PwC 'Basic Steps' Needed to Prevent Fraud on the Trading Floor

23 Nov, 2012

PwC’s Andrew Clark (pictured), Financial Services lead in PwC’s Forensic Services team, has commented on the basic fundamentals businesses should look at to help prevent fraud on the trading floor.

“One prime example is to ensure that standard two week trader vacations are being enforced or monitored – this is when a trader should  be completely distanced from his/her trading books. This is not happening as regularly as it should and even with those employees that are taking the requisite break some are still able to tap into their accounts to trade remotely using the latest technology.”

Other examples of things organisations should be checking include effective on-site vigilance of trading activities by trading desk managers, regular reviews of the nature and frequency of any trade cancellations or amendments (which could mask underlying unauthorised trading), and who in the organisation is responsible for managing the risk of “rogue trading”.

“No organisation can stop an employee from going rogue: where there is the will there is a way.  But they can act to protect shareholder value from future rogue activity. Organisations should look to shut down the channels that rogue employees might look to abuse. They should embed a robust framework of controls in the operational environment that not only acts as a deterrent but also ensures that any rogue activity is swiftly detected,” he added.

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