Presentation on Financial Crimes. Money is one of the most important reasons behind all forms of crime whether Cyber or Internet crimes, Physical or Theft crimes. With the advancement of technology the crime has not decelerated but only esteemed and many more new techniques were by people and they were popularly called as Blackhat hackers. In this presentations we give an over view of the whole scenario.

1. Financial Crimes
Presented By
Animesh Shaw (Psycho_Coder)
Digital Evidence Analyst Trainee

2. Discussion Goals
• Introduction to Financial
Crimes.
• Facts & Reasons.
• Basic Financial Concepts
and Terminologies.
– Equity Shares
– Sensex
– Derivatives
– Debentures
– Circuit Breaker.
– Insider Trading.
– Options
– Hedging
• Types of Financial Crimes
– Tax Evasion.
– Online Bank Theft.
– Credit Card Frauds.
– Money Laundering.
– E-Commerce Frauds
• Protection against Financial
Crimes.
• References.
• Questions ?

3. Financial Crimes – An Introduction

4. Introduction to Financial Crimes (FC)
• “Financial crimes are crimes against property, involving the
unlawful conversion of the ownership of property (belonging
to one person) to one's own personal use and benefit.”
• FC may involve fraud (credit card fraud, corporate fraud,
securities fraud (including insider trading), bank fraud,
payment (point of sale) fraud etc.); theft; scams or
confidence tricks; tax evasion; identity theft; money
laundering; and counterfeiting, including the production
of Counterfeit money and consumer goods.

5. White-Collar-Crime
• White-collar crime refers to financially motivated nonviolent
crime committed by business and government professionals.
• Defined by sociologist Edwin Sutherland in 1939 as "a crime
committed by a person of respectability and high social status
in the course of his occupation“
• Examples :- fraud, forgery,
cybercrime, insider
Trading, etc.

6. Facts & Reasons

7. Reasons for FC
• The Primary reason – “Money”
• Revenge, Grudge.
• Fun.
• Testing personal skillsets.

8. Why Financial Crime is so Widespread ?
• Lack of awareness.
• Lack of Knowledge and enthusiasm to learn.
• Unable to adapt to emerging technology.
• Lack of Training in Cyber Security.
• Carelessness.
• Tendency to stick to old methods.

9. Facts or Statistics on FC
• Cyber crimes in India have seen a sudden spurt.
• Cyber crimes have gone up by 60 per cent in 2012 at
3,500 as against 2,070 in the previous year.
• Age group involved – 18 to 30.
• Maharashtra topped the list with 561 (393 in 2011)
crimes, followed by Andhra Pradesh with 454 (372)
and Karnataka 437 (160)

11. ..contd.
• “Financial offences dominate cyber crimes. Of late, we have
noticed an increase where the fraudsters hacking into email
accounts of companies and of customers. They read the entire
email thread and lure the customers to deposit money in a
fake account, duping both,” T.S. Uma Maheswara Rao,
Inspector of Police (Cyber Crime Police Station, Hyderabad),
told Business Line.

12. BASIC FINANCIAL CONCEPTS AND
TERMINOLOGIES
A Overview of Finance related terms.

13. Equity Shares
• Equity is a part of a company, also known as stock or share. When you buy
shares of a company, you basically own a part of that company.
• Two Types :-
– Equity Shares : Both public and private corporations issue equity
shares. Equity shareholders are the owners of a company and initially
provide the equity capital to start the business.
– Preference Shares : A preference share is a type of share capital that
generally enables shareholders to fixed dividends ahead of the
company`s common shares and to a stated rupee value per share in
the event of liquidation

14. Sensex ( Bombay Stock Exchange
Sensitive Index)
• A figure indicating the relative prices of shares on the
Mumbai (Bombay) Stock Exchange.
SENSEX FOR TODAY = OLD VALUE X (NEW CAPITALIZATION/OLD
CAPITALIZATION)

15. Derivatives
Derivatives are financial
instruments whose value is
derived from the prices of one
or more underlying assets.
These underlying assets could
be equity shares, foreign
currencies, corn, wheat, silver
etc.

16. 1. Forward contracts are contracts between two parties whereby one party agrees
to sell to another party at some point in the future for a price agreed upon now.
2. Futures contract is an agreement between two parties to buy or sell an asset
at a certain time in the future at a certain price.
3. Option is a contract, which gives the buyer the right, but not the obligation to
buy or sell an underlying security at a specific price on or before a specific date.
Derivatives
DERIVATIVES
FORWARDS FUTURES OPTIONS

17. ESP (EARNINGS PER SHARE)
Earnings per share (EPS) is an important financial ratio that helps to compare the
profitability of various companies.
EPS = Net Profit (after tax and preference share dividend) /No. of shares
P/E RATIO
• The price to earnings ratio (P/E ratio) is a ratio of the share price of a company
to the earnings per share.
P / E ratio = Market price per share/Earnings per share

18. Debentures
A debenture is an instrument of debt executed by the
company acknowledging its obligation to repay a sum at a
specified rate and also carrying an interest.

