Thursday 24th April 2014
Clearstream has agreed to purchase Citco’s hedge fund custody processing unit in Cork for a sum in the ‘mid-double-digit-million euro range’ - The National Bank of Abu Dhabi (NBAD) has become the first licensed market-maker in the United Arab Emirates after winning approval from the Securities and Commodities Authority (SCA) - BlackRock has been awarded its first Renminbi Qualified Foreign Institutional Investor (RQFII) licence by the China Securities Regulatory Commission (CSRC) - An index joint venture between FTSE Group and Canada’s TMX Group has acquired the indices business of MTS, a European electronic fixed income trading business owned by the London Stock Exchange - The European leveraged finance market is set to undergo a shift this year, as private equity sponsors veer back towards loans to finance leveraged buyouts, says S&P Capital IQ - Turkish corporates are the most exposed among EMEA emerging markets to a scenario of slowing growth, rising interest rates and a persistently weak local currency, according to Fitch Ratings - London-based Global Markets Exchange Group (GMEX) is in talks to acquire an equity stake in ALTX Africa Group, a new exchange operator focusing on East Africa - Alternative asset managers with expertise in high-yield fixed income and distressed assets are upping their investments in the peer-to-peer loan market, according to a new report from Cerulli Associates.


Corporate Review

By Partners at BDO

Under Starter’s Orders

Wednesday, 20 June 2012 Written by 
Under Starter’s OrdersWith Euro 2012 underway and the London 2012 Olympics imminent, conversation has turned to sport.  Fans eagerly await their favourite sporting heroes, or beloved national teams.

With Euro 2012 underway and the London 2012 Olympics imminent, conversation has turned to sport.  Fans eagerly await their favourite sporting heroes, or beloved national teams.

National pride will be at its highest, legends will be born and new records will be set.  But juxtaposed with this excitement, there will no doubt be controversies and unexpected defeats.  Indeed, it is possible to draw common analogies between the world of sport and the world of fraud. Competition can be particularly fierce and the stakes are high. Some sports are fast paced and executed quickly, possibly by an individual sportsman or sportswoman; others are longer, more drawn out and involve larger teams of people - and the same can be seen when dealing with fraud.

Varying types of fraud will occur depending on the position, expertise and responsibility of the fraudster in question. Some are drawn out and complex, expertly implemented in order to avoid raising alarms, whereas some will be high impact, quickly executed frauds, for example treasury frauds. Some involve teams of people working together, often across jurisdictions, whereas others will be committed by a lone fraudster.

BDO’s fraud investigations team sees some of these analogies between sport and fraud in the corporate world.  One day, a successful company may be booming – their share price is high, their customers are happy and their staff are the best in the business. The next day that company discovers that a large fraud has been perpetrated against them and very quickly their reputation can be tarnished, their share price may plummet and their clients may run scared.

Fraud is a serious issue for UK businesses, with the value of reported fraud rocketing to more than £2bn in 2011.  According to BDO’s research, this represents an increase of more than 50% since 2010 and the highest ever figure. But for fraud investigators, it is not unusual. The fact that reported fraud is up is somewhat worrying, but not at all surprising.  When the economic climate is difficult there is even more focus on the bottom line and driving out unnecessary costs, so fraud is more likely to be uncovered. But organisations need to be much more proactive when it comes to preventing fraud. Too often risk teams are either too externally focused or fail to look at fraud from a financial point of view. You cannot mitigate against the risk unless it is on your radar and you plan for it. Whilst fraud risk cannot be ‘designed’ out of a business you can put trip wires in place.

So what can management do to safeguard their organisations?

1. Start at the recruitment stage and vet all new recruits appropriately

2. Train all staff in codes of practice and policies

3. Review your spending regularly

4. Look out for red flags

5. IT security: Keep your user permissions and access rights under review

6. Know your risks areas – i.e. where is the most expenditure?

7. Install trip wires – test your own defences and controls

8. Monitor your suppliers

9. Watch your relationships with your largest customers – remember the UK Bribery Act


Simon P Bevan is National Head of Fraud at BDO LLP

Simon Bevan

Simon is the national head of Fraud and Financial Crime at BDO LLP. He has been conducting financial investigations for over 24 years and is one of UK’s leading practitioners.
Simon is an acknowledged expert in fraud and financial investigations, he has conducted over 100 fraud investigations in 20 different countries and has led many investigations for high profile clients where complete confidentiality was required.
Over the course of his career Simon has been asked to trace assets totalling billions of dollars and has worked for European, Middle and Far Eastern governments.

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