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This issue of Discussions opens with an article featuring Cataphora in profiling seven types of corporate fraudsters, a handy guide for sniffing out fraudsters before they strike. To understand the motivation behind these different types of fraud, read more about The Seven Deadly Types of Corporate Fraudsters, a Cataphora Industry Intelligence Report. We provide three additional articles that highlight the importance of anti-fraud measures and comprehensive compliance programs in the face of both a higher likelihood of fraud, and of increased regulatory oversight.
In the wake of numerous financially crippling, high-profile fraud cases, it's no surprise that financial regulations are on the rise. Consequently, compliance enforcement is taking precedence for the US Department of Justice, which intends to aggressively pursue and prevent financial fraud. The DOJ emphasizes transparent compliance and encourages corporations to cultivate a strong ethical corporate culture, adopt constant compliance monitoring, properly train employees, set procedural standards, and make risk assessments within business processes. The Securities and Exchange Commission (SEC) echoes the stance taken by the Department of Justice, underlining the strength of a company's compliance program as a critical factor in determining fines and penalties in the event of regulatory transgressions. Unfortunately, the recession has forced executives to cut costs, resulting in the weakening of compliance programs. The third article recommends conducting compliance and ethics risk assessments focused on pinpointing the organization's risk areas first and finding ways to address these risks in order to construct a cost-effective ethics and compliance program. Finally, we pass on some advice from Paul E. Zikmund, who has first-hand experience in law enforcement, corporate investigation and risk management consulting. He promotes instituting a proactive corporate anti-fraud program that involves assessing fraud risk, educating employees, detecting fraud, monitoring business processes, and structuring a response strategy. With a comprehensive anti-fraud program in place, a company can protect itself from fraud while also preparing to respond to allegations of fraud on its part. 
How To Foil A Corporate Fraudster
Swindlers abound - don't get suckered.By Melanie Lindner It's scary how many "smart people" get taken for a ride. On the egregious end, there's the carnage wrought by money manager Bernie Madoff, whose deep-pocketed clients should have known something was up but were too busy being seduced by unnaturally steady returns. On the subtle side, there are the thousands of homeowners--many of them card-carrying grown-ups with families and, presumably, household budgets--who took out mortgages that some back-of-a-napkin arithmetic would have shown they couldn't possibly afford. More at Forbes.com http://www.forbes.com/2009/06/10/small-business-fraud-entrepreneurs-management-fraud.html Financial crimes resulting in increased compliance enforcement
By Alexander B. Howard
Widespread expectation of increased financial services regulation is being coupled with the expectation of increased compliance enforcement. In a speech at the Compliance Week 2009 conference in Washington last week, Deputy Attorney General Dave Ogden said protecting national security continues to be the Department of Justice's No. 1 priority. But prosecuting financial crimes aggressively will receive "renewed emphasis in months ahead." Read the rest of this article at http://cataphora.com/out.php?go=l6gsd Ethics and Compliance Risk Assessment
By Jodie Fredericksen and Stephen Martin
As the United States continues to muddle through the current recession, corporate executives have been faced with the challenge of finding areas in which to cut operational costs. As previously reported by Corporate Compliance Insights, even in a booming economy, compliance and ethics budgets are often unfairly scrutinized, due to the misperception that there is no return on the investment of compliance dollars. The rest of this posting is at http://cataphora.com/out.php?go=rvy58 Corporate Fraud Prevention - Now Is The Time
Interview with Paul E. Zikmund
"Formalizing a fraud policy provides employees with a basic understanding of what behaviors and actions are not tolerated by the company. Fraud policies also go one step further by defining the roles and responsibilities of those who must respond to allegations of misconduct. Many companies have an inconsistent approach, and a formalized policy helps establish an effective response program. Well-written fraud policies also include steps relating to disciplinary action. So, having a policy and procedure in place, in my opinion, will help companies develop a more consistent approach." Read more of this interview at http://www.metrocorpcounsel.com/current.php?artType=view&artMonth=June&artYear=2009&EntryNo=9772 |
