·          an official act or to gain a commercial or business advantage.

·          Illegal gratuity: a person giving or receiving a thing of value for or because of an official act.

·          Conflicts of interest: an agent taking an interest in a transaction that is actually or potentially adverse to the principal, without full or timely disclosure to and approval by the principal.

·          Theft of money or property: includes embezzlement and larceny. Embezzlement – the individual (who was given lawful possession of the money or property) takes or converts, without the knowledge or consent of the owner, the money or property. Larceny – a person taking or carrying away money or property of another without the consent of the owner.

·          Breach of fiduciary duty:        

various schemes employed by fraudsters is not only indicative of the far reaching/boundless nature of fraud but should prompt a heightened awareness by financial institutions in the development, implementation and monitoring of their operational policies, processes and controls.

Fraud typically comes in the forms of fraudulent financial reporting, asset misappropriation and corruption. Fraudulent financial reporting is the misrepresentation of financial information that is required for management and/or external reporting. Asset misappropriation is the embezzlement, larceny or misuse of company assets for either personal gain or that of another.  Corruption includes activities that involve illegal or unethical conduct or violate law, government regulations or company policies.

According to the Association of Certified Fraud Examiner some of the principal components that may be present during a fraudulent act or when there are instances of fraud, are: –

·          Misrepresentation of material fact: the perpetrator makes a material false statement having full knowledge of its falsity, with such an act resulting in the victim suffering

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Contributed by Collin A. A. Greenland,  MBA, MJIM, CFE, CFSA, CFC

share of the company or a debt          owed by a company.                                                                                                     The test for a “Security” is whether the scheme involves an investment of money in a common enterprise with profits to come solely from the efforts of others, so that whenever an investor relinquishes control over his funds and submits their control to another for the purpose and hopeful expectation of deriving profits there from, he is in fact investing his funds in a security. 

The Association of Certified Fraud Examiners concisely defines securities fraud as:

Employing any device, scheme, or artifice to defraud investors by misrepresentations and omissions of material facts, which any reasonable investor would rely upon when deciding whether to make an investment.

These facts include the track record of the proposed company, the management, competition, profits, and debts.     

Securities fraud also includes several scams described in the “Consumer Fraud” magazine as Ponzi schemes, and advance loan schemes. Although many associations and regulations do not use the term securities fraud, the various nomenclatures are usually categorised as a form of “improper conduct” mainly divided into “market manipulations” or “insider trading.”

According to the International Organisation of Securities Commissions (“IOSCO”):

Market manipulation and insider trading are activities which subvert the activities and principles of securities regula

Over the past several years, a series of very high-profile scandals involving large publicly-traded companies appeared to create doubts in the minds of investors throughout the world about the integrity of global capital markets. While, at first, the largest of these scandals seemed limited to the USA, more recent events – including the Parmalat S.P.A. in Italy followed by other scandals in various jurisdictions, and even allegations made here in Jamaica – demonstrated that this phenomenon was not peculiar to any one securities market and the concerns raised by these financial scandals are truly global in nature.

Black’s Law Dictionary offers one of the simplest, most concise, yet effective definition of securities as :

Stocks, bonds, notes, convertible debenture, warrants, or other documents that represent a

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·          damages due to the victim’s reliance on the false statement.

·          Non-disclosure of material fact: an individual has knowledge of a material fact and has a duty to disclose which he fails to do because his intent is to mislead or deceive the other party.

·          Bribery: an individual giving or receiving a thing of value, not limited to cash or money, in order to influence