Nobody downloaded yet

A Review of the Article The Dangers of Relying on a Legal List: A Case Study of the West Virginia Consolidated Investment Fund - Book Report/Review Example

Comments (0) Cite this document
Summary
A Review of the Article “The Dangers of Relying on a Legal List: A Case Study of the West Virginia Consolidated Investment Fund” by Vernon Hayes The primary objective of the article “The Dangers of Relying on a Legal List: A Case Study of the West Virginia Consolidated Investment Fund” by Vernon Hayes is to use the example and cautionary tale of the West Virginia Consolidated Investment Fund and the financial and political scandal that it had undergone to demonstrate the pitfalls of relying on a “Legal List” of permissible investment instruments, rather than operating under the “Prudent Person Rule”…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER95.3% of users find it useful
A Review of the Article The Dangers of Relying on a Legal List: A Case Study of the West Virginia Consolidated Investment Fund
Read TextPreview

Extract of sample "A Review of the Article The Dangers of Relying on a Legal List: A Case Study of the West Virginia Consolidated Investment Fund"

Download file to see previous pages The story began in 1978, when local governments were encouraged to pool in their investment money with the West Virginia State in the Consolidated Investment Fund, managed by the West Virginia Investment Management Board. At first, the local governments were reaping massive returns. In 1984, James Manchin became State Treasurer. The guidelines imposed on the Consolidated Investment Fund were at first very strict: only investments with a maturity date of no longer than ninety days can be entered into by the Fund to protect against market fluctuations. However, because Manchin and his deputy, Margolin wanted to make more aggressive investment strategies, the maturity was extended to ten years. The investment strategy became bolder and the fund engaged in heavy-volume, short-term treasury securities trading (ibid at 52). There was also heavy reliance on futures contracts. This was a strategy that paid off in the beginning, but only a year later, because of an embargo imposed by then President Ronald Reagan on Japan (ibid, at 53) the bond market fell down sharply and continued on a steady decline for months. A series of stopgap measures only heightened the problem – entering the reverse repurchase agreement market only exacerbated the losses. Paying the local governments interests when the fund was no longer making profits but was operating on a loss cost the fund several millions of dollars. Manchin allegedly tried to conceal the losses at first but the hiring of an independent auditor revealed a $160 million imbalance in the account books. There was great public outcry surrounding the revelations of the auditors, exacerbated by Manchin’s apparent ignorance of basic accounting and financial procedures. Manchin was then impeached by the House of Delegates, with a finding that he knew about the hemorrhage since 1987 but did not do anything to stop it. He then resigned to avert any more political scandal and save the future political careers of his relatives. The central argument posed by Hayes in this article is that the “legal list” may have contributed to the losses incurred by the State of West Virginia. To quote the author himself, “By limiting the investment instruments available to Manchin's office, the state forced him to invest in riskier investments within the list, rather than allowing for investment in instruments that might have presented less of a risk to the state.” (ibid, at 58). His conclusion therefore is that the state of West Virginia might have been better served by an application of the “Prudent Person Rule” rather than by the “legal list” rule. Credit must indeed be given to the author for giving us an opportunity to revisit one of the examples of State investment strategies gone bad and the political fall-out arising from it. The author’s contribution lies in a thorough and compelling analysis of the chain of events that has led to the collapse of the Consolidated Investment Fund in West Virginia, and the ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“A Review of the Article The Dangers of Relying on a Legal List: A Case Book Report/”, n.d.)
A Review of the Article The Dangers of Relying on a Legal List: A Case Book Report/. Retrieved from https://studentshare.org/finance-accounting/1431707-hayes-vernon-r
(A Review of the Article The Dangers of Relying on a Legal List: A Case Book Report/)
A Review of the Article The Dangers of Relying on a Legal List: A Case Book Report/. https://studentshare.org/finance-accounting/1431707-hayes-vernon-r.
“A Review of the Article The Dangers of Relying on a Legal List: A Case Book Report/”, n.d. https://studentshare.org/finance-accounting/1431707-hayes-vernon-r.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF A Review of the Article The Dangers of Relying on a Legal List: A Case Study of the West Virginia Consolidated Investment Fund

International Monetary Fund Article

...To what extent the IMF reflect the interests of its members' The International Monetary Fund was founded in an effort to maintain and stabilize themonetary situations in the twenty nine original member countries. As it expanded over the years to include different countries and member state its shape, objectives, and direction changed with the times and in its bid to lend assistance to those in need. Whether its policies have been effective or the extent to which its flexibility is mirrored in the development of its members is dependent on the situations that have resulted from interaction between this monetary body and those that it serves. The IMF was created out of a need for countries to help their weakened economies....
12 Pages(3000 words)Article

Virginia Marketing

...Contents Contents Introduction 2 Analysis of Virginia Tourism Corporation 4 Advertising 6 Personal Selling 8 Sales Promotion 9 Public Relations 11 Conclusion 11 Works Cited 12 Introduction "The Marketing Communications Mix is the specific mix of advertising, personal selling, sales promotion, public relations a company uses to pursue its advertising and marketing objectives."(Dolak). Marketing communication Mix therefore is a combination of various strategic tools which give rise to the overall communication mix of the organization. This communication mix include advertising, personal selling, sales promotion as well as public relations. Through forming a balanced combination of all these items, organizations...
12 Pages(3000 words)Case Study

