4 ms·

That's actually pretty common criminal activity in banking, where an employee will take money from accounts of clients and "gamble" it on high-return short term

by mrtksn 3y ago

That's actually pretty common criminal activity in banking, where an employee will take money from accounts of clients and "gamble" it on high-return short term investments. Obviously I won't be naming Banks here but what usually happens is: 1) If they succeed in their investment they put the money back and walk out rich. Their venture can be detected during an audit some time later but if there's no money missing the worst that will happen is that they will be fired because banks are very sensitive on their reputation and they don't want people to hear that its possible for a such thing to happen. They also don't want the insurance and other regulatory bodies to hear about this. 2) If they are caught before returning the money(this could be audit, customer complaint or a whistleblower) they will be given the option to return the money and get fired. If they can't return the money, then a formal investigation and criminal case is initiated. 3) If they lose their investment, they will flee and trigger an audit. They won't be able to resign and leave gracefully because the process of using this money involves periodically putting it back at strategic times to avoid trigger an audit due to discrepancies, therefore it's very risky to keep coming back to work if you don't have the ability to put the money back at short notice. This is one of the reason for people in banking having mandatory 2 weeks time off at a time in many jurisdictions. Stealing needs maintenance and maintenance needs access. I also wouldn't call it "repay his debt to society" because due to money that he stole, he made the public transport more expensive and housing less affordable.

deleted 3y ago
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nicgrev103 3y ago
Isn't this literally what banks do? Take peoples deposits paying a minimal interest rate and then invest that money to earn a return higher than the interest rate they pay the customer (they actually will also borrow more money on the back of your deposit). So, when it's the bank doing it it's ok but a bank employee doing it independently for personal gain it's an issue. The book deal aspect was interesting also. So, the guy profits and has a potentially lucrative book deal with minimal jail time.
- mrtksn 3y ago
  Yes but banks do it within a legal framework that moderates the risk(at least in theory) and people know what they are signing into and what are their guarantees. You don't see too many banks collapsing, don't you? When it happens, its a big deal like with the SVB earlier last year. It's also what Sam Bankman-Fried and others did in exchanges that acted as unregulated banks. The system is not perfect and there are many scandals but if you compare it to what happens in crypto exchanges, its a day and night difference. Running a machine as intended and screwing up is different from pretending doing one thing and actually doing something else and screwing up. This is also why bankers and fund managers don't usually go to jail when they lose clients money. It's not illegal to suck at your job as long as you follow the rules.
  - lotsofpulp 3y ago
    >You don't see too many banks collapsing, don't you? When it happens, its a big deal like with the SVB earlier last year. "Moderating risk" = depending on the US federal government bail you out? There really is no need for the charade of banks now that electronic databases are very solid technology. Their whole role in transmitting and keeping an account of money is surely reproducible by the federal government at very little cost (maybe even lower cost due to not needing FDIC and all that infrastructure) without having to pay a middleman.
    - mrtksn 3y ago
      Nope. It's about creating a system that attempts to analyse risks and invests within margins that are acceptable for specific products. It impossible for a bank for example to put all their money into Dogecoin because someone got a hunch that Musk will tweet about it. To do that they will need to create some kind of instrument that allows others to bet on Musks tweeting habits. > There really is no need for the charade of banks now that electronic databases are very solid technology. Their whole role in transmitting and keeping an account of money is surely reproducible That's not what banks do. You can do that without being a bank, like PayPal did. Most places will have different and much lightweight regulations than banks for this and you will go to jail if you do anything more than holding and transmitting customer money.
belter 3y ago
I worked in finance and I am not aware of jurisdictions that mandate 2 weeks time off. Can you mention one? I am aware of some recommendations but I have worked up to board level, and never see this being more than an excuse to not miss the next golf tournament.
- mywacaday 3y ago
  I worked in a bank in Europe that was Dutch owned and we were requied to take two weeks. I don't know of that was a company policy though.
  - belter 3y ago
    Sounds like these are recommendations some organizations can use or substitute by better methods of auditing. I would argue that if fraud can be covered by the presence of an individual, the problem is with the audit processes and controls in place. Plus the individual being aware of the requirement could easily circumvent by only stealing every quarter or every month :-) "Required Absences from Sensitive Positions" - https://www.newyorkfed.org/banking/circulars/10923.html https://www.newyorkfed.org/banking/circulars/10923.html
  - oblio 3y ago
    It probably wasn't. In many places in Europe it's legally mandated for employees to have 1 big leave per year, at least 2 weeks, so that they can fully unwind. https://www.codulmuncii.ro/titlul_3/capitolul_3_1.html https://www.codulmuncii.ro/titlul_3/capitolul_3_1.html > (5) In cazul in care programarea concediilor se face fractionat, angajatorul este obligat sa stabileasca programarea astfel incat fiecare salariat sa efectueze intr-un an calendaristic cel putin 10 zile lucratoare de concediu neintrerupt. "at least 10 working days of non-interrupted leave" Of course, this is not always enforced, but many countries to have it as part of the labor code.
- mrtksn 3y ago
  The "mandatory 2 weeks time off at a time in many jurisdictions" statement might not be precise enough or technically accurate description of the legal status. It's more like "everywhere I know it's mandatory to take 2 weeks time off" and the mandate can come from the institution itself, their partners or a regulatory body recommendation or requirement.

