Prosecutors say that Mr. Mulcahey helped John Rigas and his sons, Michael J. and Timothy J., draw almost $50 million in unauthorized advances from the company's cash-management system.
Along the way he created dozens of companies from a marketing firm and a golf course to a maker of specialty cars and an engineering outfit that became increasingly intertwined with Venture, often sharing its corporate address and cash-management system.
Pronto was an extension of other electronic banking services offered by Chemical that included a corporate cash-management system and its growing ATM network and was one of the largest early forays by a bank into home computer based banking.
The finance industry was an early internet adopter, but security was lacking: Citibank officials claimed that the hacking team, led by Russian computer programmer Vladimir Levin, had used valid accounts to access the bank's unencrypted cash-management system and steal passwords and account data.
Banks protect cash-management systems that corporate customers use to move millions of dollars with the best security methods available.
Warnaco, which filed for bankruptcy protection in June, says it has more money than planned because its cash-management systems have improved.
The state claimed the Rigas family used complicated cash-management systems to diffuse company funds to various family-owned entities, and stole some $100 million for themselves.
Regardless of your levels of income or net worth, your financial success or failure will be predicated primarily on the effectiveness of your cash-flow management system.
If I had decided to believe that story, then the post I wrote might have been about planning for inevitable downturns, and I could have expounded on how my cash management and backlog forecasting systems allowed me to ride out the dip without layoffs.
Eager to serve such customers, most big banks have established "prime-brokerage" arms that offer hedge funds a range of services, including securities lending, leveraged-trade executions, cash management and even computer systems if they need it.In a recent report Morgan Stanley reckoned that revenues from prime brokerage at big investment banks surged by 29% last year, to $5.2 billion.
