Pub Date : 2023-07-04DOI: 10.1108/jfc-05-2023-0123
B. Scott
Purpose This paper aims to examine the history of data leaks and investigative journalism, the techniques and technology that enable them and their influence in Australia and abroad. It explores the ethical and professional considerations of investigative journalists, how they approach privacy and information-sharing and how this differs from intelligence practice in government and industry. The paper assesses the strengths and limitations of Collaborative Investigative Reporting based on Information Leaks (CIRIL) as a kind of public-facing intelligence practice. Design/methodology/approach This study draws on academic literature, source material from investigations by the International Consortium of Investigative Journalists and the Organised Crime and Corruption Reporting Project, and a survey of financial crime compliance professionals conducted in 2022. Findings The paper identifies three key causal factors that have enabled the rise of CIRIL even as traditional journalism has declined: the digital storage of information; increasing public interest in offshore finance and tax evasion; and “virtual newsrooms” enabled by internet communications. It concludes that the primary strength of CIRIL is its creation of complex global narratives to inform the public about corruption and tax evasion, while its key weakness is that the scale and breadth of the data released makes it difficult to focus on likely criminal activity. Results of a survey of industry and government professionals indicate that CIRIL is generally more effective as public information than as an investigative resource, owing to the volume, age and quality of information released. However, the trends enabling CIRIL are likely to continue, and this means that governments and financial institutions need to become more effective at using leaked information. Originality/value Over the past decade, large-scale, data-driven investigative journalism projects such as the Pandora Papers and the Russian Laundromat have had a significant public impact by exposing money laundering, financial crime and corruption. These projects share certain hallmarks: the use of human intelligence, often sourced from anonymous leaks; inventive fusion of this intelligence with data from open sources; and collaboration among a global collective of investigative journalists to build a narrative. These projects prioritise informing the public. They are also an important information source for government and private sector organisations working to investigate and disrupt financial crime.
{"title":"“Everyone freaks out when the leaks are made”: data leaks, investigative journalism and intelligence practice","authors":"B. Scott","doi":"10.1108/jfc-05-2023-0123","DOIUrl":"https://doi.org/10.1108/jfc-05-2023-0123","url":null,"abstract":"\u0000Purpose\u0000This paper aims to examine the history of data leaks and investigative journalism, the techniques and technology that enable them and their influence in Australia and abroad. It explores the ethical and professional considerations of investigative journalists, how they approach privacy and information-sharing and how this differs from intelligence practice in government and industry. The paper assesses the strengths and limitations of Collaborative Investigative Reporting based on Information Leaks (CIRIL) as a kind of public-facing intelligence practice.\u0000\u0000\u0000Design/methodology/approach\u0000This study draws on academic literature, source material from investigations by the International Consortium of Investigative Journalists and the Organised Crime and Corruption Reporting Project, and a survey of financial crime compliance professionals conducted in 2022.\u0000\u0000\u0000Findings\u0000The paper identifies three key causal factors that have enabled the rise of CIRIL even as traditional journalism has declined: the digital storage of information; increasing public interest in offshore finance and tax evasion; and “virtual newsrooms” enabled by internet communications. It concludes that the primary strength of CIRIL is its creation of complex global narratives to inform the public about corruption and tax evasion, while its key weakness is that the scale and breadth of the data released makes it difficult to focus on likely criminal activity. Results of a survey of industry and government professionals indicate that CIRIL is generally more effective as public information than as an investigative resource, owing to the volume, age and quality of information released. However, the trends enabling CIRIL are likely to continue, and this means that governments and financial institutions need to become more effective at using leaked information.\u0000\u0000\u0000Originality/value\u0000Over the past decade, large-scale, data-driven investigative journalism projects such as the Pandora Papers and the Russian Laundromat have had a significant public impact by exposing money laundering, financial crime and corruption. These projects share certain hallmarks: the use of human intelligence, often sourced from anonymous leaks; inventive fusion of this intelligence with data from open sources; and collaboration among a global collective of investigative journalists to build a narrative. These projects prioritise informing the public. They are also an important information source for government and private sector organisations working to investigate and disrupt financial crime.\u0000","PeriodicalId":38940,"journal":{"name":"Journal of Financial Crime","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-07-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42141420","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-07-03DOI: 10.1108/jfc-04-2023-0089
Howard Chitimira