19. NCD
•NON CONVERTIBLE
DEBENTURES
PCD
•PARTIALLY CONVERTIBLE
DEBENTURES
FCD
•FULLY CONVERTIABLE
DEBENTURES
MAJOR TYPES OF DEBENTURES

20. OTHER TYPES OF DEBENTURES
EXTENDABLE
DEBENTURES

21. Circuit Breaker
Circuit breaker is the system in which the share price of a
specific stock (or the index as a whole) rises or falls by
more than a specified percentage, trading is then
suspended for some time (or for the rest of the day) to let
the market cool down.

22. Insider Trading
An Insider is a person who, because of his connections
with a company, has access to unpublished price sensitive
information in respect of securities of a company.

23. Options
An option is a contract,
which gives the buyer the
right, but not the obligation
to buy or sell an underlying
security at a specific price on
or before a specific date.
‘Option’, as the word
suggests, is a choice given to
the investor to either honour
the contract; or ignore the
contract.

24. ..contd.
CALL OPTION: A Call Option is an option
to buy a stock at a specific price on or
before a certain date.
PUT OPTION: A Put Option is an option
to sell a stock at a specific price on or
before a certain date.
_______________________________
EUROPEAN OPTION: European options
give the holder the right, but not the
obligation, to buy or sell the underlying
instrument only on the expiry date.
AMERICAN OPTION: American options
give the holder the right, but not the
obligation, to buy or sell the underlying
instrument on or before the expiry date.

25. Hedging
A hedge is an investment that is taken out specifically to reduce or
cancel out the risk in another investment.
Hedging is a strategy designed to minimize exposure to an unwanted
business risk, while still allowing the business to profit from an
investment activity.

26. Types of Financial Crimes

27. Tax Evasion
Tax evasion is using illegal means to avoid
paying taxes. Typically, tax evasion schemes
involve an individual or corporation
misrepresenting their income to the Internal
Revenue Service.

28. ..contd.

29. Online Bank Theft
• Hacking into bank servers.
• Stealing Customers data, account
information's, credit card details.
• Money Transfer from one account to
another account.
• Huge loss in economy.

30. Credit Card Frauds
• Credit card fraud is a wide-ranging term for theft
and fraud committed using or involving a payment card, such as
a credit card or debit card, as a fraudulent source of funds in a
transaction.
• The purpose may be to obtain goods without paying, or to
obtain unauthorized funds from an account.

31. Statistics for Credit Card Frauds

32. Protection against Credit Card Frauds
• Don’t give your account number to anyone on the phone unless
you’ve made the call to a company you know to be reputable. If
you’ve never done business with them before, do an online search
first for reviews or complaints.
• Carry your cards separately from your wallet. It can minimize your
losses if someone steals your wallet or purse. And carry only the
card you need for that outing.
• During a transaction, keep your eye on your card. Make sure you
get it back before you walk away.
• Never sign a blank receipt. Draw a line through any blank spaces
above the total.
• Save your receipts to compare with your statement.
• Open your bills promptly — or check them online often — and
reconcile them with the purchases you’ve made.
• Report any questionable charges to the card issuer.
• Notify your card issuer if your address changes or if you will be
traveling.
• Don’t write your account number on the outside of an envelope.

33. Money Laundering
Money laundering is the process in which the proceeds
of crime are transformed into ostensibly
legitimate money or other assets.

34. ..contd.

35. E-commerce Frauds
• Falling victim to false e-Commerce sites.
• Losing Credit/Debit card/Online Banking
Authentication Credentials.
• Due to Phishing.

36. ..contd.
Distribution of e-Commerce Frauds around
the world.

37. Protection Against Financial Crimes
We’re continually reviewing our approach to ensure
we’re doing our best to stop money laundering,
terrorist financing and fraud and corruption. This
includes:
• Regularly or periodically reviewing and amending our
policies and procedures so that they remain relevant
and up-to-date
• Training ourselves on how to prevent, detect and react
to financial crime
• Checking our financial crime systems and controls to
ensure that they work efficiently and effectively
• Working closely with governments, law enforcement
agencies, regulators and the banking industry to share
best practice and contribute to ongoing initiatives
which combat crime risk.

38. References
1. http://en.wikipedia.org/wiki/Financial_crimes
2. http://en.wikipedia.org/wiki/White-collar_crime
3. http://www.havocscope.com/amount-of-money-laundered-
each-year/
4. http://en.wikipedia.org/wiki/Securities_fraud
5. Investigating Financial Crimes, Rohas Nagpal, Published by
ASCL (Asian School of Cyber Laws)
6. Data64 Presentation – Financial Crimes.
7. http://www.thehindubusinessline.com/industry-and-
economy/info-tech/financial-offences-top-cyber-crimes-in-
india/article4901219.ece
8. http://en.wikipedia.org/wiki/Credit_card_fraud

39. Questions ? Doubts ?
Queries ?

40. Thank you