Fraud Intelligence

Fraud statistics are an artistic endeavour, at best, but the National Fraud Authority’s measurement project – the Annual Fraud Indicator – aims to inject some scientific rigour: in January 2011, it came out with a headline..

A number of big fraud cases hit the media in 2011. Hannah Laming of Peters & Peters looks at some of the most significant and highlights the legal, compliance and risk management issues raised.

Last September’s UBS rogue trader scandal – which saw the bank lose a massive UK£1.3bn through alleged fraud and false accounting by trader Kweku Adoboli – once again raised the spectre of fraud in financial services. The Head of Operational Risk at a global investment bank provides pointers on detecting and preventing fraud on the trading floor.

Mabey & Johnson parent pays shareholder dividends in civil recovery The Serious Fraud Office (SFO) has welcomed the final act in the long-running Mabey & Johnson (M&J) Iraq bridge-building contracts case: the High Court accepting an SFO..

The last few years have shown that the Gulf economies are not insulated from global trends. Notably, the financial crisis and its fallout have exposed fraud in the region as never before, showing it to be remarkably similar to fraud elsewhere. With several key financial hubs in the region exhibiting limited signs of recovery, a number of markets – including Saudi Arabia, Kuwait, Qatar, and the United Arab Emirates – have seen a surge of activity. How should companies based in the region and those seeking to enter it mitigate their exposure to fraud? Yaser Dajani of Kroll has some ideas.

In spite of copious new rules and guidance, are we that much closer to curbing corruption, bribery and fraud than we were ten years ago and if not, why not? Nigel Iyer and Øyvind Kvalnes start by looking at moral dissonance and how ordinary and respectable people take the first step into muddy waters. They examine the challenges of adopting a new moral responsibility and how to encourage willing commitment to ethical behaviour rather than having to rely on compelled compliance.

Fraud can be committed by any person, either within or outside an organisation; however, internal fraud is increasingly prevalent in our experience, writes Colum Bancroft of Kroll. The classic Fraud Triangle depicts that (1) motive/ pressure, (2) opportunity and (3) rationalisation of the fraudulent act are the three elements that induce/enable someone to commit fraud. In practical terms, an organisation’s vulnerability to fraud often largely depends on the people on the inside, the business environment in which it operates, the overall corporate culture and the effectiveness of its internal controls.