Purpose It is important to note that insider trading is currently outlawed under the Securities Act 17 of 2004 (Chapter 24: 25) as amended (Securities Act) in Zimbabwe. This Act enumerates some practices that may give rise to insider trading liability in the Zimbabwean financial markets. Nonetheless, numerous challenges, such as the lack of adequate financial resources, the lack of sufficient persons with the relevant skills and expertise on the part of the enforcement authorities, lack of political will, inadequacy of insider trading provisions, poor cooperation and collaboration between the relevant authorities and the ongoing coronavirus (Covid-19) pandemic have negatively impeded the effective regulation and combating of insider trading in Zimbabwe. To this end, the author explores the stated challenges and recommend measures that could be used by regulatory bodies and other relevant enforcement authorities to enhance the regulation and combating of insider trading in the Zimbabwean financial markets. This study aims to enhance the detection and combating of insider trading in Zimbabwe. Design/methodology/approach A qualitative research methodology is used through the analysis of relevant legislation and case law. Findings It is hoped that the findings and recommendations made in this study will be considered by the Zimbabwean policymakers. Research limitations/implications The study does not use empirical research methodology. Practical implications The findings and recommendations made in this study could enhance the combating of insider trading activities in Zimbabwe. Social implications The study seeks to curb insider trading in the Zimbabwean financial markets and financial institutions in the wake of the covid-19 pandemic-related regulatory and enforcement challenges. Originality/value The study provides original research on the regulation and combating of insider trading activities in Zimbabwe.
{"title":"Overview analysis of the regulation of insider trading in Zimbabwe during the corona virus pandemic","authors":"Howard Chitimira","doi":"10.1108/jfc-04-2023-0089","DOIUrl":"https://doi.org/10.1108/jfc-04-2023-0089","url":null,"abstract":"\u0000Purpose\u0000It is important to note that insider trading is currently outlawed under the Securities Act 17 of 2004 (Chapter 24: 25) as amended (Securities Act) in Zimbabwe. This Act enumerates some practices that may give rise to insider trading liability in the Zimbabwean financial markets. Nonetheless, numerous challenges, such as the lack of adequate financial resources, the lack of sufficient persons with the relevant skills and expertise on the part of the enforcement authorities, lack of political will, inadequacy of insider trading provisions, poor cooperation and collaboration between the relevant authorities and the ongoing coronavirus (Covid-19) pandemic have negatively impeded the effective regulation and combating of insider trading in Zimbabwe. To this end, the author explores the stated challenges and recommend measures that could be used by regulatory bodies and other relevant enforcement authorities to enhance the regulation and combating of insider trading in the Zimbabwean financial markets. This study aims to enhance the detection and combating of insider trading in Zimbabwe.\u0000\u0000\u0000Design/methodology/approach\u0000A qualitative research methodology is used through the analysis of relevant legislation and case law.\u0000\u0000\u0000Findings\u0000It is hoped that the findings and recommendations made in this study will be considered by the Zimbabwean policymakers.\u0000\u0000\u0000Research limitations/implications\u0000The study does not use empirical research methodology.\u0000\u0000\u0000Practical implications\u0000The findings and recommendations made in this study could enhance the combating of insider trading activities in Zimbabwe.\u0000\u0000\u0000Social implications\u0000The study seeks to curb insider trading in the Zimbabwean financial markets and financial institutions in the wake of the covid-19 pandemic-related regulatory and enforcement challenges.\u0000\u0000\u0000Originality/value\u0000The study provides original research on the regulation and combating of insider trading activities in Zimbabwe.\u0000","PeriodicalId":38940,"journal":{"name":"Journal of Financial Crime","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-07-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45376102","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-06-29DOI: 10.1108/jfc-03-2023-0044
M. Feridun
Purpose Financial crime presents a serious threat to the stability and integrity of the global financial system. To combat illicit financial activities, regulatory bodies worldwide have implemented various measures, including the requirement for financial institutions to assess the financial crime risks they are exposed to in the jurisdictions they operate in. These risks include inadequate anti-money laundering and countering the financing of terrorism frameworks and other financial crime risks that have significant strategic implications for firms’ geographical footprints and customer risk classifications. This paper aims to make a contribution to the literature by undertaking a cross-country analysis of 158 countries to shed light on what drives perceived jurisdiction risk of the UK financial services firms. Design/methodology/approach Capturing firms’ perceptions of financial crime risk requires significant data collection efforts, including surveys and interviews with key personnel. This can be highly resource-intensive and may require access to sensitive information that firms may be reluctant to share. Furthermore, the dynamic nature of financial crime risks means that perceptions can change rapidly in response to changes in the regulatory and geopolitical landscape. As a result, capturing and monitoring firms’ perceptions of financial crime risks requires ongoing monitoring and analysis. Capturing firms’ perceptions of financial crime risks at a cross-jurisdictional level is a particularly complex and challenging task that requires careful consideration of a range of factors. As a result of data limitations, empirical investigation of the factors underlying the firms’ perceptions of jurisdiction risk is in its infancy. This paper uses regulatory financial crime data from the UK in a