doing at the end of the week.This request came in as a last minute project as there were several delays in the process of translation and positioning of the facts and information. In what limited time I had, it does seem that I would not be able to complete to the fact sheet in time due to the constant delays from the Translation Company and external help that took quite some time to get bac k to me. Time wasn’t on my side and I knew I cannot afford to mess up this project. That was when I decided to adopt one of the many values that Raffles Hotel believes in – taking ownership of guest requests.Instead of sitting around waiting for things to happen and emails to be replied, I decided that it was time for me to take action and get what needs to be done, done. The issue was eventually resolved after I made personal trips around the hotel, asking for help from colleagues from various departments that have knowledge in the Arabic language. I managed to prepare the Arabic fact sheet of Raffles Hotel in time for the Saudi Arabia sales trip and have shown my managers that I am someone they can trust to get things done on time and to the best of my abilities.

Madoff Scandal

Contents Introduction2 Early Career2 The Firm3 Sales Strategy4 Investment Strategy5 The Scandal7 He was not alone9 The Markopolos Whistle11 The collapse13 Charges and Sentence13 The Victims14 2009 Ponzi Schemes16 The SEC Failure17 SEC post- Madoff19 Hedge Fund Transparency20 Conclusion21 Bibliography25 Tables Table 1: List of Madoff Clients (taken from the â€Å"The New York Times†, last updated June 24, 2009)15 Table 2: 2009 Ponzi Scheme SEC Charges17 Figures Figure 1 Fairfield Sentry vs Gateway6 Figure 2 Madoff Investor Funds (taken from http://orgnet. com/madoff. html)7 Introduction Operating from central Manhattan, Bernie Madoff developed the first and biggest global Ponzi scheme, an event of greed and dishonesty that lasted for more than 20 years, in which $65 billion dollars vanished from the pockets of some of the world’s richest people, charities and ordinary investors alike. This scheme lasted longer than any other white collar crime in history and along the way ruined countless individuals and organizations. The Madoff Ponzi scheme has changed the rules of trust that governed the money game. † Unlike other similar schemes, Madoff’s Ponzi scheme also scammed wealthy and investment savvy individuals that Madoff associated with. Bernard Madoff is a former financier, American hedge-fund investment manager, chairman of the NASDAQ (National Association of Securities Dealers Automated Quotations) stock exchange, and chairman of the firm Bernard L. Madoff Investment Securities LLC. He is the main conspirator of the history’s largest investor fraud committed by a single person. As a result of his act, Madoff was sentenced on June 29th, 2009 to 150 years in prison for crimes that the judge called â€Å"extraordinarily evil†3 and imposed a sentence that was three times as long as the federal probation office suggested and more than 10 times as long as defense lawyers had requested. Early Career Bernard Lawrence Madoff was born in New York City on April 29, 1938 and grew up in a predominantly Jewish neighborhood. He earned a degree in political science from New York’s Hofstra University in 1960 and founded the Wall Street firm Bernard L. Madoff Investment Securities LLC the same year. 1 He was a pillar of finance and charity. As an outstanding philanthropist he served on boards of nonprofit organizations around the world such as businesses, charities and foundations, many of which were entrusted by his endowments. The firm started as a penny stock trader with $5,000 dollars he saved from working as a sprinkler system seller and lifeguard. In the beginning the firm started trading common stock over the counter (OTC) through the National Quotation Bureau using Pink sheets. It later challenged the New York Stock Exchange (NYSE) old brokers by using powerful marketing techniques to win clients and promoting electronic trading using innovative computer information technology. His firm grew with help from people around him such as his father-in-law, who referred him to friends and family. Madoff helped created NYSE rival, NASDAQ, where he later became the chairman. The Firm Bernard L. Madoff Investment Securities LLC functioned as a securities broker and/or dealer in The United States and internationally. Headquartered in New York City, it provided executions for dealers, brokers and financial institutions. The firm had been one of the top market makers on Wall Street with Madoff as the principal face. In plain terms, a market maker is an institution (brokerage company or bank) that is ready to execute stock trades (buying and selling) at every second of the trading day and charges a small fee for every trade via the use of a spread in the ask or bid price. It functioned as a third-maker provider by directly implementing commands from retail brokers. At one point, Madoff Securities was the largest market maker at the NASDAQ and in 2008 was the sixth largest market maker on Wall Street. Sales Strategy Around the 1970s, Madoff began administrating money for investors, some on them he knew personally and several others who belonged to clubs he was member of. He attracted billions of dollars and several large hedge funds also invested in the firm because he did not charge usual fees and only collected fees for processing trades. Madoff offered modest and steady returns to exclusive clients instead of offering high returns to all clients, giving the appearance of his firm to be exclusive. The firm’s annual returns were abnormally consistent, a key factor in achieving the fraud. Most business men believed the story that a single person could generate returns of 12 to 13 percent a year trading the stock market no matter what happens without a single down quarter. 7 Some of these people applied for membership to the clubs that Madoff was a member of, in order to meet and be accepted by him. In addition, he never hustled anyone for investing with him; instead he let them come to him. Thus, he created this aura of exclusivity around him and everyone wanted to be a part of his club. One of the groups targeted by Madoff was the â€Å"Jewish circuit. Being Jewish, Madoff attracted many wealthy Jewish people he met at country clubs on Long Island and Palm Beach. This was an Affinity Ponzi Scheme, as it was called by Newsweek article. 7 Affinity fraud includes investment frauds that prey upon members of identifiable groups, such as religious or ethnic communities, language minorities, and the elderly or professional groups. Around 1995, some of the most prominent Jewish individuals in finance and industry began to invest with Madoff. 1 His most effective recruiter, Jacob Ezra Merkin, was president of the Fifth Avenue Synagogue, member of Yeshiva University, Carnegie Hall and other nonprofit organizations. Mr. Merkin started the investment firm named Gabriel Capital Group. Embraced by philanthropies and installed in a superior position of trust, Merkin seemed to be a Wall Street wise and trusted person to manage other peoples’ money. 1 Investment Strategy His investment strategy consisted of purchasing blue-chip stock, from well established companies like Coca Cola, Intel and General Electric, having stable earnings and no extensive liabilities, and taking option contracts on them. Typically, a position will consist of the ownership of 30-35 S&P 100 stocks, most correlated to that index, the sale of out-of-the-money calls on the index and the purchase of out-of-the-money puts on the index. † When done correctly, this strategy creates boundaries in the stock and protects them against a quick decline in the share price. The investment strat egy used in Madoff’s feeder fund, Fairfield Sentry, is called the split-strike conversion strategy and involves a combination of stocks and options. In plain terms, Madoff bought 40-50 stocks from the S&P 100 index. He then bought put options on the index at strike prices below the market's current level and sold call options above the index's current price. It is similar to using collars, an options strategy that limits losses along with the gains for a particular stock. The following chart outlines the returns of the Madoff feeder fund against Gateway, a fund running the same split strike strategy. A feeder fund is a fund that conducts virtually all of its investing through another fund. Madoff used such feeder funds to mask the fact that he’s acting like a hedge fund in order to avoid SEC investigation. Figure 1 Fairfield Sentry vs. Gateway After the stock market crash of 2001, Gateway follows a downward path for a period of almost 3 years, before it starts to gain positive traction that will last until mid 2007, just in time for the mortgage meltdown that ignited one of the worst recessions in history. Interestingly enough, Madoff’s returns shows no signs of volatility and continue to gain positive traction with only minor fluctuations. Apparently he worked with multiple feeders and the network of individuals and funds were set up to pass money to him. Most of the investors did not know that all of their money was going to the same place: Madoff’s firm. The next diagram depicts the depth and interconnections of Madoff’s funds. The directions