Looking back over the last 12 months, corporate scandals continue with the finance industry seemingly always managing to make the headlines. Wells Fargo fake accounts in the US, CBA anti money laundering issues in Australia are two examples. The flow on effects from these scandals are often similar:
- Executives and CEO's involved are ushered out the door - key person risks arise.
- Fines were or will be imposed by regulatory agencies, which seem larger and more punitive in recent years.
- Class action lawsuits are attempted on behalf of disgruntled shareholders resulting in additional legal fees and potential settlement costs.
- Strategic growth objectives are derailed, as the companies involved need to batten down the hatches to recover from the scandal.