multivariate regression analysis, following a general-to-specific approach where any redundant variables were removed from the general model sequentially. Findings Results suggest that perceived jurisdiction risk is significantly and positively associated with evasion of tax and regulations, while it is significantly and negatively associated with political stability and regulatory stringency. These have important implications for home and host supervisors with respect to the factors that drive perceived jurisdiction risks and the evaluation of the nature of inherent financial crime risks within regulated firms. The findings confirm the critical role of the shadow economy, political stability and regulatory rigor in shaping jurisdiction risk perceptions. From a policy standpoint, the findings support the case for taking prompt policy action to identify, prioritize and implement specific and targeted measures with respect to the shadow economy, political stability and rigor of regulations to improve international firms’ perceptions of jurisdiction risk. Originality/value While there exists different measures of financial crime risk, it is notoriously cha
{"title":"Cross-jurisdictional financial crime risks: what can we learn from the UK regulatory data?","authors":"M. Feridun","doi":"10.1108/jfc-03-2023-0044","DOIUrl":"https://doi.org/10.1108/jfc-03-2023-0044","url":null,"abstract":"\u0000Purpose\u0000Financial crime presents a serious threat to the stability and integrity of the global financial system. To combat illicit financial activities, regulatory bodies worldwide have implemented various measures, including the requirement for financial institutions to assess the financial crime risks they are exposed to in the jurisdictions they operate in. These risks include inadequate anti-money laundering and countering the financing of terrorism frameworks and other financial crime risks that have significant strategic implications for firms’ geographical footprints and customer risk classifications. This paper aims to make a contribution to the literature by undertaking a cross-country analysis of 158 countries to shed light on what drives perceived jurisdiction risk of the UK financial services firms.\u0000\u0000\u0000Design/methodology/approach\u0000Capturing firms’ perceptions of financial crime risk requires significant data collection efforts, including surveys and interviews with key personnel. This can be highly resource-intensive and may require access to sensitive information that firms may be reluctant to share. Furthermore, the dynamic nature of financial crime risks means that perceptions can change rapidly in response to changes in the regulatory and geopolitical landscape. As a result, capturing and monitoring firms’ perceptions of financial crime risks requires ongoing monitoring and analysis. Capturing firms’ perceptions of financial crime risks at a cross-jurisdictional level is a particularly complex and challenging task that requires careful consideration of a range of factors. As a result of data limitations, empirical investigation of the factors underlying the firms’ perceptions of jurisdiction risk is in its infancy. This paper uses regulatory financial crime data from the UK in a multivariate regression analysis, following a general-to-specific approach where any redundant variables were removed from the general model sequentially.\u0000\u0000\u0000Findings\u0000Results suggest that perceived jurisdiction risk is significantly and positively associated with evasion of tax and regulations, while it is significantly and negatively associated with political stability and regulatory stringency. These have important implications for home and host supervisors with respect to the factors that drive perceived jurisdiction risks and the evaluation of the nature of inherent financial crime risks within regulated firms. The findings confirm the critical role of the shadow economy, political stability and regulatory rigor in shaping jurisdiction risk perceptions. From a policy standpoint, the findings support the case for taking prompt policy action to identify, prioritize and implement specific and targeted measures with respect to the shadow economy, political stability and rigor of regulations to improve international firms’ perceptions of jurisdiction risk.\u0000\u0000\u0000Originality/value\u0000While there exists different measures of financial crime risk, it is notoriously cha","PeriodicalId":38940,"journal":{"name":"Journal of Financial Crime","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-06-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48762812","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-06-23DOI: 10.1108/jfc-04-2023-0090
M. Menz
Purpose This paper aims to show how financial services firms determine whether customer transactions or behaviours meet the threshold for suspicious activity reporting mandated by the Terrorism Act 2000 and the Proceeds of Crime Act 2002, and how suspicious activity reporting is executed in practice. Design/methodology/approach Semi-structured interviews have been carried out among compliance professionals in UK financial services. Findings Two issues related to suspicious activity reporting have been identified. Firstly, a widespread misunderstanding about the tipping-off offence under s. 333 Proceeds of Crime Act 2002 has been identified, which appears to be a root cause for poor quality as well as over-reporting of suspicious activity. Secondly, issues related to the notice and moratorium periods used by the UK’s National Crime Agency appear to deter reporting of suspicious activity related to live transactions. Practical implications The paper makes suggestions for changes financial services firms and the UK’s National Crime Agency can make to improve the effectiveness of suspicious activity reporting. Originality/value The paper provides valuable insights which can be used to limit the flow of criminal funds, improve the quality of suspicious activity reporting and enhance the effectiveness of law enforcement agencies.