of the arrows represent the direction of the money flow. Figure 2 Madoff Investor Funds The Scandal The investment scandal was unveiled with Madoff’s confession. He reportedly confessed to his two sons during the first week of December 2008 that his business was â€Å"giant Ponzi scheme. † Madoff sons, Mark and Andrew, turned him in to U. S authorities on the day after his confession. On December 11, 2008 he was arrested and charged with securities fraud; also known as stock fraud and investment fraud, securities fraud covers a wide range of illegal activities, all of which involve the deception of investors or the manipulation of financial markets. He said to the agents that there was no innocent explanation to the fraud that cost clients $65 billion dollars. He traded and lost money and paid investors with money that was not there. How did Bernard Madoff set the most audacious fraud in history? Madoff said that had absolutely nothing, everything was just a big lie and it was essentially a giant Ponzi scheme. No one ever questioned the investment strategy and resources of the firm. No verification of the accounting was ever made. 7 A Ponzi scheme is a type of illegal pyramid scheme. It is named after Charles Ponzi who became infamous throughout the United States for using the technique in the early 1920s. The Ponzi scheme operation pays returns to investors from their own money or from money paid by new investors, rather than from actual return earned. This type of schemes attracts many investors because it offers high and consistent returns that other investments cannot provide. Eventually the system is destined to collapse under its own weight because earnings are usually less than the payments. â€Å"The business had been insolvent for many years. † Madoff was lying to his clients when he said he was investing their money and generating stable returns. 3 The money of new clients was used to pay clients who wanted to cash out. Some may still ask the question of why he started the scheme in the first place. A possible explanation of his actions could be that he incurred some trading losses and in order to recoup them quickly, put a quick plan together where he would shuffle money between new and old accounts. Initially he may have had the intention of paying all the investors back, but since his real investing strategy did not work fast enough, he stuck to the scheme. His initial intentions were probably not to carry on indefinitely to its present point. However, once his real trading strategies were not producing enough returns to cover his advertised returns (when the market was performing well), he continued until he lost control. If the economy were not in a recession, he would most likely keep going. The only reason he gave up is because investors started withdrawing money and he could not cover the upcoming withdrawals. If the economy kept going strong, Madoff would have been able to attract new money and continue living his double life as usual. He was not alone Few people knew that Bernard Madoff had a highly structured second life for more than 20 years. Bernard Madoff confession and the afterward fraud scandal triggered the investigation to uncover Madoff’s mysteries. He initially claimed that he committed the crimes all by himself, but because it extended trough decades and continents â€Å"a fog of suspicion immediately engulfed Madoff family members who worked at the firm, as well as employees and business associates. There were some small clues on how he pulled off the massive fraud, for instance, the 1980s server that Madoff refused to replace even though some data had to be typed by hand. When government investigated the machine it discovered that it was the heart of the fraud. The statements printed out from this old IBM machine showed trades that were never made. 15 First, the in vestigators turned to the accounting department. Madoff’s accountant David Friehling was also charged with securities fraud, investment adviser fraud and false filings made to the SEC. Unlike any other professional who protects the interests of his clients, accountants have the commitment to protect the public by ensuring accurate financial reporting. â€Å"They are the first line of defense against fraud. † Friehling’s duty at the investment firm was to ensure clients’ securities and money were they when they wanted to withdraw it. In addition, the SEC filed a civil enforcement action against him alleging that he did not perform his duties as an auditor. David Friehling was the auditor and the bookkeeper, which means that he audited his own work. It’s no great surprise that he found nothing wrong with any of his own work. †18 Next, they turned attention to the person second in command at Madoff’s firm. Frank DiPascali was Madoff’s right hand man for 33 years and his unofficial title was director or of options trading and chief financial officer. Nobody was sure what he did or what his official title was, but everyone knew he was a big deal. DiPascali rose to the position of CFO despite his lack of education and financial experience industry. On August 11, 2009, he pled guilty to ten counts of fraud related to the Madoff investment scandal and he is currently trying to negotiate his sentence (to be set on May 2010) in exchange of information of additional people involved in the scheme. Madoff trusted DiPascali completely to keep the secret of the scam operations. DiPascali manipulated fake returns on some key investors and if one of these clients had large gains, he would fabricate a loss to reduce the tax bill. 15 This means, if true, that these investors knew their returns were suspicious. JP Morgan Chase was the primary bank Madoff used to make his Ponzi deposits. According to one estimate, his deposits totaled $5. 5 billion sometime in 2008, and the after-tax profits grew to $483 million over a period of sixteen years. The bank withdrew a total of $250 million in the summer of 2009, due to suspicions arising from due diligence in Madoff’s investment-advisory business. According to a pending lawsuit against the bank: â€Å"Upon acquiring this knowledge, Chase entered into a conspiracy with Madoff and BMIS in violation of the federal Racketeer Influenced and Corrupt Organizations Act (â€Å"RICO†), 18 U. S. C.  § 1961 et seq. 19Depending on the outcome of the lawsuit, along with many more to come, JP Morgan Chase may have to shell out hundreds of millions of dollars in settlement. Madoff’s family was also the center of attention to find clues of Bernard Madoff’s fraud, although none of them have been charged or accused so far. During the plea hearing Madoff took all the responsibility of the fraud most likely to c over up his family. Peter Madoff, Bernard Madoff’s brother, was the chief compliance officer of the firm. He was in charge of ensuring adequate internal control and that the client funds and securities were properly protected. Even though Madoff sons, Mark and Andrew, did not have any position with the investments firm, they were involved in other areas within the firm. They are the ones that turned Madoff in. The family must have known about the long running scheme and should be indirectly responsible for some of the investor losses incurred, as the scheme had supported their lavish lifestyles. Irving Picard, the court appointed trustee in charge of liquidating Madoff’s firm, sued some of the Madoff family members (two sons, brother, niece) for $198. 7 million seeking defrauded investor damages. The Markopolos Whistle Bernard L. Madoff Investment Securities LLC firm was inspected at least 8 times and he was personally interviewed twice in a period of 16 years by the SEC and other regulators before being uncovered. For years, he avoided regular reviews by saying that he was managing accounts for hedge funds instead of running an investment advisory business. During the years of 1999 and 2000 the SEC was worried that the firm was violating a trading rule and sent examiners to investigate but in response Madoff summarized new procedures to deal with the findings. 12 In 2001 some outsiders were becoming suspicious of Madoff’s firm activities. Harry Markopolos, Barron’s, a Dow Jones & Co. publication and Marhegdge, a hedge fund trade publication, raised concerns about Madoff’s steady returns. 12 In 2005 Mr. Markopolos met with SEC investigators in New York and prepared a 21-page report entitled â€Å"The World’s Largest Hedge Fund is a Fraud† summarizing his concerns. The memo specified 29 red flags and in part concluded that â€Å"Bernie Madoff is running the world’s largest unregistered hedge fund† and â€Å"†¦yet since Bernie Madoff is not registered as a hedge fund but acting as one via third party shields, the chances of Madoff escaping SEC scrutiny are very high. 12 The SEC examined Madoff and did not find any violations. He failed for 8 years to get SEC to step in until the scam collapsed and prompted Madoff to confess. In his report, Markopolos clearly outlines some pretty obvious (by now) facts that the regulatory authorities omitted. Here is a short summary of some points that stood out: †¢If the Madoff returns are legitimate, they’re due to insider trading (unlikely scenario). If they’re illegitimate, they’re due to the setup being a Ponzi scheme (likely scenario). †¢The secrecy around the fund’s assets doesn’t make sense as a typical hedge fund would brag about such returns. The secrecy is probably due to the fact that Madoff doesn’t want the regulatory authorities to know he exists as a secret hedge fund. †¢Since Madoff is a broker-dealer, he can generate any trade tickets he wants, therefore generate false information. †¢The Madoff family has held important leadership positions in NASD, NASDAQ ® and other prominent industry bodies that would not be inclined to lead an investigation. †¢Out of 174 months, only 7 months (4%) saw negative returns in Madoff’s Fairfield Sentry fund. No MLB hitter bats . 