Fraud Risk Scheme:
A coordinated network of employees, intermediaries, or external partners exploits confidential information (mergers, acquisitions, internal financial data) to make profitable trades before public disclosure. Insiders pass this information to external accomplices who execute trades to conceal the origin of the privileged information.
Detection:
Coordinated activities among multiple actors during the same time period.
Unusual transactions preceding sensitive internal announcements or decisions.
Correlation between access to confidential data and suspicious financial movements.
Network analysis revealing links between insiders and external beneficiaries.
Prevention:
Mandatory employee training on prohibited behaviors: raising awareness of risks and sanctions for using privileged information for personal or third-party financial operations.
Strict limitation of access to sensitive information.
Monitoring and auditing of access to confidential documents and internal communications.
Share your feedback:
What tools, techniques, and processes are used in your organization to detect and prevent such fraud schemes?