{"title":"It is best to say nothing at all – suspicious activity reporting in the financial services sector","authors":"M. Menz","doi":"10.1108/jfc-04-2023-0090","DOIUrl":"https://doi.org/10.1108/jfc-04-2023-0090","url":null,"abstract":"\u0000Purpose\u0000This paper aims to show how financial services firms determine whether customer transactions or behaviours meet the threshold for suspicious activity reporting mandated by the Terrorism Act 2000 and the Proceeds of Crime Act 2002, and how suspicious activity reporting is executed in practice.\u0000\u0000\u0000Design/methodology/approach\u0000Semi-structured interviews have been carried out among compliance professionals in UK financial services.\u0000\u0000\u0000Findings\u0000Two issues related to suspicious activity reporting have been identified. Firstly, a widespread misunderstanding about the tipping-off offence under s. 333 Proceeds of Crime Act 2002 has been identified, which appears to be a root cause for poor quality as well as over-reporting of suspicious activity. Secondly, issues related to the notice and moratorium periods used by the UK’s National Crime Agency appear to deter reporting of suspicious activity related to live transactions.\u0000\u0000\u0000Practical implications\u0000The paper makes suggestions for changes financial services firms and the UK’s National Crime Agency can make to improve the effectiveness of suspicious activity reporting.\u0000\u0000\u0000Originality/value\u0000The paper provides valuable insights which can be used to limit the flow of criminal funds, improve the quality of suspicious activity reporting and enhance the effectiveness of law enforcement agencies.\u0000","PeriodicalId":38940,"journal":{"name":"Journal of Financial Crime","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-06-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43726872","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-06-22DOI: 10.1108/jfc-02-2023-0025
O. Akinbowale, H. E. Klingelhöfer, M. Zerihun
Purpose The purpose of this study is to examine the level of effectiveness of the anti-fraud technologies employed by the South African banking industry for cyberfraud mitigation. Design/methodology/approach This research employed a qualitative research design involving a purposive sampling method. Primary data was collected from the key organisational staff across the 17 licensed commercial banks in South Africa via the use of structured questionnaires. In particular, these were experts involved in combating fraud and taking managerial decisions regarding the use of anti-fraud technologies for cyberfraud mitigation. Non-parametric statistical analyses were carried out from the responses obtained. Findings The results obtained indicated that the combination of internal and external anti-fraud technologies such as filtering software, firewalls, encryption, continuous auditing, discovery sampling, virus protection, financial ratios, digital analysis and data mining may have a positive effect on cyberfraud mitigation. These technologies are employed mostly to ensure effective internal control systems capable of minimising cyberfraud. In addition, the anti-fraud technologies employed in the South African banking industry may also be effective in the mitigation of cyberfraud, although significant cases of cyberattacks were reported by the respondents. Practical implications The study recommends investment in more digital and emerging technologies and the development of human capacities to effectively deploy them in the combat against cybercrime. Originality/value The novelty of this study lies in the identification of the type of anti-fraud technologies/software employed by the South African banking industry and their level of effectiveness or success rate.