60, no NFL team has ever had a 96-4 record out of 100 games, and no money manager is up 96% of the months. †¢Since Madoff is not registered as a hedge fund but acting as one via third party shields, his chances of escaping SEC investigations have remained high. The collapse The final weeks of the biggest scheme in history began on December 2008 when the market continued to fall. Madoff struggled to keep the scheme afloat wh en investors tried to withdraw $7 billion from the firm. In typical Ponzi scheme fashion, Madoff desperately needed money from new investors to pay off existing investors. Ten days before his arrest, he received $250 million dollars from Carl Shapiro, a 95 year old philanthropist and entrepreneur, and one of Madoff oldest friends. Mr. Shapiro helped Madoff launch his investing career by giving him money to invest in 1960. He also asked others to invest including Wall Street financier Kenneth Langone. Madoff said he was raising money, between $500 million and $1 billion, for a new investment vehicle for exclusive clients. Mr. Langone declined to invest. 13 Mr. Langone’s denial could have been based on quantitative analysis that most of Madoff’s investors failed to undertake. In addition, by the time Madoff proposed the new investment vehicle to Mr. Langone, rumors of his questionable returns had increased considerably. Charges and Sentence â€Å"On March 10, 2009, a Criminal Information was filed in Manhattan federal court charging Bernard L. Madoff with eleven felony charges including securities fraud, investment adviser fraud, mail fraud, wire fraud, three counts of money laundering, false statements, perjury, false filings with the United States Securities and Exchange Commission (â€Å"SEC†), and theft from an employee benefit plan. † The case is United States v. Bernard L. Madoff, 09 Cr. 213 (DC). The criminal information or complaint declared that Madoff had defrauded his clients for $65 billion. On March 12, 2009 he pleaded guilty to all eleven counts and on June 29, 2009 he was sentenced to 150 years of imprisonment at the Metropolitan Correctional Center in New York (he was later moved to a prison in Butner, North Carolina) and $170 billion in restitution. A breakdown of his sentencing is given below:19 †¢40 years for two counts of international money laundering †¢20 years for securities fraud †¢20 years for mail fraud 20 years for wire fraud †¢20 years for false filing with the S. E. C. †¢10 years for money laundering †¢5 years for investment adviser fraud †¢5 years for false statements †¢5 years for perjury †¢5 years for theft from an employee benefit plan The Victims Some of Madoff’s clients included hedge funds, banks, charities, universities, astute financiers, hospitals, film prod ucers and many others. According to the latest Trustee Interim Report assigned for fund recovery, as of June 30, 2009 the recovery of funds from Bernard Madoff has been $1,088,507,818 with an additional $13. billion in incoming recovery requests. A short list of the investors with the largest losses follows: CLIENTTYPE OF CLIENTEXPOSURE Fairfield Greenwich Group Financial Firm$7. 5 Billion Kingate ManagementFinancial Firm$3. 5 Billion Tremont Group HoldingsFinancial Firm$3. 3 Billion Banco SantanderFinancial Firm$3. 1 Billion of client exposure Bank MediciFinancial Firm$2. 1 Billion Ascot Partners, run by Jacob Ezra Merkin, GMAC’s chairmanFinancial FirmMost of the firm's $1. 8 billion in assets Access International AdvisorsFinancial firm$1. 4 billion Fortis Bank NetherlandsFinancial firm$1. billion Union Bancaire PriveeFinancial firmunder $1. 08 billion HSBC HoldingsFinancial firm$1 billion Picower FoundationCharity$958 million Carl ShapiroIndividual$545 million Carl & Ruth S hapiro Family FoundationCharity$145 million Yeshiva UniversityCharity$100 to $125 million Hadassah, the Women's Zionist Organization of AmericaCharity$90 million Korea Life InsuranceInsurer$50 million Fairfield, Conn. pension fundPension fund$42 million Madoff Family FoundationCharity$19 million Jewish Community Foundation of Los AngelesCharity$18 million Alicia KoplowitzIndividual$14 million Table 1: List of Madoff Clients (taken from the â€Å"The New York Times†, last updated June 24, 2009) As if the loss of fortunes were not tragic enough, there were also 2 suicides that stemmed from the scandal. Rene-Thierry Magon de la Villehuchet, 65, who lost more than $1 billion of his own and his investors’ money, took his own life on December 23, 2008 after realizing that he would not be able to recoup his investment. The Magon de la Villehuchet family was one of the most prominent families in France, building its fortune in the shipping industry during the 17th century. William Foxton, 65, was the second suicide victim of the scandal, but unlike the first victim, he had never heard of Madoff and lost his investment through one of Madoff’s feeder funds. 2009 Ponzi Schemes The now infamous Ponzi scheme may have been popularized by Bernie Madoff during the present year, but the SEC has been uncovering such schemes at a rapid pace since the Madoff scandal. The following is a list of all the Ponzi schemes charges the SEC has issued in 2009 so far: DATEDEFENDANTSPONZI AMOUNT (In millions) 1/08/09Joseph Forte, Joseph Forte LP$50 1/15/09James G. Osie, CRE Capital$25 /19/09Robert Allen Standford$8,000 2/19/09Marvin Cooper, BCI Inc$4. 4 3/11/09Anthony Vassalo, Kenneth Kenitzer$40 3/26/09Millenium Bank$68 4/01/09Edward T. Stein$55 4/06/09Weizhen Tang$50-75 4/08/09Shawn Merriman$17-20 4/09/09Robert P. Copeland$35 4/13/09Clelia Flores, MRI Inc$23 6/09/09Peter Son, Jin Chung$80 6/10/09Gregory Bell & Lancelot Mgmt$2,000 6/15/09David J. Hernandez$11 6/24/09M ichael C. Regan, Regan & Co$15. 9 6/24/09Moises Pacheco, AMM, BD&C$14. 7 6/28/09John Bravata, Richard Trabulsy$50 9/08/09Philip Barry, Leverage Group$40 9/28/09Frank Bluestein$250 10/16/09Homepals14. 3 Table 2: 2009 Ponzi Scheme SEC Charges According to the SEC website, 2008 SEC Ponzi charges totaled $470 million (excluding Madoff charged on December 11), compared to 2009’s approximate amount of $11 billion YTD. The earliest Ponzi scheme on SEC recent records dating back to 1997 is reported on July 4, 2001 for $67. 5 million. There is no mention of another such scheme until June 9, 2005 for $6 million, while the next such scheme is reported on July 24, 2007 for $41. 9 million. The SEC Failure Bernie Madoff was so above suspicion that he even got his name informally applied an SEC rule. The â€Å"Madoff exception† allowed market makers such as Mr. Madoff to sell stock short to facilitate a customer buy order, even if the stock in question was ticking downward. Under a rule that was in place until 2007, short sales on a downward-ticking stock were normally prohibited. In a short sale, investors borrow stock and sell it, hoping to repay with shares bought at a lower price. Madoff was frequently and unsuccessfully investigated by the SEC. His firm’s first contact with the SEC was in the early 90’s when he hired two accountants, Frank Avellino and Michael Bienes, for his first small investment advisory business. The accountants helped him recruit more than 3,000 clients. They were violating the law selling unregistered securities; however they were not accused of securities fraud. The SEC shut down the Avellino & Bienes operation and forced Madoff to return more than $400 million to investors. 13 In 2000, the SEC Boston office is contacted by Markopoulos where he outlines his first concerns about Madoff. Unable to persuade an investigation, Markopoulos is told to contact the SEC New York office. 