ARUCAN, PEARLNETTE GAY JUNE V.
MANAGEMENT ADVISORY SERVICES
MWF 1:30-3:30

ROBERT KIYOSAKI
Who is Robert Kiyosaki? A fourth-generation Japanese American, Kiyosaki was born and raised in Hilo, Hawaii. After graduating from Hilo High School, he attended the U.S. Merchant Marine Academy in New York, graduating with the class of 1969 as a deck officer.
He is an investor, businessman, self-help author, motivational speaker, financial literacy activist, and occasional financial commentator. Kiyosaki is perhaps best known for his Rich Dad Poor Dad series of motivational books.
As a devout global financial literacy advocate, Kiyosaki has been a staunch proponent ofentrepreneurship, business education, investing, and that comprehensive financial literacyconcepts should be taught in schools around the world.

Why did he filed for bankruptcy? Robert Kiyosaki filed for corporate bankruptcy through one of his companies, Rich Global LLC.
Rich Global LLC filed for Chapter 7 bankruptcy protection on Aug. 20 in a Wyoming bankruptcy court. Kiyosaki and his bankruptcy attorney did not immediately respond to requests for comment.
The company had been weighed down by a lawsuit filed by Learning Annex, one of Kiyosaki's earliest backers who had helped arrange his public speaking events earlier on.
Bill Zanker, the founder and president of Learning Annex, sued Kiyosaki after he allegedly failed to pay a percentage of profits from his speaking engagements. A district judge in New York awarded Learning Annex $23.7 million.
"I took Kiyosaki's brand and made it bigger," Zanker told the New York Post. "The deal was I would get a percentage, and he reneged. We had a signed letter of intent. The Learning Annex is the greatest promoter. We put his 'Rich Dad' brand on a stage. We truly prepared him for great fame and riches. But when it was time for him to pay up, he said 'no.' "
However, Kiyosaki isn't taking after his poor dad's title just yet. Though Rich Global LLC has filed for bankruptcy, he reportedly conducts business through a number of corporations, including Rich Dad Co.
Mike Sullivan, CEO of Kiyosaki's Rich Dad Co., told the Post, "The dealings we had with Learning Annex were with a company that hasn't been in business for a number of years . . . I am not surprised Learning Annex is upset and angry, the money doesn't exist in that company, and we can't bring money out of the group.
"Robert and [wife] Kim are not paying out of personal assets. We have a few million dollars in this company, but not 16 or 20. I can't do anything about a $20 million judgment . . . We got hit for what we think is a completely outlandish figure."
Rich Global LLC's liabilities are nearly $26 million with assets of $1.8 million, according to its bankruptcy filing. Its biggest creditor is the Learning Annex due to its $23.7 million legal claim.

Insights: It’s a corporate bankruptcy, not a personal bankruptcy. Robert Kiyosaki is offering us another lesson in how the rich are different,that is they file for bankruptcy not because of ill health or unemployment related issues, but instead as a strategic business move. This issue interesting. It is a question why a well-known financial guru will make such decision. It must be something that we don’t know or cannot foresee. The word “bankrupt” or “bankruptcy” have been stereotyped negatively. The moment these words go into out mind, most of us will relate to a bad news. However, in corporate world, it can be one of the smartest move. LCC means Limited Liability Company. The advantage of this is that the company and shareholders are having separate entity, unlike Sole Proprietor or Partnership. When a limited liability company goes bankrupt, the assets of the shareholders are not affected.
Robert Kiyosaki must be taking the most strategic move. Rich Global LLC has been filed bankruptcy. However, Rich Dad Co. is still generating millions. His investment in gold, silver and oil will not be affected too.
Filing bankruptcy is the best move to prevent losing of assets, but it’s somehow way too cruel for the opposing party. It’s all about the matter of integrity.

COLLAPSE OF BARINGS BANK

Who is Nick Leeson? He was born in Watford, where he attended Parmiter's School. After finishing school in 1985 he landed a job as a clerk with a private bank, Coutts. He then moved to Morgan Stanley in 1987 for two years, eventually ending up with Barings in 1989. In 1992 he was appointed general manager of a new operation in futures markets on the Singapore International Monetary Exchange. Leeson was sent to Singapore after he was denied a broker's license in the United Kingdom because of fraud on his application.
In October 1994, Leeson was arrested in Singapore for an incident involving mooning.
From 1992, Leeson made unauthorized speculative trades that at first made large profits for Barings. However, his luck soon went sour and he used one of Barings' error accounts (accounts used to correct mistakes made in trading) to hide his losses. Leeson claims that this account was first used to hide an error made by one of his colleagues.
However, Leeson used this account to cover further bad trades. He insists that he never used the account for his own gain, but in 1996 investigators had located approximately $35 million in various bank accounts tied to him.
Management at Barings Bank also allowed Leeson to remain Chief Trader while also being responsible for settling his trades, jobs usually done by two different people. This made it much simpler for him to hide his losses from his superiors. He was sent to prison. Since leaving prison in 1999 he became, and subsequently resigned as, the CEO of Irish football clubGalway United and is active on the keynote / after-dinner speaking circuit where he advises companies about risk and corporate responsibility.

Why did the Barings bank collapsed? Nick Leeson opened a secret trading account that was numbered “88888″ to facilitate his surreptitious trading. He lost money from the beginning. Increasing his bets only made him lose more money. By the end of 1992, the 88888 account was under water by about GBP 2MM. A year later, this had mushroomed to GBP 23MM. By the end of 1994, Leeson’s 88888 account had lost a total of GBP 208MM. Barings management remained unaware.
As a trader, Leeson had extremely bad luck. By mid February 1995, he had accumulated an enormous position—half the open interest in the Nikkei future and 85% of the open interest in the JGB [Japanese Government Bond] future. The market was aware of this and probably traded against him. Prior to 1995, however, he just made consistently bad bets.
Betting on the recovery of the Japanese stock market, Nick Leeson suffered monumental losses as the market continued its descent. In January 1995, a powerful earthquake shook Japan, dropping the Nikkei 1000 points while pulling Barings even further into the red. Leeson frantically purchased even more Nikkei futures contracts in hopes of winning back the money that he had already lost.
Surprisingly, Nick Leeson effectively managed to avert suspicion from senior management through his sly use of account number 88888 for hiding losses, while he posted profits in other trading accounts. In 1994, Leeson fabricated £28.55 million in false profits, securing his reputation as a star trader and gaining bonuses for Barings’ employees.
After the collapse of Barings, a worldwide outrage ensued, decrying the use of derivatives.
After a series of lies, cover ups and falsified documents, Leeson and his wife fled from Singapore to Kuala Lumpur, Malaysia. By then, Barings' senior management had discovered Nick Leeson's elaborate scheme. The total damage suffered by Barings was £827 million, or $1.4 billion. In February 1995, England's oldest, most established bank declared bankrupt. Leeson and his wife were arrested in Frankfurt, Germany on March 3rd, 1995. That same day, the Dutch bank, ING, purchased Barings for a mere £1 and assumed all of its liabilities.
Insights: