Securities And Investment Fraud Criminology Essay

Securities And enthronisation Fraud Criminology EssayIt has been a long time since monetary umbrage has been identified and the body of research in this type of issue has been growth rapidly. Today this research provide covers a wide range of effect ranging from pecuniary studies to social implication of the study as well as to research to prevention and best practices that may help to stop this tight growing issue. This chapter will provide an overview of the impact of fiscal umbrage, the steps utilise to address this problem and briefly assess the theories of about pecuniary aversion in the world.Definition and types of pecuniary abominationsThere is no broad concensus on the meaning of financial villainy entirely it shadower be tacit that it is any type of il effective activity that result in an sparingal loss. financial crimes, sometimes defined to as white collar crimes, ar unprovocative sorry acts comitted to gaine nefarious monetary. tally to the United Nation Office on Drug and Crime (UNODC) financial crime lot be viewed as any non-violent crime that results in a financial loss which includes calculator crime and dishonourable practices. Financial crimes is a critical issue and it has credibly devastating economic, security and social impact. It encourages drug dealers, terrorists, illegal arm dealer, misdirect public officials and others to operate and expand their criminal enterprises. check to Petter Gottschalk, (2010), financial crime throw out be categoried in corruption, fraud, theft and manipulation . There atomic number 18 different types of financial crime. These types are as fol bustedsMoney LaunderingAccording to Jeffrey Simser, (2006), specie laundering house be defined as a technique designed to make illicit acquisitive gains appear legitimate, normally by disguising the airplane propellers illegal provenance. In other words, culprits are trying to insure the monetary sources obtained from illegal transac tions so that it look like it was acquired from legal sources. Commonly, according to (Schneider, 2004 Cas transporta, 2004), money laundering has been described as a bike taking place in three different forms. Firstly, Placement, the stage at which illegal funds are introduced in the financial system in the main deposited in a bank throwaway.Layering, the stage of the process in which the property is moved around from bank to bank and its ownership and source is covered-up in order to keep it away from its illicit source and the final stage at which the property is re-introduced into the legitimate economy.EmbezzlementAccording to williams (2006), embezzlement can be defined as the dishonest appropriation to individualised aim or benefit of property or money entrusted by another. The factor first comes into possession of the property with the permission of the owner. Embezzlement can often occur between trusted friends or even relatives, but similarly occurs in simple bus inesses as well. Conscientious examination of financial records by the fund owner can help reveal signs of embezzlement, such as missing funds, duplicated checks, or accounting errors.Credit card fraudPickett and Pickett (2002) suggested that creed card fraud is the use of stolen credit card details to rise access to the goods or services in the name of the cardholder. Sometimes a brand new credit card is falsified using known details. card game can be stolen or details obtained from files that are not factorful safe.Securities and investment fraudSecurities fraud is a type of financial crime that is involved in illegal manipulation of values of financial market. It includes insider trading, discriminatory rates, and misrepre displaceation of value. The types of misrepresentation implicated in this crime include providing ill-judged instruction and giving bad advice. Insider trading occurs when a person reveals culture about an investment then uses the information to buy or sell shares with a business. Preferential rates and misrepresentation some(prenominal) implicate inflating or deflating the value of stocks in order to manipulate the market.Investment quality is the Property sold as a certified investment with high returns. The victim is influenced to buy investment property with a property management securely that will deal all the loan documents. The victim reassured and told that he or she has to do nothing other than be the buyer and borrower. thusly the victim finds that the property was sum up in value,no loan payments return perpetually been done, and any collected rents mystify been stolen as well.Identity theft and PhisingLaundon and Laudon (2010) defines individuation theft as a crime in which a pretender gets face-to-face information, such as social security identification numbers, drivers license numbers, or credit card, name, address, drivers license, date of birth, Social Security number, account information, account logi n credentials, or family identifiers to pretend to be someone else.According to Higgins et al., (2008), iIdentity theft is the illegal use of anothers personal identifying information.It implicate financial or other personal information stolen with the intention of to be someone else.Phishing is defined as the engineering science or social engineering used to attract victims to reveal their personal information such as account numbers, login IDs, passwords, and other confirmable information that can then be exploited for illicit purposes, including identity theft. Phishing is approximately often locateed through mass emails and spoofed websites.CounterfeitingCounterfeiting is a pernicious crime as it corrupts the monetary system. Counterfeiting implaicates the use of fake money, such as manufacturing falsely bills and coins with a more valuable version. Therefore, counterfeiting can break up the flow of swelling and deflation by adding more falsely money into a controlled system and also threaten global security, as these activities are sometimes reachted by terrorists and other dangerous criminals to finance their activities or disguise their net (Interpol, 2009). chain armour FraudInternet sales or online auction fraud The perpetrator agrees to buy an item available for sale on the Internet or in an online auction. The seller is told that he or she will be sent an official check (e.g., cashiers check) via overnight mail. When the check arrives, it is several hundred or thousand dollars more than the agreed-upon selling price. The seller is instructed to deposit the check and pay the overpayment. The official check is subsequently returned as a counterfeit but the refund has already been sent. The seller is left with a loss, potentially of both the merchandise and the refund.Bank FraudThis is criminal acts committed in fraternity with nonstarter or liquidationproceeding. A person filing for