Virginia Tech Tragedy

...freedom and privacy. These values will sometimes limit the action that a state or educational institution can take against someone they suspect may be of danger to themselves or others. According to a report on CNN, "Virginia law disqualifies a person from buying firearms only if they have been involuntarily committed to a mental hospital" ("Legal Loophole"). Though Virginia typically reports all people with mental health problems to the Bureau of Alcohol, Tobacco, and Firearms (ATF), but Cho had fallen through the cracks. He was able to purchase the weapons from a firearms dealer in Virginia and they were later found to have had their serial number...
3 Pages(750 words)Case Study

Trust2 Home Fund

...to pool their resources and purchase large amounts of stocks at a lower cost. Also, many investors like having a group of experts manage the buying and selling of stocks in a fund rather than having to manage it themselves. Weaknesses Investors should know about expenses attached to investing in money market mutual fund market. Individual investors are charged management fees by investment firms and corporations that manage, trade and buy shares in mutual funds.. Some mutual funds charge secondary expenses such as registration fees, the cost of purchasing and selling mutual fund shares, and the cost of mailing...
20 Pages(5000 words)Case Study

An Investment in a Mutual Fund and its Goals

...Dleep Kumar February 14, 2007 An Investment in a Mutual Fund and its Goals Establishing realistic financial goals is an essential first step toward successful investing, and understanding the investments best suited for helping while achieving these goals is also equally significant. While investing, perhaps the most important step is to determine the reasons and the goals needed to be achieved at a later stage. Hence, realization of need recognition has a greater value and importance in determining the type and size of investment. An investment can be made in any flowing business while keeping an eye on the return on...
1 Pages(250 words)Article

South West Tourism Industry

...and wind patterns (IPCC 2007). The adverse impact of climatic change is not just restricted to our lifestyles and social well being but it also stands as a threat to economies relying solely upon tourism as an industry (Yohe et al 2007). Indeed the United Kingdoms Government Policy is increasingly taking into account the fact that in the decades ahead climatic change will become a focal issue for tourism development and management (Gossling, S. & Hall, and C.M. 2006). This is true to a large extent for the South West regions of Britain where the tourism industry has recently come to be considered as a highly climate sensitive economic sector similar to the food and transport industry. (Wilbanks et al...
4 Pages(1000 words)Case Study

South West Airlines

...Products 17 4-Bargaining Power of Suppliers 17 5-Bargaining Power of Buyers 18 Ansoff Matrix 18 1-Market Penetration 18 2-Market Development 18 3-Product Development 19 4-Diversification 19 HR Practices of Southwest Airlines 21 Company’s focus on its employees 21 Role of HR Practices in the proficient execution of the company’s business strategy 24 Staff and management of southwest airlines as prime source of competitive advantage 26 Southwest Airlines versus Virgin Blue Airline 28 Similarities and Differences between U.S. and Australian Aviation Industries 28 Business Model and Strategies of Virgin Blue Airlines 29 Conclusion 33 Introduction Southwest Airlines is one of the leading airlines of the United States. The company is...
30 Pages(7500 words)Case Study

Global Investment

..., through both corruption and fund embezzlement activities (Hymowit, 2000). Peter Killing, an American professor, confirm the above philosophy, as he proves to us that, Americans are the best business mangers around the world. He further illustrates that, the above is evident, from different surveys and education workshops held around the country. The topic arises as a result of the spirit of the American in adopting different environment with the aim to invest. The inclusions to consider when investing in a foreign nation are cultural differences, climate, language, and cost, among others. This is because they are determiners of the success or failures of the business ventures. The above...
2 Pages(500 words)Article

Water Pollution That Is Prevalent in the Water Bodies of West Virginia by Katie Fallon

...New West Virginia main concern of the in this blog post is water pollution that is prevalent in the water bodies of West Virginia. According to Katie Fallon, the industrial activities accompanied by the extensive mining of coal have disturbed the natural habitat of the region. She is of the opinion that the environment of West Virginia has become so polluted that there is a need to re-setup the whole place. For her it is just like establishing a whole new West Virginia that is clean and healthy. Inhabitants of the region must take vigilant initiatives in order to restore the environment. Katie Fallon...
1 Pages(250 words)Article

Consolidated Electric Case Study

...in the Consolidated Electric’s case, inventory formulas will help in the sale of product line items that ensure translations happen smoothly. Second, there is also the quantification of assets and label inventory using the QR Code as noted in the second diagram to keep the total count of stock (Jaber, 2009). Warehouse operations also deserve automations and controls that are efficient within the system to assist in the calculation of electrical equipment and goods for enhancing customer service. The use of a warehouse computer system in the quantification of return-on-investment goals become the idea of generating pre-tax profits because the company uses both receipts and debit cards to calculate is...
2 Pages(500 words)Case Study
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Book Report/Review on topic A Review of the Article The Dangers of Relying on a Legal List: A Case Study of the West Virginia Consolidated Investment Fund for FREE!

Contact Us