by mrtksn 3y ago

deleted 3y ago

[deleted]

nicgrev103 3y ago

Isn't this literally what banks do? Take peoples deposits paying a minimal interest rate and then invest that money to earn a return higher than the interest rate they pay the customer (they actually will also borrow more money on the back of your deposit). So, when it's the bank doing it it's ok but a bank employee doing it independently for personal gain it's an issue. The book deal aspect was interesting also. So, the guy profits and has a potentially lucrative book deal with minimal jail time.

mrtksn 3y ago
Yes but banks do it within a legal framework that moderates the risk(at least in theory) and people know what they are signing into and what are their guarantees. You don't see too many banks collapsing, don't you? When it happens, its a big deal like with the SVB earlier last year. It's also what Sam Bankman-Fried and others did in exchanges that acted as unregulated banks. The system is not perfect and there are many scandals but if you compare it to what happens in crypto exchanges, its a day and night difference. Running a machine as intended and screwing up is different from pretending doing one thing and actually doing something else and screwing up. This is also why bankers and fund managers don't usually go to jail when they lose clients money. It's not illegal to suck at your job as long as you follow the rules.
- lotsofpulp 3y ago
  >You don't see too many banks collapsing, don't you? When it happens, its a big deal like with the SVB earlier last year. "Moderating risk" = depending on the US federal government bail you out? There really is no need for the charade of banks now that electronic databases are very solid technology. Their whole role in transmitting and keeping an account of money is surely reproducible by the federal government at very little cost (maybe even lower cost due to not needing FDIC and all that infrastructure) without having to pay a middleman.
  - mrtksn 3y ago
    Nope. It's about creating a system that attempts to analyse risks and invests within margins that are acceptable for specific products. It impossible for a bank for example to put all their money into Dogecoin because someone got a hunch that Musk will tweet about it. To do that they will need to create some kind of instrument that allows others to bet on Musks tweeting habits. > There really is no need for the charade of banks now that electronic databases are very solid technology. Their whole role in transmitting and keeping an account of money is surely reproducible That's not what banks do. You can do that without being a bank, like PayPal did. Most places will have different and much lightweight regulations than banks for this and you will go to jail if you do anything more than holding and transmitting customer money.

belter 3y ago

I worked in finance and I am not aware of jurisdictions that mandate 2 weeks time off. Can you mention one? I am aware of some recommendations but I have worked up to board level, and never see this being more than an excuse to not miss the next golf tournament.

mywacaday 3y ago
I worked in a bank in Europe that was Dutch owned and we were requied to take two weeks. I don't know of that was a company policy though.
- belter 3y ago
  Sounds like these are recommendations some organizations can use or substitute by better methods of auditing. I would argue that if fraud can be covered by the presence of an individual, the problem is with the audit processes and controls in place. Plus the individual being aware of the requirement could easily circumvent by only stealing every quarter or every month :-) "Required Absences from Sensitive Positions" - https://www.newyorkfed.org/banking/circulars/10923.html https://www.newyorkfed.org/banking/circulars/10923.html
- oblio 3y ago
  It probably wasn't. In many places in Europe it's legally mandated for employees to have 1 big leave per year, at least 2 weeks, so that they can fully unwind. https://www.codulmuncii.ro/titlul_3/capitolul_3_1.html https://www.codulmuncii.ro/titlul_3/capitolul_3_1.html > (5) In cazul in care programarea concediilor se face fractionat, angajatorul este obligat sa stabileasca programarea astfel incat fiecare salariat sa efectueze intr-un an calendaristic cel putin 10 zile lucratoare de concediu neintrerupt. "at least 10 working days of non-interrupted leave" Of course, this is not always enforced, but many countries to have it as part of the labor code.
mrtksn 3y ago
The "mandatory 2 weeks time off at a time in many jurisdictions" statement might not be precise enough or technically accurate description of the legal status. It's more like "everywhere I know it's mandatory to take 2 weeks time off" and the mandate can come from the institution itself, their partners or a regulatory body recommendation or requirement.