How McKinsey Lost Its Way in South Africa

When the godfather of management consulting landed its biggest contract ever in Africa, it made the worst mistake in its storied nine-decade history.

The blackouts kept coming. The state-owned power company, Eskom, was on the verge of insolvency. Maintenance was being deferred. And a major boiler exploded, threatening the national grid.

McKinsey & Company, the godfather of management consulting, thought it could help, but was not sure that it should, according to people involved in the debate. The risk was huge. Could McKinsey fix the problems? Would it get paid? Would it be tainted by South Africa’s rampant political corruption? read more »

Bank of America Sued for Allowing $102 Million Ponzi Scheme

Lender faulted for missing red flags on shady account activity

Bank of America Corp. was accused in a lawsuit of providing more than 100 accounts used to perpetrate what the U.S. regulators called a $102 million Ponzi scheme.

The class-action suit filed on behalf of people who lost money follows a complaint last week by the Securities and Exchange Commission alleging that five men and three companies defrauded more than 600 investors.

One of the alleged ringleaders once commissioned a song about himself for a party in Las Vegas with lyrics celebrating his $10,000 suits and his partner’s affinity for champagne, according to Monday’s complaint in federal court in Ocala, Florida.

The brother and sister who sued to recover losses from their late father’s investment claim the fraudsters “could not have perpetuated their scheme without the knowing assistance of their primary banking institution, Bank of America, which lent the scheme an air of legitimacy and provided critical support, including at times when the scheme would have otherwise collapsed," according to the complaint. read more »

SEC accuses three of insider trading in Sherwin-Williams/Valspar deal

The U.S. Securities and Exchange Commission on Tuesday charged three people with insider trading ahead of Sherwin-Williams Co's March 2016 announcement that it had agreed to buy Valspar Corp.

Sebastian Pinto-Thomaz, an analyst at a major credit rating agency, was accused of tipping his friends Abell Oujaddou and Jeremy Millul after learning about the acquisition. The SEC said Oujaddou and Millul then made about $300,000 of illegal profit by trading Valspar securities. read more »

Abraaj, a private-equity firm, files for provisional liquidation

The firm dipped into investor funds for its own corporate purposes

Until recently the Abraaj Group, a private-equity firm based in Dubai, was riding high. It was one of just a few such firms focused on emerging markets, and a darling of “impact investors”, who seek social or environmental returns, not just financial ones. Assets under management of $13.6bn made it the largest private-equity firm in the Middle East, and the 42nd-largest globally in 2017. Its Pakistani founder and boss, Arif Naqvi, a regular at Davos and a patron of the arts, had won awards for philanthropy. It is all the more surprising, then, that basic corporate-governance missteps led his firm to file for provisional liquidation on June 14th. read more »