Rogue trading and fraud

Rogue Trading controls framework has been, for the most part, designed in 2010 and has not been (or rarely) updated since then.

The innovation wave and the tools it brings offers new possibilities. It is the opportunity to revisit and reinforce this framework.

Let discuss how you can get a head start!

Understanding « Rogue Trading »

3 main conditions must be met for a fraud to qualify as « Rogue trading »

• Knowingly undertaking unauthorized trading activities with regard to the trading/desk mandates and the market risks limits in place 
• The unauthorized trading activities have been concealed from the Management
• The trader had the objective of generating a profit, dissimulating a financial loss or hiding an unauthorized position

Where AI and Innovation can help

AI can operate at various levels to help capture, detect and qualify rogue trading patterns

Enhance individual controls to better capture weak signals

An overview of Rogue Trading Controls :

• Unconfirmed deals
• Off market price
• Deferred dealing
• Large amount
• etc.

Enjoy the read and don’t hesitate to reach out for in-depth discussions !