13 However, no further investigation is conducted partly because the information presented to the SEC is not understood by its investigators due to its highly complex nature. Since then many other letters from concerned outsiders are being sent to the SEC about Madoff. No action is taken from the SEC until January 2006 when it launches an investigation prompted by the Markopolos memo. After an interview with Madoff in May 2006 in its case-closing recommendation, the SEC said it â€Å"found no evidence of fraud. †13 After the uncovering of the investment fraud, the SEC conducted an internal investigation entitled â€Å"Investigation of Failure of the SEC to Uncover Bernard Madoff’s Ponzi scheme. A 477-page report was released in September 2009 were the SEC Office of Inspector General (OIG) analyzes the SEC failure to uncover Madoff’s Ponzi scheme, how it missed all the red flags and identifies recurring opportunities to find the fraud and how unsuccessful their efforts were. In a recent PBS interview with Henry Pitt, former SEC commissioner from 2001-2003, Mr. Pitt indirectly pointed out some SEC flaws:31 †¢The SEC’s exami nation program was put in place in the mid 90’s is fatally imperfect. The total staff of the SEC is 3,500 people (not all of them do examinations) and there are 11,000 registered investment advisers subject to the SEC’s jurisdiction. There will never be enough money, enough people and enough sophistication to conduct examinations the way they needed to be conducted. †¢The law for broker-dealers was setup in 1934 and in 1940 for investment advisers. The relationship between the two entities is treated separately. In today’s marketplace, this viewpoint needs to change. This is one of the reasons why Madoff continued to be in business after the Avellino and Bienes scandal. The SEC was heavily focused on legal analysis, while not paying too much attention to economic and financial analysis. †¢There needs to be more hedge fund transparency, something the SEC has failed to convince the courts to do so up to now. Arthur Levitt Jr, former SEC chairman from 1993-2001, maintains a view that supports a more focused approach on risk-assessm ent within the SEC. Mr. Levitt has been drawing criticism lately regarding his personal and business relationships with Madoff. When asked about SEC resources, he raises a valid point: â€Å"Since 2002, the number of investment advisers — such as Madoff Securities — has increased by 50%. Yet enforcement resources have been flat or even reduced. The number of SEC enforcement division personnel was cut by 146, to 1,192 in 2007 from 1,338 in 2005. †37 SEC post- Madoff Since the Madoff scandal, the SEC has been taking significant steps to reduce the probability that such frauds will occur in the future. A summary of the post-Madoff Reforms are included on the following list: †¢Safeguarding Investors’ Assets †¢Revitalizing the Enforcement Division †¢Revamping the Handling of Complaint and Tips †¢Advocating for a Whistleblower Program †¢Conducting Risk-Based Examinations of Financial Firms Increasing Focus on Agency-Wide Risk Assessment †¢Improving Fraud Detection Techniques for Examiners †¢Recruiting Staff with Specialized Experience †¢Expanding and Targeting Training †¢Seeking more Resources †¢Integrating Broker-Dealer and Investment Adviser †¢Enhancing Licensing, Education and Oversight Regime for †Å"Back-Office† Personnel In summary, the changes focus where the SEC had previously failed: enhancing investigator financial education, providing incentives for whistleblower tips, allocating additional resources. Hedge Fund Transparency One of the SEC’s attempts towards hedge fund transparency came in 2003 where the entity unsuccessfully tried to enforce the registration of a majority of hedge fund managers by re-interpreting the definition of ‘client’ to an investment-adviser. This rule would have required hedge funds to register as investment advisers. This attempt was dismissed by the U. S. Court of Appeals for the District of Columbia on June 23, 2006. The hedge fund industry as a whole is against regulation in part because such regulations would reveal the trading strategies employed internally to the competition. This is a viable argument in favor of the hedge fund industry, however not viable enough to prevent further regulation, at least in the US markets. A possible suggestion could be to create a quasi-government committee made up of various former heads of finance-related industries that are given the power to review and approve hedge funds. The information they have on their hands is solely between them and certain high level members of the SEC, with secrecy comparable to that of the likes of the Department of Defense. In this way, hedge funds avoid public disclosure of their strategies, while the SEC accomplishes the regulation they have always been pursuing. There could be different levels of approval according to the market value of a hedge fund. While this suggestion may not be the most viable, it is serves an option for both the SEC and hedge fund managers. Conclusion Given its impact on the financial world, it would seem that this scandal could have been prevented much earlier. Why did FINRA (Financial Industry Regulatory Authority), SIFMA (Securities Industry and Financial Markets Association), SEC, and other regulatory bodies not act quicker? Below follows a list of possible concluding points for such long inaction. The world to which the securities laws apply — laws now 70 and 75 years old — is light years away from the world we have today. †34 Point 1: Bernie Madoff was a legend on Wall Street. He and his family were among the elite of the Street and, due to his long career and connections, he obtained a God-like status on the Street and as someon e who could do no wrong. As any religious individual, they do not question God’s actions, they just believe. Furthermore, individuals who commit fraud usually do not have Madoff’s impressive background, connections and reputation. Madoff used his status on the Street as an advantage to raise more money and fly under the radar for as long as he did. A scheme is the last thing one would expect from someone whose resume includes a time as former chairman of NASDAQ. In addition, Harry Markopolos admits that he did not contact FINRA due to his family’s connections with the regulatory authority. In particular, Andrew Madoff served as an incoming District 10 member of FINRA in 2003 while his brother Mark served on FINRA’s Mutual Fund Task Force in 2004. Also, Bernie Madoff’s brother Peter served on the board of directors of SIFMA. Point 2: Madoff was not using any illegal trading strategies. The split-strike option is a legitimate strategy that has been employed for years by a few experienced industry professionals, such as Harry Markopolos. It is a highly complex strategy that even Markopolos in his SEC paper admits that few really understand, hence many of Madoff’s experienced investors failed to quantitatively analyze, yet they rather based their assumptions on word of mouth. In the same token, the SEC did not pay attention to something that they could not completely understand and did not put as much emphasis as they should have. Point 3: Red flags were not raised initially due to the overall economy’s performance. When the market was performing well, a 12% return was within reasonable lines of S&P returns. Some flags came up when the market started producing negative returns, yet Madoff’s returns kept their usual steady, profitable path. If the market were still performing neutral to slightly above neutral levels, chances are that the scandal would still lie beneath fake returns. Point 4: The SEC did not act any sooner possibly due to the psychological structure of its own investigators. A typical SEC investigator is young, non-aggressive, and lacks enough resources to fully take on such a case single-handedly. The aggressive and talented individuals get absorbed by Wall Street due to obvious lucrative reasons. This is not to say that the SEC does not employ talented, aggressive individuals; all that is being conveyed here is that probably some of the investigators’ psychological and character structure coupled with the lack of resources was a key mixture of ingredients the organization was missing. Plus, in order to raise such a high stakes complaint an SEC investigator would have to go through the usual bureaucratic red tape inherent in government process. Point 5: The SEC is made up of lawyers, thus lack the experience and knowledge of financial markets. The institution is not a financial entity that relies on satisfying shareholder returns; it is a regulatory authority that interprets and applies the law. Lawyers are not fund managers, thus are not familiar with the complexities and headaches that come with such territory. Point 6: The SEC failure in the Madoff case is yet another example of a ‘failure’ of the invisible hand to regulate capitalism’s promotion of self-interests. While de-regulation of capital markets was very instrumental to transform the US economy into a global powerhouse, lack of de-regulation brought upon the Madoff scandal along with one of the worst recessions in US history. If the markets were more heavily regulated from the beginning, one can only speculate on how far the US economy could have reached. In his testimony to Congress, Allan Greenspan admitted that his ideology of free market capitalism has a major flaw: â€Å"I made a mistake in presuming that the self-interest of organizations, specifically banks, is such that they were best capable of protecting shareholders and equity in the firms. † In short, Greenspan’s flaw was a variable he never considered as part of his ideology of free market capitalism: human greed. Not surprisingly, Greenspan’s flaw has influenced many areas of free markets from credit-default swaps and mortgage lending tactics, to unregistered hedge fund management practices. Bernard Madoff has left his imprint on Wall Street's ‘disgraced' list and his case will be used as an example to further regulate hedge funds and transparency needed in the financial industry. His life story of rising to the top and falling from grace highlights the double-edged sword of capitalism's laissez faire attitude. It will be very interesting to see how effectively the regulatory authorities will tackle this issue, as Madoff's case moves from the public eye to university case study in the coming years. Bibliography

