Power that corrupts

When it comes my investment decisions, the one big corporate no-no is corruption, or even the whiff of corruption.  I will never invest in a company with weak moral standards.  I once had shares in ICAP but I would never consider it again (at least not under current management).

For readers who are not aware, the largest single shareholder in ICAP ( a gentleman called Michael Spencer) managed to offload £45m of shares a month before ICAP announced a profit warning.  Apparently Michael Spencer had no idea that profits would be down!  C’mon Michael we are not idiots.  I have spent the last 20 years working in finance departments of large City businesses.  Forecasting is the key skill of these businesses.  You knew what was happening.

Lets hope the FSA throw the book at him.  Lets hope David Cameron throws the book at him (Michael also happens to be the Conservative Party Treasurer – a position that requires good numbers skills, no?).  The moral standing of both these organisations will go down if they turn a blind eye.  Lets wait and see if they have the cojones!

Anyway, those people that bought the shares from Mr Spencer (perhaps your pension fund) are down about a third of their investment.  We should all be angry about this even if we are not shareholders in the company.

I read today that this is not the first time that Michael Spencer or ICAP have been implicated in wrong doings.  They have got away with it in the past and probably will this time.  But there is no smoke without fire.  I for one will not be touching this company in the future or any others that Mr Spencer is involved in.

This episode has encouraged me to start reporting on corporate wrong doings.  I have seen a few in my times and continue to see powerful people abusing their power – through expenses, self-serving corporate policies, dis-respect etc….

I would also love to have any stories from readers.  Lets expose them and, at the same time, celebrate examples of good corporate behavior.  Please join in!