Preventing Investment Fraud

The Preventing Investment Fraud Seminar was designed to give the attendee all the knowledge necessary to better prevent fraudulent activities in an institutional investor environment. During the past 25 years there have been countless financial scandals involving all sorts of individuals and incorporating a vast array of methods. Although the title of the course includes “auditing” it is appropriate for anyone seeking a background on what has gone wrong in the financial markets during recent history. This program was developed for the sole purpose of preventing any of these frauds from occurring within your organization. This seminar will give the attendee a thorough understanding of every weakness within the investment department and the clues to look for to uncover any scheme before it becomes ruinous.

During the Preventing Investment Fraud Seminar the attendee will focus on gaining a broad, comprehensive knowledge of how the investment system is organized and where weaknesses exist. There will be discussion about various types of securities, which are bought and owned by institutional investors that create pricing and accounting concerns: CDO’s, Credit Default Swaps and a host of other derivative and fixed income instruments. One of the primary concentrations of the session will be an examination of the accounting and pricing risks associated with the investment department, including, but not limited to FAS 157 and the changing landscape of “mark-to-market” accounting. Finally, there will be a step-by-step examination of many of the major frauds of the past 20 years and the clues that were clearly available to prevent them that were missed.

Listed below are some of the topics, which are covered in the Preventing Investment Fraud Seminar:

• Complete Review of Investment Market Infrastructure
• Investment Managers
• Brokers
• Markets
• Custodians
• DTC and Euroclear
• The Federal Reserve and Global Central Banks
• The Bank for International Settlements
• Complete Review of Problem Securities
• CDO, CBO, CLO, CMO, CMBS and ABS
• Derivatives – Options, Futures, Forwards, Swaps
• International Debt and Equities
• Proper Controls For the Investment Department
• Accounting Issues
• FAS 157 – “Mark-to-Market”
• FAS 133 and IAS 39
• Book Value - Amortization and Accretion Methods
• Proper Pricing Conventions
• Category 3 Pricing
• Easy-to-Use Pricing for Fixed Income Securities
• Pricing Variables for MBS & ABS Products
• Derivative Pricing Techniques for Non-Investment Managers
• In-Depth Analysis of the Major Disasters
  • Improper Investment Guidelines and Controls” – Orange County California
  • “The Rogue Trader” – Nick Leeson and Barings
  • “Too Much Leverage” – Long Term Capital Management, Lehman and Bear Stearns
  • “Accounting Trickery” – Enron and Others
  • “Overloading in Risky Products” – AIG and Credit Default Swaps
  • “Ponzi Schemes and the Thieves” – Bernard Madoff
  • “Conspiracies Between Investment Managers & Brokers” – Anonymous Companies
  • “Overly Aggressive Pricing of Assets” – All Major U.S. Banks

The Preventing Investment Fraud Seminar is ideal for the following staff members:
• Internal and External Auditors
• Investment Accountants
• Investment Operations Staff
• Investment Systems & IT Professionals
• Senior Management
• CFOs/Controllers
• Directors and Trustees

Preventing Investment Fraud Course Schedule

Day One
8:30 - 8:45 Introduction/Course Objectives
8:45 - 9:30 The Infrastructure of the Investment Marketplace
9:30 - 10:30 Investment Department Operation and Controls
10:30 - 10:45 Break
10:45 – 12:00 Investment Department Operation and Controls – Part 2
12:00 - 1:00 Lunch
1:00 - 2:30 Problem Securities – Fixed Income
2:30 - 2:45 Break
2:30 - 3:00 Problem Securities – Derivatives
3:00 - 4:00 Accounting Issues – FAS 133 & 157, IAS 39
4:00 – 5:00 Questions and Review

Day Two
8:30 - 10:30 Pricing Techniques for Fixed Income with Exercise
10:30 - 10:45 Break
10:45 – 12:00 Pricing Techniques for Derivatives with Exercise
12:00 - 1:00 Lunch
1:00 - 2:30 Examining the Scandals – Part One
2:30 - 2:45 Break
2:45 – 4:00 Examining the Scandals – Part Two
4:00 – 5:00 Questions and Review