Alcohol Addiction and the Addiction Process

Despite the general tendency to assume that we can recognize addiction when we encounter it, the idea of addiction is not well defined.   No matter what the addiction, all addiction begins as a habit and progresses from there.   Even if there is a genetic component, the initial expression of the addiction is expressed as a habit. Some habitual addictions end up as chemical imbalances in the body, others as changes at one or more receptor sites and so on. The concept of addiction as it is often portrayed and used is unclear.   Finagarette (1988) and Davies (1992) proposed that the concept of addiction as it is generally viewed is a myth.   Other researchers have presented similar ideas. (Szasz, 1974; Peele, 1985)   Since the 1970s, some have suggested that the concept of addiction requires revision in that it combines social discourse, moral dilemmas, psychological states and pharmacology in an awkward manner. (Hammersley and Reid)   The typical view of addiction is generally viewed as a myth. (Szasz, 1974; Peele, 1985; Finagarette, 1988; Davies, 1992)   The general view of the concept of addiction may be of little value and require major revision. (Akers, 1991)   Today, terms such as â€Å"substance abuse† and â€Å"drug dependence† are subtly replacing the idea of addiction. (Edwards and Gross, 1976) Theoretically, there are at least two general classes of addiction:   1) physical dependence and 2) psychological dependence.   The Diagnostic and Statistical Manual of Mental Disorders (DSM-IV TR) defines substance dependence as a cluster of symptoms that indicate that the individual has a pattern of impaired control over substance use. The seven DSM-IV TR criteria for Dependence can be separated into physiological dependence and compulsive use.   Addiction is considered to be the uncontrolled, compulsive use of a substance.   Physical and psychological addictions are not always easy to distinguish, especially as there is certainly some degree of overlap between the two. Each type of addiction has its own cause.   This report will focus on alcohol addiction.   We will look at the addiction process from beginning to end.   We will ask, What causes addiction or Why does addiction begin, Why does addiction persist and finally, Why does it end?   Our approach will be to take a general look at addictions so we will know and understand what we are dealing with and then to focus on one type of addiction, alcohol addiction, for an in-depth consideration and review. We will begin by looking at the concept of addiction and defining what the means and we will proceed from there.   Overall, we will discuss the general aspects of alcohol addiction and then apply what has been discussed to a hypothetical case. In what follows, we will create a hypothetical case that will exemplify the addiction process from the initial stages to addiction to treatment.   If we are to follow the Alcoholics Anonymous (AA) model, the process cannot go beyond treatment because the AA model does not allow for a cure.   Addicts are always recovering and never recover, so we will follow the AA model and its treatment throughout the life of the addict.   We will create our hypothetical addict after defining what is generally meant by the term addiction. Addiction Defined Substance abuse is widely viewed as addiction, but Hammersley and Reid (2002) point out that addiction is a dramatic, dangerous and chronic condition caused by the biological effects of drugs.   Hammersley and Reid suggest that substance use is a normal behavior with social causes and should be viewed as such without perpetuating any unhelpful moral issues and the unsuccessful solutions suggested by the myth. Hammersley and Reid suggest that the myth of addiction continues and prevails because it is functional in western cultures and can be used to deal with issues of ‘control’.   According to the generally accepted myth, addictive drugs are supposed to meet six criteria.   They are 1) supposed to lead to addiction quickly and easily, 2) force addicts to resort to crime to finance their drug habit, 3) have psychoactive effects, 4) cause serious health damage or death, 5) supplied by ruthless criminals and 6) addiction is long lasting if not permanent.   For the most part, these ideas appear to be mainly fiction. These ideas are essentially a myth based on exaggeration and distortion regarding the effects of certain drugs.   Such myths are common.   They arise, in part, because evidence counter to these ideas is ignored and individual cases of â€Å"mythical figures and events† that support the myth are commonly projected before the public. As a result of these myths, the public is led to believe that drug users started out as naà ¯ve you people who were persuaded to use drugs, then become addicted and then turn to a life of depravity and crime because they are unable to control their habit and they need to finance their drug use.   (McAdams, 1993) Although a number of drugs have been used to perpetuate this myth, cannabis is perhaps the most common and widespread example of the myth.   In the late 1960s and 1970s, many believed that cannabis use would lead to serious psychological harm.   Research failed to confirm this belief. (Johnson, 1973)   Other drugs that have been involved in this myth include heroin, cocaine and ecstasy. Research to understanding drug abuse often focuses on changes at a specific receptor site.   The studies will investigate those changes and seek to determine how to control them with medications.   However, in contrast to many other commonly abused drugs, alcohol   does not bind to specific receptors (Kranzler and Ciraulo, 2005), but it appears to modify neuronal membranes and neurotransmitter receptors embedded in those membranes in a variety of neurotransmitter systems, including virtually all the major system found to be associated with psychiatric symptoms (Kranzler, 1995) If we were to apply this information to the hypothetical case of a male alcoholic since, even though both males and females become alcoholic, males are two or three times more likely than females to become alcoholic, we would arrive at the situation of a male in his mid to late twenties who began drinking socially and quickly became an alcoholic.   Subsequently, he turned to crime to support his drinking habit. His habit is now long lasting and permanent.   This would be the hypothetical example of an alcoholic that supports the myth of addictive drugs discussed by Hammersley and Reid.   Viewed from the perspective of an alcoholic, we can see that this model would not apply well to alcoholics. Although his habit may have begun socially, and other aspects of the generally accepted myth might sometimes hold true, becoming addicted was a gradual process, the drug was legally sold at liquor stores and perhaps even in grocery stores and may even have been provided in small amounts in the community church.   No ruthless criminals were involved and the alcoholic had no need to resort to crime to finance their drug habit.   Therefore, the myth, although consistent with some aspects of reality, is misleading and inaccurate. We can see that the characteristics of alcohol addiction are sufficiently consistent with the generally accepted myth as to allow individuals to assume that it supports the myth.   However, none of the components of the myth need to occur in order for an individual to become alcoholic. Perhaps the one characteristic that may always apply is that alcohol is psychoactive, but in small amounts, not even that characteristic need apply.   Alcohol addiction is a gradual process, it   is relatively inexpensive, it is psychoactive, it has beneficial effects as well as harmful ones, is legally sold in liquor stores and in supermarkets and may even be found in the neighborhood church during communion and finally, alcohol addicted individuals are not always doomed to a permanent or long lasting addiction. Yes, each of these things can occur although the idea of a drug pusher selling alcohol is far-fetched.   Our alcohol addict is merely an individual, in this case a male but it could have been either sexual gender, who began drinking for whatever reason and then, somehow went overboard.  Ã‚   We have already touched upon causes and treatment and will now move on to those considerations below.

Toxic Hazard and Risk of Lead for Consumers Essay

Toxic Hazard and Risk of Lead for Consumers - Essay Example Lead is a highly toxic substance which when ingested may lead to irreparable neurological damage in children (ATSDR, 1999), kidney diseases, cardiovascular problems and reproductive complications. In 2007 Lead was ranked as the second most toxic substance after Arsenic (ATSDR, 2007). The toxicology of Lead is a result of its chemical similarity with Calcium thus the human body confuses Lead for Calcium and incorporates it into the bone marrow, kidney and the brain. Inasmuch as Lead affects adults, its effects on children can be fatal. A minimum of 10g/ml blood Lead impairs mental and physical development in children. A maximum of 80g/ml blood Lead leads to convulsions, comma and death. Lead poisoning can be detected through a number of symptoms. In children, the symptoms include abdominal pain, anaemia, vomiting, weight loss, short concentration span, hyperactivity, petulance and a slow speech development. In adults, the symptoms may include abdominal pain, memory loss, pale skin, weight loss, vomiting, petulance and anaemia. Lead poisoning can come from a number of exposure routes. All students, faculty staff and all visitors in IUB are exposed to these routes. First, the exposure route involving Lead Based Paint (LBP) is a major source. The paints used IUB buildings may chip off due to wear and tear, moisture friction or deliberate removal during renovation. The chips contain lead and mix with the dust which can be inhaled. The chips in the soil may leech and end up in water bodies. This route is not an acute exposure route. It is only acute to children who are fond of mouthing non food objects and substances. The preventive action to avert this exposure is to use Non- Lead paints which are of the same quality and glaze just like LBP. Industrial/ occupational Lead exposure is another possible route in that workers in a factory or laboratory that handles Lead are exposed to lead. Examples of such workers in IUB are those in pottery (Use Lead glaze), automotive repair (inhale exhaust fumes with Lead), industrial machinery and equipment, (inhale exhaust fumes with Lead) and chemistry students/laboratory technicians (analyze LBP or even handle elemental lead). Students of ceramics who use Lead glaze may inhale the Lead fumes involved in the Lead glaze. Those individuals threatened by this kind of exposure need to be careful and keen to wear protective gear such as masks to prevent the inhalation of the Lead fumes. This exposure is an acute threat because of the form and amount of Lead inhaled. The amount inhaled can be specifically high because the Lead is in gaseous form. Dishware is another exposure route. The plates and cups made of melamine or glass with a lead glaze, used by the students and faculty at the cafeteria or any other eating place, are a real threat. This is so because acidic food (such as tomato sauce, coffee, juice etc) kept in these containers may exacerbate lead leeching which can lead to lead poisoning. Though this is not an acute threat based on the amount of lead that can possibly leech, it is important that any dishware with a lead glaze is avoided. Most