{"title":"Investigating the level of effectiveness of the anti-fraud technologies employed by the South African banking industry for cyberfraud mitigation","authors":"O. Akinbowale, H. E. Klingelhöfer, M. Zerihun","doi":"10.1108/jfc-02-2023-0025","DOIUrl":"https://doi.org/10.1108/jfc-02-2023-0025","url":null,"abstract":"\u0000Purpose\u0000The purpose of this study is to examine the level of effectiveness of the anti-fraud technologies employed by the South African banking industry for cyberfraud mitigation.\u0000\u0000\u0000Design/methodology/approach\u0000This research employed a qualitative research design involving a purposive sampling method. Primary data was collected from the key organisational staff across the 17 licensed commercial banks in South Africa via the use of structured questionnaires. In particular, these were experts involved in combating fraud and taking managerial decisions regarding the use of anti-fraud technologies for cyberfraud mitigation. Non-parametric statistical analyses were carried out from the responses obtained.\u0000\u0000\u0000Findings\u0000The results obtained indicated that the combination of internal and external anti-fraud technologies such as filtering software, firewalls, encryption, continuous auditing, discovery sampling, virus protection, financial ratios, digital analysis and data mining may have a positive effect on cyberfraud mitigation. These technologies are employed mostly to ensure effective internal control systems capable of minimising cyberfraud. In addition, the anti-fraud technologies employed in the South African banking industry may also be effective in the mitigation of cyberfraud, although significant cases of cyberattacks were reported by the respondents.\u0000\u0000\u0000Practical implications\u0000The study recommends investment in more digital and emerging technologies and the development of human capacities to effectively deploy them in the combat against cybercrime.\u0000\u0000\u0000Originality/value\u0000The novelty of this study lies in the identification of the type of anti-fraud technologies/software employed by the South African banking industry and their level of effectiveness or success rate.\u0000","PeriodicalId":38940,"journal":{"name":"Journal of Financial Crime","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-06-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45728735","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-06-20DOI: 10.1108/jfc-04-2023-0087
Baba Mohammed Adam, E. Sarpong-Kumankoma, V. Fiador
Purpose This study aims to examine the impact of economic freedom and corruption on bank stability in sub-Saharan Africa (SSA). Design/methodology/approach This study uses 38 countries in SSA from 2008 to 2019 using system GMM technique. Findings The authors found that greater economic freedom increases economic efficiency through improving bank stability. Besides this, the authors also find that banks in environments with greater business freedom, financial freedom, trade freedom and investment freedom are less prone to solvency. The results also show that corruption improves bank stability, suggesting evidence of the “grease the wheels” hypothesis. Practical implications The results suggest to policymakers that a high economic freedom may be an appropriate policy toward enhancing bank stability. Besides this, the results also suggest to policymakers to prioritize addressing the core issues that encourage corruption to extort bribes. Originality/value This study provides insightful discussion on whether economic freedom and its subcomponents and corruption have an effect on bank stability in SSA.
{"title":"Economic freedom, corruption and bank stability: evidence from sub-Saharan Africa","authors":"Baba Mohammed Adam, E. Sarpong-Kumankoma, V. Fiador","doi":"10.1108/jfc-04-2023-0087","DOIUrl":"https://doi.org/10.1108/jfc-04-2023-0087","url":null,"abstract":"\u0000Purpose\u0000This study aims to examine the impact of economic freedom and corruption on bank stability in sub-Saharan Africa (SSA).\u0000\u0000\u0000Design/methodology/approach\u0000This study uses 38 countries in SSA from 2008 to 2019 using system GMM technique.\u0000\u0000\u0000Findings\u0000The authors found that greater economic freedom increases economic efficiency through improving bank stability. Besides this, the authors also find that banks in environments with greater business freedom, financial freedom, trade freedom and investment freedom are less prone to solvency. The results also show that corruption improves bank stability, suggesting evidence of the “grease the wheels” hypothesis.\u0000\u0000\u0000Practical implications\u0000The results suggest to policymakers that a high economic freedom may be an appropriate policy toward enhancing bank stability. Besides this, the results also suggest to policymakers to prioritize addressing the core issues that encourage corruption to extort bribes.\u0000\u0000\u0000Originality/value\u0000This study provides insightful discussion on whether economic freedom and its subcomponents and corruption have an effect on bank stability in SSA.\u0000","PeriodicalId":38940,"journal":{"name":"Journal of Financial Crime","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-06-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46087372","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-06-16DOI: 10.1108/jfc-01-2023-0006
Marcus L. Smith, M. Tiwari
Purpose This paper aims to explain the implications of the impending establishment of national blockchain infrastructure by governments around the world, and how these structures can be integrated with existing legislation and assist in the prevention of financial crime. Design/methodology/approach The methodology used is a literature review and analysis of progress being made to establish national blockchain infrastructure. It provides a discussion of the connection between blockchain and financial crime, and how this infrastructure will interact with existing regulatory frameworks, and particularly, financial crime legislation. Findings This paper documents financial crime risks posed by digital currencies and smart contracts and the role that national blockchain infrastructure can potentially play in mitigating these risks. It highlights the need for governments to devote resources to developing this infrastructure and associated regulatory frameworks. Originality/value There are few, if any, academic papers in the financial crime, or wider literature, that have examined the potential for national blockchain infrastructures prevent financial crime, including the implications for existing regulation in the field.
