Saturday, March 17, 2012

NC Treasurer Asleep at the Wheel

Regarding “NC Treasurer sues Bank of N.Y. Mellon” 3/16/2012
Is the North Carolina State Treasurer asleep at the Wheel?  I think so.
Having used it, I know that Bank of N.Y. Mellon has a wonderful analytical system called “Workbench.” Under the Workbench umbrella, is a powerful tool called “Investment Monitor.” Investment Monitor uses Boolean logic to screen portfolio holdings, trading activities, concentration limits, and general infractions of investment guidelines against a pre-programmed set of investment guidelines that should be set up by the State Treasurer’s office. 

"Investment Monitor" is a great tool for post-trade compliance.  If Bank of N.Y. Mellon truly violated their contract with the State Treasurer and the North Carolina Retirement System, the State Treasurer should have known of the “unauthorized” trade the next day and stopped settlement of the trade.  The State Treasurer could easily have avoided a $70 million loss that resulted from a trade completed over three years ago.

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