Financial Statement Essay Example | Topics and Well Written Essays - 250 words

Financial Statement - Essay Example They are found in the Asset part of the balance sheet. These equipment purchases are regarded as long-term and are documented for many years (Kieso, Weygandt & Warfield, 2014). The financing activities on the other hand refer to the cash flow that is affected by the decreases or increases to equity. It simply means the quantity of cash flow affected by securing a loan or by paying down debt from a lending institution or an owner. Such activities are in the Equity and liability section of the balance sheet. Here, decreases and increases can be a bit deceiving if viewed at a bad or good perspective. This is the most important activity of the cash flow as it keeps the business going and informs the executive on what should be done on avoided for the continuity of the business. Disclosures to financial statements are vital as lenders use a variety of them from a private initiative statement when they need to determine whether the entity ought to get a loan; distinctive financial statements basing on the new overall accepted Accounting Standards for Private Enterprises (ASPE) may possibly meet those requirements. However, as financial statements are prepared for private enterprises, they must be in a way that they maintain the confidence and trust of lenders, thus additional disclosures may be advantageous in getting financing (Benjamin & Stanga,

Strategic Management and Leadership Essay Example | Topics and Well Written Essays - 2750 words

Strategic Management and Leadership - Essay Example It generally involves an organization’s objectives, mission, and vision. Strategic management is a fragmentary process that controls and evaluates the business and industries in which the organization is involved (Koteen, 1997). Moreover, it assesses the strategy of the competitors in order to set the goals and objectives. On the other hand, strategic leadership offers vision and direction for the success and growth of an organization. In order to deal successfully with the change, each and every executive need the strategic tools and skills for both strategy implementation and strategy formulation. For the purpose of the study Sony Corporation has been selected. The study will explain and discuss the strategic reasons behind the success story of Sony Corporation. Sony Corporation is a Japanese multinational corporation headquartered in Tokyo, Japan. It is one of the leading manufacturer and supplier of electronic products for the professional and consumer market globally. Son y Corporation is a leading and successful business unit. It is the parent company of Sony Group (Chang, 2011). The organization is engaged in business practices through four operating segments, such as Electronics, Music, Motion Pictures and Financial Services. However, in order to achieve the objective of the study, key reasons behind the success of Sony Corporation have been highlighted. ... The organization has able to fulfill the narrow demand of modern people. The success of Sony Corporation can be measured through the introduction of a new innovative product and technology within the particular products (Trott, 2008). The product fame and achievements of Sony Corporation can be measured and estimated from the survey reports that are being extracted by the media houses. Sony Corporation has been ranked top 10 in the list of top 20 global brands. The relocation of electronic services has significantly raised the market of Sony Corporation by implementing its innovative strategies in business practices considering the global business area. People have also felt that the price range of Sony Corporation’s basic product is very much reasonable and the products are superior in quality. Several innovative electronic goods, such as Laptops, Mobiles, Walk-mans, TVs and many more are the successful products of Sony (Muhlbacher, Lehis and Dahringer, 2006). The quality of the products that are being manufactured by Sony Corporation is getting better and better in every year. More significantly, the innovative and creative product attributes of Sony is creating a huge brand awareness and large customer base in the global market place. Sony is one of the leading brands within this kind of product segment. As the price of the products is reasonable and the services are adequate enough, therefore, Sony Corporation gave the impression to retain its existing customers and acquire new upcoming potential customers with it. It helped the organization to maximize its business profit and stabilize the revenue of the organization. The corporation is implementing several new product and

Discuss what enables staff to progress in their careers and how Essay - 1

Discuss what enables staff to progress in their careers and how managers can help them in their development in a health and social care setting - Essay Example Professional development will mainly involve enrollment in professional development programs in a given profession. The professional development programs, apart from improving the quality of services offered by an organization, â€Å"Boost individuals’ career, through travel, research, workshops and seminars, and through partnering with experienced professionals† (Morgan, 2007). In addition, professional development programs enable individuals to improve expertise in their fields and add value to the institutions through contributions in the developments. These programs are designed with the intention of helping people improve their level of competency and professionalism and are not only applicable to people in business or management, but also to other professionals such as medical practitioners, teachers, engineers, and nurses among others (Morgan, 2007). The health and social care practitioners are found in various settings and fields, requiring continued professional development to enhance delivery of quality healthcare and services. According to a joint statement on CPD for health and social care practitioners, â€Å"continuing professional development (CPD) is fundamental to the development of all health and social care practitioners, and is the mechanism through which high quality patient and client care is identified, maintained and developed† (RCN, 2011). Professional development in health and social care settings is pivotal in enhancing continued improvement in the quality of the services offered and high standards of care maintained. According to a Review of Continuing Professional Development in General Practice 1998, the effort to improve quality and excellence in clinical care provision can be achieved through CPD by focusing on three distinct inter-related areas: â€Å"clinical governance enhanced, professional s elf-regulation

The Market and Marketing of Verizon Business Research Proposal

The Market and Marketing of Verizon Business - Research Proposal Example On the other hand, Verizon wireless had a net gain of $1.8 billion retail subscribers and customer growth from the first and second quarter. In order to have a better understanding of where Verizon is perceived in the market, there will be two areas which will be covered for this purpose of the research. The research will be focusing on the non-Verizon customer, for a greater depth in understanding the reasons why Verizon is not attracting them. This report will mainly focus on two areas which Verizon should improve: The main reason why Verizon's customer base has been decreasing and well as taking their Verizon because it needs to focus most of its attention to the wireless affiliate because that's what is giving Verizon a competitive advantage. Verizon will have to create something new for the phone company and to do so they might have to increase the expenses a little to be more technologically advanced. However, their net income would increase and they would get more customers. As the Mintel report depicts that Verizon and Sprint both show higher-than-average shares of those who earn above $100k, Verizon and Alltel (not shown) are the only Top Five brands to have an above-average share of white customers and below-average share of all minority subscribers. Therefore in the light of all these developments Verizon's market strategy should be to include: A focus   on reasons why it is not capturing the subscription base of other ethnic groups rather than mainly higher income and white respondentsThey should also focus of what will attract other race or ethnicity groups to become part of their customer base. A review of the advertising practices and strategies in this regard. The relevant price and discount strategies. Currently, Verizon has an average share of those customers who earn above $100 k per annum   The purpose of this study is to find out the critical reason why Verizon is losing its market share. This study has been conducted for the purpose of understanding the market strategies of other telecom providers and to investigate reasons for diminishing customer base and strategies to attract new customers. There also needs to be an inquiry into how the present customer base can be successfully retained, in a more profitable context. This section will mainly focus on the consumer trends of all ethnicities with an income of over 100k per annum.

Please write a 3 page paper on a chosen law from the uploaded Research

Please write a 3 page on a chosen law from the uploaded information and book - Research Paper Example This law brought about significant reforms in the US immigration process. In the next two days the bill was agreed in House and Senate respectively and gave the green signal for President signing. In 1985, the bill was referred to Judiciary committee twice and the subcommittee on immigration and refugee policy heard the bill. It was reported by the joint committee of conference on 14th October 1986. 245a.1 provision talks about the definition of the law. 245a.2 talks about the application of temporary residences. 245a.3 talks about the adjustment from the temporary resident to the permanent resident of the country (Dias, 2011). In 245a.4 adjustments to the lawful status of some foreign nationals and their voluntary departure have been discussed. 245a.5 has the provision of disqualification for the benefits of certain freshly legalized residents. According to the provision of 245a.6, the law can deny the treatment of permanent resident. All these provisions have ensured that employers must attest the immigration status of their foreign employees. According to the provisions of the law recruiting illegal immigrants intentionally is a criminal offence and the offence will be dealt with according to the provision of the law. Provisions of the law have legalized some illegal agricultural immigrants. The provisions also have legalized the illegal foreign nationals who came into the U S before 1st January 1982 and stayed in the country consistently by paying penalty and taxes and admitted all the previous offences. The provisions of the law gave focused towards US history and English knowledge. Congressional intent of the law was to control the immigration in USA. The US Congress had clear intent to legalize a huge number of illegal immigrants who had illegally come into the country. America has a long history of high dependency on foreign labors. This dependency had caused lots of immigration disputes. To take care

