How do Fis deal with classifying op risk loss events under the non-MECE Basel Types
Write an answer
Write an answer
An employee aids a friend to obtain a loan from a fictitious company owned by their friend
Internal Fraud
External Fraud
Client Product and Business Practices
A trader creates fictitious trades by falsifying trading records
Internal Fraud
External Fraud
Clients, Products & Business Practices
A trader trades on insider information creating fraudulent profits for the employer
Internal Fraud
External Fraud
Clients, Products & Business Practices
Employee fraudulently sells products to clients
Internal Fraud
External Fraud
Clients, Products & Business Practices
Write an answer
A hacker steals money from a client account
Internal Fraud
External Fraud
Clients, Products & Business Practices
Write an answer
Can an employee's fraudulent behaviour, specifically involving the sale of products or services to clients be categorized as internal fraud? If so, how does it differ from clients&business practice violations?
I am wondering in the case of an employee fraudulently selling products to clients, because it involves an employee and the fact that the employee is performing fraudulently, could it be classified as internal fraud? I am a bit confused in terms of the case that involves both employees and clients.
I am still a bit unclear on the difference between CPBP and Internal Fraud. Do we differentiate them based on who bears the loss?
There is a debate about whether a trader using insider information for fraudulent profit on behalf of their employer should be categorized as 'internal fraud' or 'CPBP'. Half of students select 'internal fraud', while the other half choose 'CPBP'. I think in this case, this event should be categorize as 'CPBP', as the event did not cause a loss to the employer. However if the trader incurred a loss using insider information, should this be categorized as internal fraud or 'CPBP'?
I noticed the majority of students chose "Employee fraudulently sells products to clients" as clients, products & business practices, but I think this depends on whether the company is aware of it. For instance, I believe it is clients, products & business practices if the company is asking their employees to sell fraudulent products to gain profit. But in this context, I assumed the employee is doing this on his/her own behalf to gain benefit (e.g. keep the good product company gives and sell the fake product for personal gains). This action will damage the company's reputation and I would define it as internal fraud instead.