Financial Fraud Awareness

What is a Ponzi Scheme?

• A Ponzi Scheme is a fraudulent investment scheme where returns are paid to earlier investors using the capital of newer investors rather than from profit earned by the operation.

• A Ponzi Scheme is a government-regulated financial program

• A Ponzi Scheme is a legitimate investment opportunity

• A Ponzi Scheme is a type of savings account

Define Insider Trading.

• Trading of a public company's stock by individuals with public, non-material information about the stock.

• Illegal trading of a public company's stock by individuals with non-public, material information about the stock.

• Trading of a private company's stock by individuals with non-public, material information about the stock.

• Legal trading of a public company's stock by individuals with non-public, material information about the stock.

Explain the concept of Money Laundering.

• Money laundering is a legal process of transferring funds between bank accounts.

• Money laundering involves making illegally obtained money appear legal by passing it through legitimate financial systems.

• Money laundering is a type of investment strategy to grow wealth quickly.

• Money laundering is a term used for cleaning dirty clothes with money.

How does Credit Card Fraud typically occur?

• Credit card companies intentionally allow fraudulent charges

• Credit card fraud only happens when the physical card is stolen

• Thief gains access to credit card information and makes unauthorized transactions.

• Credit card fraud is a victimless crime

What is Embezzlement and how does it differ from other forms of financial fraud?

• Embezzlement is always prosecuted as a misdemeanor

• Embezzlement is a victimless crime

• Embezzlement is legal in certain circumstances

• Embezzlement involves the misappropriation of assets entrusted to the perpetrator for personal gain, while other forms of financial fraud may involve deception, manipulation, or falsification of financial records.

Who was the infamous mastermind behind the largest Ponzi scheme in history?

• Gordon Gekko

• Jordan Belfort

• Bernie Madoff

• Charles Ponzi

What are some common red flags that may indicate insider trading?

• Consistent losses in trading, sudden increase in company stock price, lack of communication from executives

• Sudden changes in trading volume, significant stock price changes before announcements, insider trading by executives or employees, consistent profitable trades

• Decrease in employee morale, increase in company revenue, decrease in company expenses

• Public announcement of upcoming changes, decrease in trading volume, increase in employee turnover

What are the key stages involved in the process of money laundering?

• Mixing, Baking, Serving

• Placement, Layering, Integration

• Hiding, Spending, Saving

• Washing, Drying, Folding

What are some preventive measures individuals can take to protect themselves from credit card fraud?

• Click on suspicious links in emails

• Regularly monitor credit card statements, set up transaction alerts, be cautious when sharing information online, use secure websites, keep information secure.

• Share credit card details on social media

• Keep credit card information written down in an easily accessible place

Can embezzlement occur in both small and large organizations? Explain.

• Only in non-profit organizations

• No

• Rarely

• Yes