Tour Operations Essay Example for Free

Tour Operations Essay Aim and purpose The aim of this unit is to develop learners’ understanding of the dynamic and challenging world of tour operations and for them to appreciate the variety of tour operators’ products and services. Learners will gain knowledge of how tour operators plan, sell and administer a package holiday programme and will also develop practical skills to plan and cost a package holiday. Unit introduction Every year millions of people turn to tour operators to provide them with holidays to all corners of the world. In this unit learners will explore how tour operators link with different types of travel and tourism organisations to provide a wide range of holiday experiences. They will see that tour operators must respond to legislation and external influences, and also face many challenges in the constantly changing travel and tourism sector. Learners will investigate these challenges and the ways in which tour operators respond to them. Tour operators are at the forefront of the travel and tourism sector, constantly seeking out new destinations and holiday experiences to satisfy the ever-demanding and ever-changing needs of today’s holidaymakers. Different types of tour operators will be identified and learners will examine how they develop an extensive portfolio of products and services to meet differing customer needs. Whatever their size, tour operators must work through the same processes when planning, developing, selling and operating their holiday programmes. These different functions will be examined and time scales identified. Learners will find that tour operators compete in a commercially sensitive environment and they will identify how commercial considerations inform many of the business practices. Practical skills will be developed in the planning and costing of a tour operator’s package holiday, allowing learners to appreciate some of the commercial decisions to be made in this competitive industry. Learning outcomes On completion of this unit a learner should: Understand the tour operations environment Know the range of products and services offered by tour operators for different target markets Know how tour operators plan, sell, administer and operate a package holiday programme Be able to plan and cost a package holiday. Unit content 1 Understand the tour operations environment Links with other component industries: travel agents; transport providers; accommodation providers; providers of ancillary products and services eg insurance, car hire; horizontal and vertical integration Links with trade and regulatory bodies: The Travel Association (ABTA); Federation of Tour Operators (FTO); Association of Independent Tour Operators (AITO); UKInbound; Civil Aviation Authority (CAA) Legal framework: EU Package Travel Regulations; consumer protection eg Trades Description Act, Consumer Protection Act, Disability Discrimination Act; contract law; licensing eg Air Transport Operators Licence (ATOL) External influences: environmental eg hurricanes, floods; political eg terrorism, strikes. taxes; economic eg currency fluctuations, price of oil; social eg UK demographics, exploitation in host country; technological eg internet, computerised reservation systems Challenges: eg dynamic packaging, distribution channels, integration, budget airlines, maintaining market share, trend towards independent travel, responsible tourism 2 Know the range of products and services offered by tour operators for different target markets Tour operator categories: outbound; inbound; domestic; specialist; mass market Products and services: components of standard package; tailor made; range of destinations; accommodation choices; transport options; ancillary products and services Target market: eg families, couples, solo travellers, specific age groups, special interests, people with specific needs 3 Know how tour operators plan, sell, administer and operate a package holiday programme Planning: research; forecasting; product development; methods of contracting; costing the package; data input; timescales Sell: brochure production; pricing strategies; distribution eg travel agents, internet, direct sell; promotions eg advertising, sales promotions, sponsorship; reservations; commission; late sales Administer: confirmations; rooming lists; passenger manifests; errata; cancellations; amendments; travel itineraries; ticketing Operations: consolidations; load factors; over-bookings; transport operations; duty office; UK and overseas resort liaison; health and safety; emergency situations; crisis management; quality control; customer service (pre-, during and post-holiday); excursion sales Commercial considerations: maximising profitability; links to different planning, selling, administrative and operational functions 4 Be able to plan and cost a package holiday Plan: destination; transport; accommodation; excursions (included, optional); activities; additional services Cost a package holiday: using load factors; mark-up or profit margin; currency conversions; fixed costs; variable costs Assessment and grading criteria In order to pass this unit, the evidence that the learner presents for assessment needs to demonstrate that they can meet all the learning outcomes for the unit. The assessment criteria for a pass grade describe the level of achievement required to pass this unit. Assessment and grading criteria To achieve a pass grade the evidence must show that the learner is able to: To achieve a merit grade the evidence must show that, in addition to the pass criteria, the learner is able to: M1 discuss the impact of challenges facing tour operators To achieve a distinction grade the evidence must show that, in addition to the pass and merit criteria, the learner is able to: D1 evaluate the effectiveness of tour operators in responding to challenges facing the sector recommend, with justification, how a selected tour operator could expand its range of products and services for its current target market or adapt its range of products and services to appeal to a new market. P1 explain the tour operations environment and the challenges it faces P2 describe the products and M2 analyse how a selected services provided by different tour operator’s portfolio categories of tour operator of products and services for different target markets meets the needs of its target market(s) D2 P3 outline how tour operators plan, sell, administer and operate a package holiday programme, identifying commercial considerations plan and cost a package holiday for inclusion in a tour operator’s programme [CT 1, CT 2, CT 3, CT 4, CT 5, CT 6]. M3 explain ways of maximising profitability during the different stages of planning, selling, administering and operating a package holiday. P4 PLTS: This summary references where applicable, in the square brackets, the elements of the personal, learning and thinking skills applicable in the pass criteria. It identifies opportunities for learners to demonstrate effective application of the referenced elements of the skills. Key IE – independent enquirers CT – creative thinkers RL – reflective learners TW – team workers SM – self-managers EP – effective participators Essential guidance for tutors Delivery It is likely that learners will have already identified the role of tour operators when examining the structure of the UK travel and tourism sector in Unit 1: Investigating the Travel and Tourism Sector. A simple recap would be useful and this could be achieved by asking learners to produce their own definition of tour operators and a summary of their role within the sector, perhaps producing a diagram that highlights their position within the  structure. Holiday brochures will help learners to identify how tour operators link with other component industries when providing and selling holiday packages. Links with trade and regulatory bodies and the legal framework could be researched in small groups, culminating in short, informal presentations. Vertical and horizontal integration can be a difficult concept for some learners and they will benefit from being given simple definitions, followed by practical tasks using the internet and holiday brochures to research one of the large in tegrated organisations. Findings could be presented in the form of a diagram and could then be compared with one of the integration charts that are produced from time to time by the trade press. Tutors will need to explain how the travel and tourism sector is constantly changing (which is why textbook models of integration are likely to be out of date). Learners will need to read the trade press regularly in order to keep abreast of changes of ownership and takeovers. Tutors could initiate a debate or discussion on the impact of integration to determine whether integration is a good or bad force within the sector, and about the challenges integration creates. Research activities could be developed to examine external influences including environmental, political, economic, social and technological influences. Hurricanes, the credit crunch, unemployment and terrorist activities are just a few occurrences that can present significant challenges for tour operators. A noticeboard could be created in the classroom to display any topical events or issues. Learners need to appreciate that there are hundreds of different tour operators, falling broadly into the categories of outbound, inbound, domestic, mass market and specialist. Learners, in pairs or small groups, could research to identify tour operators within each of the categories, and the range of products and services they offer. The internet is an excellent source of information, as are holiday brochures; however, tutors should discourage indiscriminate collection of holiday brochures. Learners will find that most tour operators have products and services that target different market segments and this will be reflected in some of the accommodation, travel, destination and ancillary services choices provided. Learners need to understand that all tour operators, whether large or small, carry out the same functions when planning, selling, administering and operating the holiday package. Larger tour operators may  have separate departments to carry out a particular function whereas a very small tour operator might have just one person responsible for a range of functions. A practical task could involve learners organising a college trip and relating the activities they carry out to the functions of tour operating. A visit to a large- or mediumsized tour operator would be very beneficial so that learners can see how tour operators work and how the different functions are carried out. Additional tutor input on planning, selling, administration and operations will be required. Activities using case studies can reinforce understanding of aspects such as different methods of contracting, currency considerations and pricing strategies. It is essential that learners develop a sound understanding of all functional areas. Discussions are to be encouraged to help learners appreciate commercial considerations, the difficulties tour operators have in making a profit and to identify ways in which profit can be maximised within the planning, selling, administrative and operational functions. In preparation for assessment, learners will need to practise designing and planning a package. Working in groups to a specific brief, they could practise by planning a college trip. As part of the planning, they would need to consider transport options, type of accommodation and board basis, excursions and activities. Each group could present their proposals to the class and vote on the most interesting proposals. Tutors should explain the terms ‘load factor’, ‘mark up’, ‘profit margin’, ‘fixed costs’ and ‘variable costs’ and then work through simple costing exercises to show how these terms are used. When learners have understood the process for costing a package, exercises should be designed to put this into practice. Tutors may need to devise additional exercises before learners become confident in working with these calculations.