{"title":"The implications of national blockchain infrastructure for financial crime","authors":"Marcus L. Smith, M. Tiwari","doi":"10.1108/jfc-01-2023-0006","DOIUrl":"https://doi.org/10.1108/jfc-01-2023-0006","url":null,"abstract":"\u0000Purpose\u0000This paper aims to explain the implications of the impending establishment of national blockchain infrastructure by governments around the world, and how these structures can be integrated with existing legislation and assist in the prevention of financial crime.\u0000\u0000\u0000Design/methodology/approach\u0000The methodology used is a literature review and analysis of progress being made to establish national blockchain infrastructure. It provides a discussion of the connection between blockchain and financial crime, and how this infrastructure will interact with existing regulatory frameworks, and particularly, financial crime legislation.\u0000\u0000\u0000Findings\u0000This paper documents financial crime risks posed by digital currencies and smart contracts and the role that national blockchain infrastructure can potentially play in mitigating these risks. It highlights the need for governments to devote resources to developing this infrastructure and associated regulatory frameworks.\u0000\u0000\u0000Originality/value\u0000There are few, if any, academic papers in the financial crime, or wider literature, that have examined the potential for national blockchain infrastructures prevent financial crime, including the implications for existing regulation in the field.\u0000","PeriodicalId":38940,"journal":{"name":"Journal of Financial Crime","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-06-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47467291","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-06-16DOI: 10.1108/jfc-04-2023-0082
Ermira H. Kalaj, Ela Golemi
Purpose This paper aims to focus on analyzing the level of corruption of small- and medium-sized enterprises and their economic performance impact in Western Balkan countries. This study uses survey data from Enterprise Surveys (ES) from 2019, a shared project of the European Bank for Reconstruction and Development, the European Investment Bank and the World Bank Group. The selected countries are Albania, Bosnia and Herzegovina, North Macedonia, Kosovo, Montenegro and Serbia. The questions included in the data set contribute to understanding what firms experience in the private sector. Collected data are based on firms’ experiences and enterprises’ perceptions of the environment in which they operate. Design/methodology/approach This paper measures enterprise performance in terms of sales, employees and fixed assets growth. The vector of independent variables comprises enterprise characteristics such as enterprise age, size, ownership structure, legal status, access to formal banking services, gender ownership and other composed variables. Moreover, to capture the level of perceived corruption by firms, we will focus on the following ES questions: “Is it common to have to pay some irregular additional payment or gifts to get things done with regard to customs, taxes, licenses, regulations, services,” and the “corruption payment” is defined in the form of a dummy equal to one if the enterprise replies “frequently,” “usually” or “always.” Findings Preliminary empirical research results shed light on the level and effects of corruption on enterprises’ performance. However, the magnitude and statistical significance are different among the countries included in the sample. Originality/value Instead of firm-level characteristics, research on corruption frequently focuses on effects dependent on national and institutional characteristics. To better identify the kinds of businesses that are most at risk of corruption, we have selected to focus on differences among firm characteristics in this research. Understanding factors at the firm level is preferred from a policy perspective because these findings assist policymakers to make recommendations.
