Beruflich Dokumente
Kultur Dokumente
Ponzi Schemes
A Brief History
Named after con artist, Charles Ponzi
Began in the 1920s with discounted postal reply coupons
Investors lost about $252 million (2018 in 2018 dollars)
Also known as "multi-level marketing schemes"
Ponzi Schemes offer extraordinary and near impossible returns
Embezzlement
A Brief History
Earliest documented cases date back to the 15th-Century
Illegal misappropriation of funds for personal uses
Differs from larceny in that assets comes into possession legally
Cases include skimming $1 off the register to large-scale transfers
Embezzlement may consist of property, vehicles, and resources
Money Laundering
A Brief History
Major surges during the 19330s Prohibition in the US
Transforming illegal profits from activities to legitimate assets
War on Drugs led to increased financial monitoring and drug laws
After 9/11, the Patriot Act put laundering money back in the spotlight
G7 Nations increased surveillance of global laundering activities
https://people.exeter.ac.uk/watupman/undergrad/ron/methods%20and%20stages.htm
Modern Money Laundering Schemes
Latin America, laundered money comes mainly from drugs and trafficking
Terrorism organizations use a reverse money laundering schemes
President Suharto, believed to have $73 billion pass through his accounts
Meyer Lansky, father of modern laundering was a former mob accountant
Al Capone, best known mobster known for using actual laundromats
Insider Trading
A Brief History
Strong v. Repide established new precedents for "insiders"
US Court of Appeals in NY ruled that information must be disclosed
Insider trading applies to anyone with private knowledge to trading
SCOTUS said gifts of information to family are illegal
Hundreds of Wall Street investors have been convicted
Galleon Group
https://archive.nytimes.com/www.nytimes.com/interactive/2011/03/08/business/galleon-graphic.html?src=tp
https://www.fbi.gov/stats-services/publications/mortgage-fraud-2010
Insurance Fraud
A Brief History
Causes safe consumer to pay more in the long-run
Act to defraud an insurance process
Hard fraud occurs when there is deliberate plan to commit a loss
Soft fraud occurs when policyholders exaggerate claims
Companies use statistical tools to look for abnormal/outlier claims
https://www.insurance-canada.ca/2013/03/24/fsco-protect-yourself-from-fraud-after-a-collision/
Corruption
A Brief History
Corruption dates back centuries to the beginning of mankind
Petty corruption deals with small scale public services
Grand corruption deal with high level officials participating in illicit deals
Systematic corruption happens with little transparency or impunity
Most prevalent in politics and business practices around the world
https://asiapacificreport.nz/2016/07/25/peter-solo-kinjap-corruption
Government Agencies
List of Common Financial Government Agencies
Securities and Exchange Commission (SEC)
Enforce and regulate federal security laws
Federal Deposit Insurance Corporation (FDIC)
Provide insurance on bank deposits up to $250,000 per depositor
Federal Trade Commission (FTC)
Works to prevent fraudulent and unfair business practices
Federal Financial Institutions Examination Council
Supervise Federal Reserve System, FDIC, National Credit Union, OTS
Federal National Mortgage Association (Fannie Mae)
Purchase mortgages from banks to promote lending activity
Federal Home Loan Mortgage Corporation (Freddie Mac)
Promote stability by purchasing mortgages from smaller banks
Federal Reserve System
Central bank of the US and controls credit/monetary policies
Office of Thrift Supervision (OTS)
Supervise federal and state savings banks and loan associations
Commodity Futures Trading Commission (CFTC)
Protect commodity and future markets from fraud and manipulation
Financial Industry Regulatory Authority (FINRA)
Private corporation that is a self-regulates brokerage/exchange markets
Consumer Financial Protection Bureau
Provide educational material for consumers
Financial Crimes Enforcement Network
Bureau of the US Treasury that analyzes domestic/international finances
Export-Import Bank of the United States
Official credit agency of the US in facilitating import/exports
Defense Finance and Accounting Service
Financial agency for the DoD and military entities
Offshore Financing
Facts
Shadow banks work outside of the normal banking regulations
Shell companies are corps. disguise business ownership
Financial Action Task Force issues blacklists of suspicious territories
Main reasons are for tax relief or money laundering
Some investors place money offshore during unstable economic times
https://www.icij.org/investigations/panama-papers/explore-panama-papers-key-figures/
Sarbanes-Oxley Act
A Brief History
Act enacted on July 30, 2002 to regulate public/private entities
11 Sections cover responsibilities and criminal penalties
Sen. Paul Sarbanes (D-MD) and Rep. Michael Oxley (R-OH-4)
SEC may implement regulations and requirements
Written after major scandals including Enron fall and WorldCom
https://www.a2q2.com/blog/sox/sox-404-overview-approach/
Sarbanes-Oxley Act
Enron, energy company that fell due to accounting irregularities
Tyco International, violated Securities Act with earnings inflation
Adelphia, founder's family stole $100 million in company assets
Peregrine Systems, executives charged with conspiracy to commit fraud
WorldCom, SEC found that $11 billion in assets had been inflated
Arthur Anderson, audit company convicted for obstruction of justice
Dodd-Frank Act
A Brief History
Act enacted on July 21, 2010 by President Obama
Sponsored by Barney Frank and Chris Dodd
Reshaped financial regulations and institutions
Established the Consumer Financial Protection Bureau
Improved financial stability and consumer protection (Brookings)
https://www.valuewalk.com/2016/05/dodd-frank-act-banks/
Dodd-Frank Act
US Government profited $68 billion from emergency bail out
Volcker Rule prohibits banks from trading hedge/equity funds
Lincoln Amendments must push out swaps to nonbank affiliates
Liquidity Coverage Ratio forces banks to hold a ratio of liquid assets
Net Stable Funding Ratio enforces institutions to limit runnable liabilities
https://www.laprogressive.com/reinstate-glass-steagall/
Glass-Steagall Act
Citibank and Salomon Smith Barney affiliation led to the act's decline
Critics of the act argued that GSA could not have prevented the '08 fall
Gramm-Leach-Bliley Act repealed two provisions with firms
Office of Comptroller of the Currency aggressively took on the act
President Clinton declared the act "no longer appropriate"