Comparison of Conventional and Islamic Bank Structures

Comparison of Conventional and Islamic Bank Structures Section 1: Conventional Bank ROA Ratio has been decrease from 2007 to 2009 because the bank has decrease on net profit. After that the ratio has been increase from 2009 to 2011. In ROA it means each $1 invested in assets get $0.0184 profit. ROE ratio has decrease from 2008 to 2010 by 2.73% because the bank has decrease on net profit. After that the bank’s return on equity increases from 2010 to 2011 by1.04%. ROE ratio means each $1 invested in equity can get profit $0.1621. PER Ratio has been decrease from 2007 to 2011 by 0.092. This is because the banks in Bahrain has decreased in profit and increasing on operating expense. Section 2: Islamic Bank ROA has been decrease from 2007 to 2008 by 0.2% and changing to (0.625%) because Ithmour has Net Loss in 2009 after that ROA increse from 2010 to 2011 by 0.19%. That is effect from financial crises. ROE has been decrease from 2007 to 2008 by 4.68% after that changing to (2.36%) in 2009 and (0.91%) in 2010 because ithmaar bank has Net Loss which coming from Financial Crisis. PER has been decrease from 2007 to 2011 by 0.82 because some of Islamic Bank has Net Loss and other has increse in operating expence. This study is aimed to investigate the impact of the changes in internal bank-specific variables and external macroeconomics variables towards Islamic banks’ financial performance in Bahrain during and after the global financial crisis. Comparatively, conventional bank and Islamic bank’s ratio is not equal. In order to investigate the impact of financial crisis towards the banking performance, it is very important to understand the determinants of banking financial performance. Literatures reveal that banking financial performance is influenced by internal and external determinants. ROA and ROE are very important indicators of banking financial performance (profitability) and normally used as the dependent variablesConventional bank’s return on assets, return on equity and profit expense ratios are higher than Islamic bank. Islamic bank given best financial perfomance from 2007 and 2008 than Conventional banking. Due to financial crisis, Islamic banks could not m ange accurately financial performance. From 2007 to 2011, Conventional bank provides best reults of ROA, ROE and PER for periodically. the performance of Islamic banks (IBs) and conventional banks (CBs) during the recent global crisis by looking at the impact of the crisis on profitability, credit and asset growth, and external ratings in a group of countries where the two types of banks have significant market share. Section 1: Conventional Bank (LDR) ratio has been decrease from 2007 to 2011 by 21.01%. It means all banks in Bahrain try to decrease loans and accepted deposits from customers. LDR ratio has been increase from 2007 to 2009 by 22.91% it means Islamic Bank increase Loans to customer after the LDR Ratio decreasing from 2010 to 2011 by 6.19% that is effects from financial crises because the Islamic bank decreased Loans to customer. (CPIDR) has been decrease from 2007 to 2009 by 11.67%. It means banks reduce the cash liquidity because the banks give loans to the customer. But CPIDR increases from 2009 to 2011. (LAR) has been increase from 2007 to 2008 by 15.34%. It means that banks try to gives the customer loans to get interest income. But the ratio has decreases from 2009 to 2011 by 5.39%. Section 2: Islamic Bank (LDR) ratio has been decrease from 2007 to 2011 by 21.01%. It means all banks in Bahrain try to decrease loans and accepted deposits from customers. CPIDR Ratio has been increasing from 2007 to 2009 by 9.52% it means the Islamic Bank keep Liquidity Cash to Cover Deposits Requirements after that decreased by 12.4%. LAR has been decreasing from 2007 to 2011 by 5.67% that means in 2007 the bank gave loans to customer by 40.46% from Assets but after financial crises decreased the Loans to customer. Conventional bank and Islamic bank provides better financial performance. Conventional bank results from 2007 to 2011, LDR results increased to decreased periodic year and almost similar financial position of CPIDR and LAR. In this analysis, financial performance of both banks are better and the same time some ratio results are differ from both banks. Managing liquidity is more challenging in IBs,given the limited capacity of many IBs to attract PSIAs since the return on these accounts is uncertain and the infrastructure and tools for liquidity risk management by IBs is still in its infancy in many jurisdictions. Similarly, the dependence on bank deposits is limited due to a less active market and the absence of an interbank rate, except under the limited reverse Murabahah. While IBs usually maintain higher liquidity buffers to address this risk, limited tools (e.g. sovereign sukuks) for making use of this liquidity prevent IBs from operating at a level playing field with CBs. In add ition, the liquidity support in the form of government deposits is easier to be directed to CBs given the easiness of auctioning government deposits to CBs. This could be due to large liquidity support that was extended to the banking system during the crisis, which limited the impact of this factor. The importance of liquidity risk, making the strengthening of liquidity management a key part of the global reform agenda. Section 1: Conventional Bank (DER) has been increase from 2007 to 2008 after that the ratio decreases from 2008 to 2010 by 1.75% after than increase by 0.82% from 2010 to 2011. (DTAR) has been increase from 2007 to 2011 by 0.01. It means the banks take deposit from customer equal 0.905 from Assets in 2011. (EM) Ratio has been increase 1% from 2007 to 2011. It means in 2011 each $1 invested in Assets financial from equity by $0.11. Section 2: Islamic Bank DER has been increasing from 2007 to 2011 by 1.88 because the Islamic Bank depends on deposits from customer and other banks. But that Ratio it is very risky to banks because liability equal 5 times of equality. DTAR has been decreasing from 2007 to 2011 by 0.04 but the Ratio it very high and risky because Liability equal over 50% of Assets. EM Ratio has incresing from 2007 to 2011 by 3.28 it means the Islamic Bank depond on Liability instead of equity that is very risky for the banks. Compare the performance of Islamic banks (IBs) and conventional banks (CBs) during the recent global crisis by looking at the impact of the crisis on profitability, credit and asset growth, and external ratings in a group of countries where the two types of banks have significant market share. The study suggests that IBs have been affected differently than CBs. Factors related to IBs ‘business model helped limit the adverse impact on profitability in 2008, while weaknesses in risk management practices in some IBs led to a larger decline in profitability in 2009 compared to CBs. IBs credit and asset growth performed better than did that of CBs in 2008–09, contributing to financial and economic stability. External rating agencies re-assessment of Islamic Banks risk was generally more favorable. SUMMARY AND CONCLUSION: This study is aimed to investigate the impact of the changes in internal bank-specific variables and external macroeconomics variables towards Islamic banks’ financial performance in Bahrain during and after the global financial crisis. This shows that Islamic banking industry is not totally crisis proof. Financial crisis does give an impact upon the Islamic banking performance, particularly in Bahrain, but the effect comes after the crisis period. As one of the fastest growing segments in global financial services, Islamic finance has become systematically important in many markets and too big to ignore in others. While conventional intermediation is largely debt-based and allows for risk transfer, Islamic intermediation, in contrast, is asset based and centers on risk sharing. In addition to providing IBs (Islamic Banks) with additional buffers, these features make their activities more closely related to the real economy and tend to reduce their contribution to excesses and bubbles. Our analysis is suggests that International Banks (IBs) fared differently than did Conventional Banks (CBs) during the global financial crisis. Factors related to IBs business model helpoed contain the adverse impact on profitability in 2008, while weakness in risk management practices in some IBs led to larger decline in profitability compared to CBs in 2009. In particular, adherence to Shariah principles precluded IBs from financing or investing in the kind of instruments that have adversely affected their conventional competitors and triggered the global financial crisis. The weak performance in some countries was associated with name concentration and in some cases, was facilitated by exemptions from concentration limits, highlighting the importance of a neutral regulatory framework for IBs and CBs and strengthening risk management in some banks. IBs credit and asset growth were at least twice higher than that of CBs during the crisis, suggesting a growing market share going forward and larger supervisory responsibility. External rating agencies re-assessment of IBs risk was generally more favorable or similar to that of CBs. Higher solvency has facilitated meeting the relatively more robust demand for Islamic banking finance and maintaining stable external ratings. Lending to the less affected consumer sector has helped support strong credit and asset growth. While the global crisis gave IBs an opportunity to prove their resilience, it also highlighted the need to address important challenges. The crisis has led to greater recognition of the importance of liquidity risks, and the need for efficient bank resolution framework. Hence, building a well-functioning liquidity management infrastructure is a key priority. Moreover, regulators and standard setters for IBs should ensure that the supervisory and legal infrastructure, including for bank resolution, remain relevant to the rapidly changing Islamic financial landscape and global developments. Reform efforts in this regard should interface with the global reform agenda. Greater convergence and harmonization of regulations and products is needed to facilitate an efficient and sustainable growth of the industry. Addressing the above challenges will require that Islamic Banks and supervisors work together to develop the needed human capital.