{"title":"A comparative analysis on the nexus between corruption and firm performance for a selection of Western Balkan countries","authors":"Ermira H. Kalaj, Ela Golemi","doi":"10.1108/jfc-04-2023-0082","DOIUrl":"https://doi.org/10.1108/jfc-04-2023-0082","url":null,"abstract":"\u0000Purpose\u0000This paper aims to focus on analyzing the level of corruption of small- and medium-sized enterprises and their economic performance impact in Western Balkan countries. This study uses survey data from Enterprise Surveys (ES) from 2019, a shared project of the European Bank for Reconstruction and Development, the European Investment Bank and the World Bank Group. The selected countries are Albania, Bosnia and Herzegovina, North Macedonia, Kosovo, Montenegro and Serbia. The questions included in the data set contribute to understanding what firms experience in the private sector. Collected data are based on firms’ experiences and enterprises’ perceptions of the environment in which they operate.\u0000\u0000\u0000Design/methodology/approach\u0000This paper measures enterprise performance in terms of sales, employees and fixed assets growth. The vector of independent variables comprises enterprise characteristics such as enterprise age, size, ownership structure, legal status, access to formal banking services, gender ownership and other composed variables. Moreover, to capture the level of perceived corruption by firms, we will focus on the following ES questions: “Is it common to have to pay some irregular additional payment or gifts to get things done with regard to customs, taxes, licenses, regulations, services,” and the “corruption payment” is defined in the form of a dummy equal to one if the enterprise replies “frequently,” “usually” or “always.”\u0000\u0000\u0000Findings\u0000Preliminary empirical research results shed light on the level and effects of corruption on enterprises’ performance. However, the magnitude and statistical significance are different among the countries included in the sample.\u0000\u0000\u0000Originality/value\u0000Instead of firm-level characteristics, research on corruption frequently focuses on effects dependent on national and institutional characteristics. To better identify the kinds of businesses that are most at risk of corruption, we have selected to focus on differences among firm characteristics in this research. Understanding factors at the firm level is preferred from a policy perspective because these findings assist policymakers to make recommendations.\u0000","PeriodicalId":38940,"journal":{"name":"Journal of Financial Crime","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-06-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46386427","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-06-12DOI: 10.1108/jfc-04-2023-0091
Thanee Chaiwat, Torplus Yomnak
Purpose The economic theory of crime states that crime can be prevented by either increasing the probability of being detected or increasing penalties. However, individual responses to fines and imprisonment may vary, and corruption can reduce both the probability of being detected and punishment costs. The purpose of this study is to investigate the effects of corruption on crime prevention. Design/methodology/approach This study used an experiment to investigate the effects of criminalisation and corruption. This study tested whether individuals respond differently to variables on the probability of being detected and punishment costs and whether corruption affects these variables. Findings The results of this study demonstrated that increasing the probability of being detected initially reduces crime rates more efficiently than increasing penalties, then the efficiency gradually reduces, and that corruption reduces the effectiveness of detection and punishment. Research limitations/implications Ineffective corruption prevention is not solely attributed to corrupt police, as illicit payments and personal connections also contribute to corruption. Practical implications Policymakers and law enforcement agencies should focus on preventive measures by increasing the chance of being detected, creating transparency and encouraging public participation to address corruption problems thoroughly. Originality/value This research conducted in Thailand investigates the effectiveness of crime-prevention mechanisms and considers the impact of corruption. This study offers insights into how criminals perceive detection and punishment costs under different social-political environments.
