Case Studies

Nick Leeson, the 'rogue trader' responsible for the demise of Barings Bank had applied in 1992 for registration as a dealer with the Securities and Futures Authority (SFA) in the UK. However, the SFA discovered that Leeson had made a false statement on his application form, about unsatisfied judgement debts against him. The FSA queried Barings on this matter and Barings subsequently withdrew the application.

When Leeson was posted to Singapore, his previous history was never communicated to the Singapore exchange (SIMEX) and in his application to SIMEX, Leeson made a similar false statement that no judgement in civil proceedings had ever been entered against him.

An unqualified accountant who stole £867,000 from the office of deputy prime minister (ODPM) was jailed for four years.

Robert Adewunmi, 32, failed to come clean about his criminal past and lied about his chartered accountant qualifications to get a job at John Prescott's office.

His wife Tami, 31, was jailed for six months for aiding and abetting the deception.

Soon after starting work, Mr Adewunmi set up a front firm RTR Housing Association Ltd, and used the name of his eldest daughter as an imaginary client to siphon off up to £133,000 at a time.

At Southwark Crown Court yesterday, the jury heard the gambling addict used some of the cash to clear his debts before embarking on a luxury lifestyle.

Mr Adewunmi admitted to fraudulent trading and money laundering between September 2003 and October 2004.

The pair bought expensive cars and properties in the UK and Florida.

Delivering his judgment judge Christopher Hardy said the father-of-two had masterminded an "audacious fraud on a large scale".

Mr Adewunmi was employed as a "trouble-shooter" in the ODPM's budget and data management division.

Caroline Spelman, Conservative shadow secretary for the ODPM, said: "This conviction is extremely serious. This raises yet more questions about John Prescott's leadership."

Source: Politics.co.uk dated Sat 11 Mar 2006

Bruce George MP

MP Calls for action on identity theft

A Labour Member of Parliament is urging businesses to ensure that they have sound vetting processes in place for recruiting new staff. Speaking at a recent press briefing, Bruce George, MP for Walsall South, claimed that identity theft was approaching epidemic levels. He argued that firms had a duty of care to their shareholders to ensure that they used rigorous controls to prevent fraud, industrial espionage and even terrorism.

For organizations whose employees have access to sensitive information – particularly in the finance function – he recommended adherence to the security industry’s recently revised standard, BS7858. This requires written employment verifications, credit checks and personal written references.

Mr George, who chairs the Commons Defence Select Committee, argued that vetting should be conducted at every level. “There is no point in a company having the best vetting process in the world if the contract cleaners it employs are not vetted and could allow the theft of its official documents,” he explained, “Companies may think they are saving money by short-cutting proper checks, but we have to be serious about security – and I’m afraid that not enough companies are taking it seriously.”

Even more reasons to vet your employees:-

Below are some links that give more reasons to vet your staff before employing them:

http://news.bbc.co.uk/1/hi/business/4441388.stm

http://news.bbc.co.uk/1/hi/business/5122886.stm

http://www.mirror.co.uk/news/tm_objectid=17307650%26method=full%26siteid=94762%26headline=phoney%2dbanking%2d%2dsecurity%2dwarning%2dover%2dindian%2dcall%2dcentres%2d-name_page.html

http://www.personneltoday.com/Articles/2005/08/10/31122/City+chiefs+turn+blind+eye+to+threat+of+terrorism.htm