What are the different types of financial fraud?
Financial fraud is a deliberate fraud used for financial profit. There are many different types of financial fraud, including dedicated persons, embezzlement, falsification of financial records and ponzi. Understanding some different types of financial fraud can help alert individual to identify fraudulent schemes and report them to the right organs.
Insect trading is a type of financial fraud that includes securities trading using proprietary information. This occurs when a person who has not published a non -public information or entity uses this information to purchase or sell shares or other securities. For example, if a company executive finds that its company is in secret negotiations to be sold, it would commit financial fraud by selling its shares or warning others to sell shares before the sale of the company. Trading of initiated persons can artificially inflate or blow up stock prices and is consideredA Christmas for serious Crime in many regions.
The interference occurs when a person is entrusted with funds deliberately abusing for its profit. The key factor of this type of financial fraud is that the offender must be in the position of trust and control of funds. For example, the administrator for a minor child may decide to immerse himself in trusted funds for his own expenses, although money really belongs to the child. Banks and other financial institutions are frequent targets of internal embezzlement attempts; Many promote strict safety programs to ensure that no one has unlimited access to resources.
Many different types of financial fraud are made through falsification of financial records. The schemes of embezzlement can use this method to hide the tracks of embezzlement; For example, an embezzling banking manager could think of records for non -existent employees and transferplate for this PHANTOM workerto a fake account. Sometimes companies commit this form of fraud by looking as if they earn less than they actually have to avoid taxes.
Ponzi schemes are a delicate form of financial fraud, which is often very difficult to monitor. In these fraud, Schemer convinces people to invest in a project or business that promises high returns. Initial investors are paid revenues, but rather use financing from new investors than actual profits. The success of this type of financial fraud relies on the investment of initial investors on the basis of counterfeit revenues, plus the continuous fund of new investors, which comes with an oral word after the ray of high returns.