{"title":"Criminal behaviour on detection and penalty: an experimental evidence from drug market game","authors":"Thanee Chaiwat, Torplus Yomnak","doi":"10.1108/jfc-04-2023-0091","DOIUrl":"https://doi.org/10.1108/jfc-04-2023-0091","url":null,"abstract":"\u0000Purpose\u0000The economic theory of crime states that crime can be prevented by either increasing the probability of being detected or increasing penalties. However, individual responses to fines and imprisonment may vary, and corruption can reduce both the probability of being detected and punishment costs. The purpose of this study is to investigate the effects of corruption on crime prevention.\u0000\u0000\u0000Design/methodology/approach\u0000This study used an experiment to investigate the effects of criminalisation and corruption. This study tested whether individuals respond differently to variables on the probability of being detected and punishment costs and whether corruption affects these variables.\u0000\u0000\u0000Findings\u0000The results of this study demonstrated that increasing the probability of being detected initially reduces crime rates more efficiently than increasing penalties, then the efficiency gradually reduces, and that corruption reduces the effectiveness of detection and punishment.\u0000\u0000\u0000Research limitations/implications\u0000Ineffective corruption prevention is not solely attributed to corrupt police, as illicit payments and personal connections also contribute to corruption.\u0000\u0000\u0000Practical implications\u0000Policymakers and law enforcement agencies should focus on preventive measures by increasing the chance of being detected, creating transparency and encouraging public participation to address corruption problems thoroughly.\u0000\u0000\u0000Originality/value\u0000This research conducted in Thailand investigates the effectiveness of crime-prevention mechanisms and considers the impact of corruption. This study offers insights into how criminals perceive detection and punishment costs under different social-political environments.\u0000","PeriodicalId":38940,"journal":{"name":"Journal of Financial Crime","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-06-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47783530","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-06-08DOI: 10.1108/jfc-04-2023-0076
R. Kandukuri
Purpose Stockbrokers’ frauds in India frequently occur, causing investors significant financial loss. This study aims to unfold the various dubious practices adopted by stock brokers in the recent past to defraud investors and the necessary corrective regulations passed by the market regulator to prevent and detect fraud. Design/methodology/approach The authors conduct exploratory research using a collective model of literature review, case studies and regulatory changes. Findings The authors find tightening the system’s loopholes and strengthening the regulatory system using technology helps in the early detection and prevention of fraud. Media activism and investors’ awareness play a role in reducing incidences of fraud. Research limitations/implications This study unfolds the practices followed by stock brokers to defraud investors, indicative of regulatory gaps and enforcement lapses. Regulators are evolving a robust system to curb these practices and make them on par with international standards. But, it has a long way to go. Practical implications Robust fraud detection and prevention mechanism is desirable to restore investors’ confidence in the stock market. Regulators should focus on investors’ protection and education and whistleblowers’ protection. Compared to the market regulators worldwide, the Securities and Exchange Board of India has less power to identify, detect and punish fraudulent brokers and needs to be empowered. Social implications Besides the regulatory changes, strict enforcement and investor campaigns are required to increase public awareness and restore trust in the stock market to combat the recurrence of fraud. Originality/value This paper can be helpful to regulators, investors and financial intermediaries like stock brokers and aid in strengthening the reliability of capital markets and restoring investors’ confidence.
{"title":"An analysis of stockbroking frauds and regulatory action in India","authors":"R. Kandukuri","doi":"10.1108/jfc-04-2023-0076","DOIUrl":"https://doi.org/10.1108/jfc-04-2023-0076","url":null,"abstract":"\u0000Purpose\u0000Stockbrokers’ frauds in India frequently occur, causing investors significant financial loss. This study aims to unfold the various dubious practices adopted by stock brokers in the recent past to defraud investors and the necessary corrective regulations passed by the market regulator to prevent and detect fraud.\u0000\u0000\u0000Design/methodology/approach\u0000The authors conduct exploratory research using a collective model of literature review, case studies and regulatory changes.\u0000\u0000\u0000Findings\u0000The authors find tightening the system’s loopholes and strengthening the regulatory system using technology helps in the early detection and prevention of fraud. Media activism and investors’ awareness play a role in reducing incidences of fraud.\u0000\u0000\u0000Research limitations/implications\u0000This study unfolds the practices followed by stock brokers to defraud investors, indicative of regulatory gaps and enforcement lapses. Regulators are evolving a robust system to curb these practices and make them on par with international standards. But, it has a long way to go.\u0000\u0000\u0000Practical implications\u0000Robust fraud detection and prevention mechanism is desirable to restore investors’ confidence in the stock market. Regulators should focus on investors’ protection and education and whistleblowers’ protection. Compared to the market regulators worldwide, the Securities and Exchange Board of India has less power to identify, detect and punish fraudulent brokers and needs to be empowered.\u0000\u0000\u0000Social implications\u0000Besides the regulatory changes, strict enforcement and investor campaigns are required to increase public awareness and restore trust in the stock market to combat the recurrence of fraud.\u0000\u0000\u0000Originality/value\u0000This paper can be helpful to regulators, investors and financial intermediaries like stock brokers and aid in strengthening the reliability of capital markets and restoring investors’ confidence.\u0000","PeriodicalId":38940,"journal":{"name":"Journal of Financial Crime","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-06-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43367934","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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