"Kroll Global Fraud Report
Kroll have recently published their latest Global Fraud Report. This is a very interesting summary of the causes and impact of a range of global frauds across industries.
"Ultimately fraud involves human beings, both as perpetrators and victims. Greed has again demonstrated that, even before the downturn, it was more than a match for good sense or ethics among many supposedly sophisticated investors – whether in the Madoff affair or the sub-prime follies which started the current economic slide. As this edition shows, understanding the effect of bad economic times on people’s emotions is essential to seeing where fraud is headed, and what might be done about it. Some individuals will be more careful to protect their assets. Others, however, will be more desperate: those with a criminal bent may look to maintain lifestyles through running scams; more honest ones might be more susceptible to get-rich-quick schemes or self-proclaimed Robin Hoods that promise to restore depleted finances. Still others, normally perfectly honest, may even engage in fraud and misrepresentation for what they consider noble motives – to preserve the jobs of thousands of colleagues.
As this edition notes, what role regulation can play in the face of people’s eternal willingness to believe the too-good-to-be-true is unclear. This does not mean we are helpless. Due diligence and compliance best practice, as well as applying the correct tools to fight back once fraudsters have struck, are all part of addressing this threat."
Couldn't agree more.
Hedge Fund Operational Due Diligence"