Billions of Dollars Lost Each Year to Fraudulent Activity Carried Out by Intricate Networks of Employees Operating Under the Company Radar
Cataphora Inc., an industry-leading provider of software for analysis of organizational behavior, today released a report entitled “Shadow Social Networks: What You Can’t See May Be Hurting You.” The report, a warning to c-suite executives, explores the informal yet strongly self-identifying internal networks or cliques that exist within every large organization. Though often harmless, these networks can sometimes be used as a means to perpetrate and obscure unethical or illegal activity. Since its inception in 2002, Cataphora has worked with corporations, investigators and legal teams to ferret out such renegade shadow networks, and its work has helped to expose the hidden actions that, in many cases, resulted in multi-million dollar corporate losses. The report identifies several recent corporate scandals in which shadow networks have played a role and explores the hazards they can represent for corporate America.
“If we’ve learned anything from the recent scandals on Wall Street, it’s that the c-suite can no longer afford to remain ignorant of, or turn a blind eye to, activities going on within their own walls,” said Cataphora’s CEO Elizabeth Charnock. “At Cataphora, we’ve witnessed firsthand the very real threat these networks pose to the organizations in which they operate. Employers put in place checks and balances that are intended to foil any single rogue employee acting on his own, but because these networks are composed of well-placed employees in a variety of functions or departments they are able, in the aggregate, to circumvent such measures to perpetrate highly sophisticated crimes.”
The basis for this report is data and analysis culled from Cataphora’s work on hundreds of high-profile cases. The company’s patented technology is used in cases of corporate crime to sift through millions of electronic records and documents in order to re-create the communication patterns within an organization. Once these patterns are identified, shadow social networks, which are characterized by significant amounts of trusted “within group” communication, are revealed as deviations from the norm. Included in the report are visuals from real-world cases which illustrate this concept.
Cataphora’s unique technology constructs complex models of organizational behavior, allowing any deviations from normal behavior to be more easily identified. It is the first information retrieval technology to recognize the concept of context that spans different records and even different record types. This allows the definition of a structure against which the 80 percent of corporate data that is unstructured may be better analyzed.
The “Shadow Social Networks” report is available as a free PDF download from Cataphora’s website at: www.cataphora.com/go/shadownetworks.
About Cataphora:
Cataphora Inc. is the creator of core technology that provides clear, accurate insight into individual and organizational behavior. Cataphora’s patented technology – based on advanced analysis of multiple sources of electronic data – can be used in situations such as litigation, investigation, workforce restructuring, post-merger integration, and enterprise governance, risk management and compliance. Founded in 2002, the company is headquartered in Redwood City, Calif., with offices in Washington, D.C.; and Frankfurt, Germany; a certified reseller in London, England; and a field office in France. For more information, please visit www.cataphora.com.
