Contemporary Financial Crimes of Employee Embezzlement and Insider Trading
Keywords:
: Employee Embezzlement, Insider Trading, Enron and WorldCom, Contemporary FraudsAbstract
This paper analyses the frauds of employee embezzlement by Gary Foster (Citigroup) and insider trading by Raj Rajaratnam (Galleon Group) both in 2011. By comparing to the notorious cases of Enron and WorldCom, it is found that the contemporary frauds tend to be committed through a diversified scheme rather than accounting manipulation. Fraudsters tend to take advantage of their positions to override strict rules and regulations. Shareholders and related stakeholders including governments will suffer the financial losses and ineffective macro-economic control, which may even result in the encouragement of other frauds. Therefore, it is strongly recommended that management, educators and regulators should jointly work on the prevention of frauds. Management should be highly aware of importance of fraud prevention and detection, with the assistance of regulators to prosecute criminals. Educators, on the other hand, should normalize the decisions under the challenges of ethical dilemma
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