Financial crime what does it mean to investec
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Financial Crime: What does it mean to Investec?. MLROs.com February 2007. Financial Crime:. What should we consider? What is financial crime? What crimes or types of behaviour are covered? What should we do? What are our responsibilities?. Financial Crime:. What is it? Definition?

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Financial Crime:

What should we consider?

  • What is financial crime?

  • What crimes or types of behaviour are covered?

  • What should we do?

  • What are our responsibilities?


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Financial Crime:

What is it?

  • Definition?

  • Common types of fraud

    • False Accounting

    • Money Laundering

    • Corruption

    • Asset misappropriation

    • Investment Schemes

    • Computer Fraud

    • Intellectual property fraud

    • Insurance fraud

  • What is covered?

    • Internal fraud and theft

    • External attacks

    • Money laundering

    • Insider Trading

    • Market abuse


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Financial Crime:

What are the risks?

  • Reputational risk

  • Financial risk

  • Regulatory risk

  • Legal risk


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False Accounting

How would this effect Investec.

  • To obtain for funding from the bank

  • To raise share price or value

  • To get performance related bonuses

  • To cover original theft

  • To hide losses


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Asset misappropriation

How would this effect Investec.

  • Identity theft/ account take over

  • False expense claim

  • Theft of company assets

  • Theft of intellectual property

  • Payroll fraud

  • Advanced fee fraud

  • Long firm fraud

  • Cheque fraud

  • Investment scheme fraud


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Computer fraud

How would this effect Investec.

  • Internet fraud

  • Spam and virus

  • Phishing

  • Denial access

  • Hacking


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Corruption

How would this effect Investec.

  • Political Exposed Person (PEPs)/ High net worth individuals

  • Employees

  • Clients


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Warning signs

What to watch out for. (People)

  • Management dominated by one person

  • High turn over of accounting/financial staff

  • Remuneration very heavily based on financial performance

  • Low morale

  • Employee life style

  • Excessive hours worked

  • Unprofessional or to closer relationship with customer/ supplier

  • Grievances


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Warning signs

How would this effect Investec. (Internal processes)

  • Lack of pre employment screening

  • Weaknesses identified but not corrected

  • Poor authorisation processes

  • Ability to override internal controls

  • Poor cultural attitude to fraud issues


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Warning Signs

How would this effect Investec. (External signs)

  • Structure that are overly complicated

  • Excessive use of jurisdictions

  • Overly complex transactions

  • Failure to identify ultimate beneficial owners

  • Lack of understand regards clients business

  • Clients profile changes for no apparent reason

  • Share prices that are either to high or to low for market conditions


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Controls

How can we protect Investec.

  • Pre employment screening

  • Appropriate sign off levels

  • Segregation of duties

  • Internal reporting systems and staff protection

  • Staff training and awareness

  • Annual fraud risk review

  • Fraud considered in new product or process design

  • Holiday policy

  • Senior management responsibility


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Financial Crime policy

What should be covered.

  • That the policy applies to all levels

  • Whether to company has a zero tolerance

  • Define what financial crime is

  • Conflicts of interest

  • Gift and entertainment

  • Internal reporting systems/ whistle blowing policy

  • What employees should deals with incidents of financial crime

  • Liaise with law enforcement

  • Contingency plan for dealing with incidents.


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Financial Crime Policy

What to do if a financial crime is discovered.

  • Preserve all relevant documents. (Carefully place them in plastic folders)

  • Preserve the scene where appropriate. (e.g. if employee suspected preserve desk contents, notebooks etc)

  • Preserve any other office equipment believed to be suspected or used to facilitate fraud (e.g. fax machines etc)

  • Ensure that the incident is reported to the appropriate senior member of staff

  • Inform their relevant business unit manager

  • If the method by which monies have been defrauded is identified, take immediate steps to safeguards further losses.

  • Immediately attempt to recover funds. Consider blocking accounts. If the funds have left the bank make immediate contact with the recipient bank and seek assistance.

  • Keep detailed notes of immediate action taken. In particular note telephone and fax numbers called with parties outside the bank.

  • Remember immediate actions taken at the time the fraud is discovered prove to be the most effective at securing evidence and recovering funds.



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Simon Wilkin

Fraud and Money Laundering Reporting Officer

Email: [email protected]

Tel: 0207 597 4645

Fax: 0207 597 4398


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