The Impact Of Corporate Governance Failure For Investment Firms –Harinvest Case

We based our research on the premise that, in efficient capital markets, investors are protected against fraudulent and abusive practices that, unfortunately, may occur in relation with investment firms. The bankruptcy of Harinvest investment firm, triggered in 2013, has shook investors' confidence in the integrity of the Romanian capital market mechanisms, generating profound negative effects that have spread to the entire community of intermediaries. A first lesson to be learned from this sad event was that prevention is far less costly than sanctioning, in the context of significant financial prejudices that investors in good faith eventually had to bear. From this perspective, it is necessary to consolidate on a proactive basis the governance structures within investment firms, including the prudential supervision mechanisms managed by the Romanian capital market institutions and authority. The paper aims to identify the main causes and circumstances that have initiated and favored the bankruptcy of Harinvest investment firm, to address possible signals that could have been taken into account in connection with the risk of insolvency and to assess the financial consequences for the Romanian capital market, in general and for investors in particular.