bankruptcy or a business that has gone into liquidationcan becloud assets after proceedings pee-pee been initiated, thereby preventing creditors fromcollecting their claims. However, most of the criminal acts are typically committedbefore bankruptcy/liquidation proceedings are initiated, e.g. the debtor has failed tokeep accounts or has unlawfully withdrawn money from the business (kokrim, 2008).Bribery and corruptionTHEORIES ON FINANCIAL CRIME WHAT argon THE FACTORS INFLUENCING FINANCIAL CRIME?A speculation is a forecasting or justification of a fact. According to Petter Gottschalk, (2010), the body of research of financial crime is divided into three branchesBehavioral theoriesAccording to Hansen (2009), distinction can be made between economic, business, and elite crimes. Participants employed in reputed financial institutions commit most of such crimes. Employees for their own benefits instead of for the business benefits, commit occupational or greatest crime. Hansen (2009) suggested that people commit crime because of low self-con trol. Duffield and Grabsky (2001) describe some of the key motivational and psychological factors that lead to financial crime. They stated that fraud can be excuseed by three factors1) An change magnitude in motivated criminals,2) The availability of suitable funds, and3) The absence of security.As Nettler find the intensity of desire and the perception of opportunity are personality variables. The labyrinthine sense between desire and opportunity moves. Temptation to steal fluctuates with individual personality and situation (Nettler 1974, p.75).Motivation is, therefore, a combination of an individuals personality and the opportunity which they get. Fraud is mainly committed by motivated and determined organized participants for the only savvy financial benefitsGreedFraud is executed by motivated groups of organize actors determined only for financial profit. According to the Drugs and Crime streak committal of Victoria,an increase in recent years of organised criminals in illicit and suspicious activity implicate mostly external attacks on banks, retirement benefit funds and business. Duffield Grabosky (2001) noted that greed lies at the heart of much dishonest activity in the society.Emerging Trends in ones lifestylePeople are convince to have recourse to financial crime due to the changes in financial condition that exceed their control. Unfortunately some are capitulated to commit illicit act to maintain a good quantity of living.Financial StrainFinancial strain caused by gambling problem is an area of concern (Duffield Grabosky 2001). The cost of suspicious drugs contributes also to financial latent hostility on individuals who take part in them therefore they are tempted to commit crime in order to get money. According to the Drug and Crime Prevention of Victoria, relationship or marital breakdowns causes, both financial and emotional stress which can represent a sudden decrease in the standard of living of an indvidual together with a feeling of powerlessness and resentment, ones can have recourse to financial crime in order to earn a good living.PowerDuffield and Grabosky (2001) noted the desire some people have for power over others and over situations. In other words, the feeling of power over individual appears to be a determined force to behave illicit act by taking advantage on indistinct people.MisunderstandingsPoor communication can arise some form of dishonesty. According to Neville (2000), complaints have been made each year in Victoria against sollicitors for defalcation of assets or income that concern unworthy communication between practitioners and their clients. Practitioners may be found guilty for not following the standard of conduct.Organizational theoriesA financial crime often takes place in form of an organized crime. According to Petter Gottschalk (2010), criminal presidency acts as a monopolistic firm, and the surmisal of monopoly is used to estimate organized crimes. In organized cr ime, Shvarts (2001) suggests that rational choice theory can explain the rise of the Russian mafia that is because of low income and financial difficulties allied with an exploiting police force, they had any choice to have recourse to crime to afford their standard of living. Rational choice theory states that people commit crimes after acknowledging the punishment for the crimes, as well as the rewards of completing these acts successfully. Examples of this theory include the bank teller who is experiencing personal financial difficulty and decides to loot funds from the bank in order to increase his standard of living (Lyman and Potter, 2007).Gross (1978) argued in his classical article on the theory of organizational crime that studies of crime, and delinquency have a vigorous theoretical base. He gave two important theoretical relationships. Firstly, the internal coordinate and setting of organizations is that in order for the goals to be acheived , the organization will be forced to violate the rules and regulation set in the business. Secondly, the perpetrators will have-to doe with with the upward mobility of the organization and likely willing and able to commit crime for the business to attain its goals and to prosper.Bruinsma and Bernasco (2004) used social network theory to explain the differences in social organization between criminal groups that is criminal organization have a network structure which is related to the legal and financial risks associated with the crimesManagerial theoriesAccording to Eisenhardt (1985), agency theory is involved with agreeing two problems that can occur in agency relationships. Firstly, the agency problem arises when the desires or goals of the chief and agent disaccord and it is fuzzy and costly for the principal to verify what the agent is doing. Secondly, is the problem of risk sharing that take place when the principal and agent have different risk preferences, goals and do not share profits which occur due to accessibility of new technology. Garoupa (2007) adapted agency theory to criminal organizations. He categorized the criminal firm as a family business with one principal and several agents. Alliance theory is implicated with partnership,often happens in criminal organizations, it reduce the risk of incompetent legal provision. confide is an important factor in partnerships. Criminal organizations are often establish on trust between its members.Governmental TheoriesAdverse government structures can also be a motivating factor to financial crime. An increased in economic activities together with a wanton system in a country including weak government capacity and weak democracy, poor remuneration of public servants, lack of transparency in government institutions and weak rule of law has increased the opportunities for people to have recourse to economic and financial crime .