A quarterly newsletter on issues of financial crime in the securities, insurance and   pensions sectors.

Volume 1, Issue 2

  September 2006

I must first say thanks for the generous and gracious comments which were received in response to our first issue of the FSC Sentinel. All comments are welcomed as we strive to ensure the relevance of this publication, which is part of our continuing efforts to strengthen the compliance culture within the wider society. 

In that first issue, the roles of the government agencies in the fight against financial crime were articulated.  In this issue, we will provide general information on financial crimes including definitions and examples. A summary of the more significant offences and the penalties for those breaches has also been provided in this issue.  This information is important, as it allows both financial institutions and customers to make informed decisions in the conduct of their business in the insurance, securities, and pensions sectors. It is our hope that all stakeholders will become better equipped to readily identify schemes or activities designed to either relieve them of their hard earned funds or to, unsuspectingly, assist in legitimizing the tainted funds of the criminals.

The Faces of Financial Crime

No doubt many of us have heard or have made references to an act/activity as fraud or being fraudulent. The use of the term “fraud” is one which many are familiar with, but what really is fraud?

Fraud can succinctly be defined as an act or omission intended to gain dishonest advantage for the fraudster or for the purposes of other parties. This may, for example, be achieved by means of:

·          misappropriation of assets and/or insider trading; and/or

·          deliberate misrepresentation, suppression or non-disclosure of one or more material facts relevant to a financial decision or transaction; and/or

·          abuse of responsibility, a position of trust or a fiduciary relationship.

The plethora of fraudulent activities which include financial institution fraud, cheque and credit card fraud, insurance fraud, securities fraud, occupational fraud, public sector fraud, etc., coupled with the dynamic nature of the

The term financial crime is often associated with non-violent crimes which are characterized by deceit, concealment, or violation of trust. Some offences classified under the banner of financial crime include fraud or dishonesty, market abuse and money laundering. As is evident, financial crime has a myriad of faces.  The methods employed by perpetrators (whether individuals or organisations) are dynamic but the objective of their actions is guided by the unwavering desire of obtaining a personal or business advantage.

Preserving the integrity of the financial system against criminals cannot be overemphasized and in this regard we each have a responsibility to become proactive and put in place an effective prevention and detection machinery that will act as a deterrent to criminals and their criminal exploits.  It is within our powers to give meaning to the old adage that “crime doesn’t pay” by sending a clear resounding message to the perpetrators of crime that their funds and activities will not be welcomed, tolerated or go undetected.

Together the legislative and regulatory framework within the Jamaican landscape explicitly

identifies the various agencies and offices with responsibility for safeguarding the integrity of the financial system. Notwithstanding this fact however, the failure to engrain a culture of compliance and social responsibility in our deeds and dealings will thwart even the most sophisticated financial crime detection and prevention system. Let us therefore strengthen our partnership as sentinels of the financial system, and by extension the society, as we work towards eliminating or mitigating the risks posed by financial crime.

 

                                       Continued on page 3

Fiona Bloomfield-Briscoe, BSc., FCCA, CFE   -  Snr. Analyst, Financial Crimes Unit, FSC

Brian Wynter,
Executive Director, FSC