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jerryking : financial_penalties   3

New Ontario initiative targets complex, white-collar crimes
AUGUST 20, 2019 | The Globe and Mail | GREG MCARTHUR.

The Ontario government has quietly launched an initiative intended to solve a problem that has vexed Canadian law enforcement: the successful prosecution of complex, white-collar crimes.

With little fanfare, the province has created what it is calling the Serious Fraud Office (SFO), with a structure that is novel to Canada: teaming up investigators and prosecutors and dedicating them to financial crimes that are too sprawling for any one municipal police force to handle.....Ontario’s office, however, will investigate an array of financial crimes, not just money laundering but large-scale fraud and corruption. It was created to fix long-standing issues with how the government combats such crimes, the two officials in charge of the initiative said in an interview......One of the primary goals is to bridge gaps between investigators and prosecutors......to prevent cases from languishing and forcing judges to throw them out because of unconstitutional court delays. Unlike a traditional police investigation, the SFO’s structure means prosecutors will be heavily involved from the outset of a case........The SFO is also designed to thwart an issue common to most police departments: the frequent shifting of resources away from fraud units whenever police are confronted with a more pressing public-safety issue, such as a threat of terrorism......“White-collar crime investigations are both complex and lengthy. Specialization and long-term experience of both prosecutors and the investigators will be critical to success.”
corruption  financial_crimes  financial_penalties  fraud  fraud_detection  groundbreaking  large-scale  law_enforcement  legal_strategies  money_laundering  Ontario  prosecutors  Queens_Park  securities_enforcement  securities_industry  white-collar  white-collar_crime 
august 2019 by jerryking
Learning to Love Volatility: Nassim Nicholas Taleb on the Antifragile
November 16, 2012 | WSJ | Nassim Nicholas Taleb

In a world that constantly throws big, unexpected events our way, we must learn to benefit from disorder, writes Nassim Nicholas Taleb.

Some made the mistake of thinking that I hoped to see us develop better methods for predicting black swans. Others asked if we should just give up and throw our hands in the air: If we could not measure the risks of potential blowups, what were we to do? The answer is simple: We should try to create institutions that won't fall apart when we encounter black swans—or that might even gain from these unexpected events....To deal with black swans, we instead need things that gain from volatility, variability, stress and disorder. My (admittedly inelegant) term for this crucial quality is "antifragile." The only existing expression remotely close to the concept of antifragility is what we derivatives traders call "long gamma," to describe financial packages that benefit from market volatility. Crucially, both fragility and antifragility are measurable.

As a practical matter, emphasizing antifragility means that our private and public sectors should be able to thrive and improve in the face of disorder. By grasping the mechanisms of antifragility, we can make better decisions without the illusion of being able to predict the next big thing. We can navigate situations in which the unknown predominates and our understanding is limited.

Herewith are five policy rules that can help us to establish antifragility as a principle of our socioeconomic life.

Rule 1:Think of the economy as being more like a cat than a washing machine.

We are victims of the post-Enlightenment view that the world functions like a sophisticated machine, to be understood like a textbook engineering problem and run by wonks. In other words, like a home appliance, not like the human body. If this were so, our institutions would have no self-healing properties and would need someone to run and micromanage them, to protect their safety, because they cannot survive on their own.

By contrast, natural or organic systems are antifragile: They need some dose of disorder in order to develop. Deprive your bones of stress and they become brittle. This denial of the antifragility of living or complex systems is the costliest mistake that we have made in modern times.

Rule 2:Favor businesses that benefit from their own mistakes,not those whose mistakes percolate into the system.

Some businesses and political systems respond to stress better than others. The airline industry is set up in such a way as to make travel safer after every plane crash.

Rule 3:Small is beautiful, but it is also efficient.

Experts in business and government are always talking about economies of scale. They say that increasing the size of projects and institutions brings costs savings. But the "efficient," when too large, isn't so efficient. Size produces visible benefits but also hidden risks; it increases exposure to the probability of large losses.
Rule 4:Trial and error beats academic knowledge.
Rule 5:Decision makers must have skin in the game.

In the business world, the solution is simple: Bonuses that go to managers whose firms subsequently fail should be clawed back, and there should be additional financial penalties for those who hide risks under the rug. This has an excellent precedent in the practices of the ancients. The Romans forced engineers to sleep under a bridge once it was completed (jk: personal risk and skin in the game).
Nassim_Taleb  resilience  black_swan  volatility  turmoil  brittle  antifragility  personal_risk  trial_&_error  unknowns  size  unexpected  economies_of_scale  risks  hidden  compounded  disorder  latent  financial_penalties  Romans  skin_in_the_game  deprivations  penalties  stressful  variability 
november 2012 by jerryking
What Any Goldman Settlement Might Entail - DealBook/White Collar Watch Blog - NYTimes.com
May 6, 2010 | NYT | by Peter J. Henning who's working on a
book, “The Prosecution and Defense of Public Corruption: The Law &
Legal Strategies,” by Oxford Univ. Press. What might it take for GS to
resolve its various lawsuits & inquiries? Threats? 3-fold: (1) SEC's
lawsuit; (2) a slew of private shareholder suits that largely piggyback
the S.E.C. claims; (3) a DoJ investigation. The SEC’s fraud case
presents the most immediate threat to GS, DoJ investigation could have
the greatest impact if it develops into a full-blown threat of
prosecution, while the private suits are of less importance as they pose
little if any threat to the GS’s continuing operations. For the SEC:
($=monetary penalties), appt. of an outside monitor to oversee GS’s
compliance with the terms of the settlement, require GS to appoint a
different person as chair; For the DoJ --difficult for GS to negotiate
some type of resolution; For Private Litigants there's whether the GS
board breached its fiduciary duty.
anticipating  books  corruption  Department_of_Justice  financial_penalties  Goldman_Sachs  legal  legal_strategies  SEC  think_threes  white-collar  white-collar_crime 
may 2010 by jerryking

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