Algo OpVantage FIRST Newsletter Examines Corporate Governance Issues at Refco

Toronto, Canada - November 10, 2005 -

In the November edition of the FIRST Newsletter, the Algo OpVantage FIRST database research team analyzes the relationship between operational risk and corporate governance issues, with special emphasis on related-party transactions and the recent implosion at Refco. A post-mortem of the Refco case provides an opportunity to examine the importance of good corporate governance and how the actions of senior management can lead to an extreme reputational crisis for a company.

"Our evolution into covering corporate governance issues from a focus on operational risk issues alone has been a natural outgrowth of our extensive research into large events," said Penny Cagan, Managing Director and Head of Research for Algo OpVantage. "Over time, we noticed a pattern where conflict of interest and problems at the business unit level were reflected in what was happening at the top level of companies that have suffered operational risk events. We have done quite a bit of research on the interdependency of operational risk and corporate governance and have tracked some interesting patterns. We hope to continue this work in the future."

About the FIRST Newsletter
The FIRST Newsletter is a monthly publication produced by the FIRST database research team. Available on a subscription basis, the FIRST Newsletter provides an examination of relevant business issues using actual cases examples drawn from the Algo OpVantage FIRST database. The events described are extracted from the text of the complete cases and are just a small sampling of the thousands of actual cases that reside in the Algo OpVantage FIRST database.

About the Algo OpVantage FIRST Database
The Algo OpVantage FIRST database, utilizing a unique real-life case study approach, is designed to assist institutions with their analysis of external operational risk events. The FIRST database is used as a qualitative tool, providing information on control breakdowns, event triggers, insight into why the losses occurred and lessons learned. FIRST contains case studies on approximately 5,500 operational risk loss events and is unrivalled in its depth of analysis and coverage of the industry.

About Algorithmics
Founded in 1989, Algorithmics is a recognized leader in enterprise risk management. Following its acquisition by the Fitch Group in January 2005, Algorithmics is the world's leading provider of enterprise risk management solutions and services that enable financial institutions to effectively understand and manage their financial risk. Algorithmics has over 200 clients, including more than 60 of the 100 largest financial institutions in the world. Algorithmics was recently recognized as the dominant enterprise risk solution provider in market, credit and operational risk in Risk Magazine's 2004 Technology Rankings. www.algorithmics.com

About Fitch Group
Fitch Group is the parent company of Fitch Ratings, a leading global rating agency committed to providing the world's credit markets with accurate, timely and prospective credit opinions. Fitch Ratings is dual-headquartered in New York and London, operating offices and joint ventures in more than 50 locations and covering entities in more than 80 countries. Fitch Group is a wholly owned subsidiary of Fimalac, S.A., an international business support services group listed and headquartered in Paris, France.

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