72% of Banks Say Their Employees Committed Fraud 272
yahoi writes "The financial crisis appears to be exacerbating fraud by bank employees: a new survey found that 72 percent of financial institutions say that in the last 12 months they have experienced a case of data theft by one of their workers. Meanwhile, most banks don't want to talk about the insider threat problem and remain in denial, says a former Wachovia Bank executive who handled insider fraud incidents at the bank and has co-authored a new book called Insidious — How Trusted Employees Steal Millions and Why It's So Hard for Banks to Stop Them that investigates several real-world insider fraud cases at banks." The article dispels one assumption that might commonly be made about such insider fraud: "Interestingly, it's not the stereotypical offshore or outsourced employee who's most risky to their organizations. Nearly 70 percent of financial institutions say their full-time employees are most likely to pose an insider fraud threat..." Technology workers placed third in the roster of the job categories most abused.
That's the real cost of disloyal companys. (Score:5, Informative)
All these companys want you to be totally loyal to the company. The job comes before your life, friends, and everything else. They demand loyality above everything.
And yet... are most companys loyal to the employee? Fuck no! You're 100% replaceable. We don't really need YOU. Get back to work or you're fired. Sick? Come to work anyway! You did such a great job on that project. have some perks! more money? no. you wont get more money.. but look! pizza on fridays! wooo!
Nobody should be suprised that many employees have a crap attitude about their jobs. And will steal any chance they get.
You want real loyality from employees? PAY US MORE. We don't work here for our health or because we like it or for the perks or the lovely 'family oriented' way you do business. We work here because you pay us.
And now with the economy fuckup. The first things to go are perks and pay raises. Yet you still want the same loyality from the employees.
Good luck with that. We're gonna steal anything not bolted down. Get all we can before the company gets rid of us.
Not surprising (Score:3, Informative)
Re:Seems low (Score:3, Informative)
> FDIC insurance
Riiiight. When the government is bankrupt, it _can't_ payout. Least in the old days you had _some_ assets to cover your debts, and one just couldn't "print" more pseudo-assets. Regardless, the problem is borrowing more then you can cover.
Re:Banks apparently have few with tech. knowledge. (Score:1, Informative)
Re:The other 28% must be small banks or... (Score:5, Informative)
Well, I said IANA statistician. Can you show your work? It does make sense that some banks would be able to hire 100 employees under those circumstances and not bump into a criminal; but the exact equation isn't something with which I'm familiar.
If each employee has a 1% probability of being a criminal, the probability of each employee not being a criminal is 99%. If you pick two random employees, 99% of the time the first one will not be a criminal, and 99% of those times the second one won't be either: the probability is 99% * 99%, or 99% to the second power.
Thus, the probability of 100 employees not being criminals is 99% to the 100th power (0.99 ^ 100 = approximately 0.366 or 36.6%).
All fractional reserve banking is fraud (Score:4, Informative)
This headline is missing the point that all banks commit theft, that's what keeps them in business and pays for their excessive bonuses.
Anyone that thinks otherwise doesn't understand fractional reserve banking.
Until we have money that is based on some real commodity money has no inherent value, it's just a points system ungrounded in reality.
Re:Outsourcing [Re:Suprise! NOT!] (Score:3, Informative)
I imagine that outsourcing to 3rd-world countries increases the risk because the payoff is much higher relative to the local currency (more purchasing power) and it's much more difficult to prosecute across the ocean.
Apparently you do imagine that quite strongly since the fine article and even the fine summary here on slashdot said:
The article dispels one assumption that might commonly be made about such insider fraud: "Interestingly, it's not the stereotypical offshore or outsourced employee who's most risky to their organizations..."
Re:Seems low (Score:3, Informative)
You ever tried covering up a rolex with a sofa and two chairs?
Sure, it's easy to do but it's damn hard to do discreetly.
Re:Seems low (Score:1, Informative)
Fractional reserve banking IS fraud!
No, it isn't, despite what Ron Paul, Lyndon LaRouche and other kooks will tell you.
Every penny in fractional reserve banking is as real as any other.
I have $100 cash. What is my net worth? $100. How much cash do I have? $100.
My friend has no cash or assets. His net worth is $0.
I deposit my $100 into the bank. I now have $0 in cash, but my net worth is still $100, because the bank owes me $100.
My friend wants to borrow money.
My friend goes to the bank and borrows $90. He now has $90 cash, but his net worth is still $0, because he owes $90 to the bank.
(The bank kept $10 in the vault as part of the fractional reserve)
Fractional reserve banking DOES NOT CREATE OR DESTROY MONEY OR ASSETS.
Re:Seems low (Score:2, Informative)
You are not describing the system as it exists.
The bank has $1. They write a loan to your friend for $100. They now declare that they have $101 dollars of assets, and represent this balance sheet as collateral on further loans, and as the basis for other financial instruments they trade. $100 dollars were 'conjured' into existence.
In any closed system, this is unsustainable. It is the functional equivalent of Ponzi and check kiting - on the macro-economic scale.
Check out "Money is Debt" - for the Schoolhouse Rock version:
http://vodpod.com/watch/1544492-money-as-debt [vodpod.com]
"I am afraid that the ordinary citizen will not like to be told that banks can and do create money ...And they who control the credit of the nation direct the policy of Governments and hold in the hollow of their hands the destiny of the people"
-- Reginald McKenna, past Chairman of the Board, Midlands Bank of England
Re:Seems low (Score:4, Informative)
No. The FDIC fund is not funded by the government at large. It is funded by the member banks. While it is possible that a loan will need to be made by the government, as of right now there are no plans to do so. Instead, the FDIC fund is stepping up efforts to collect premiums due from member banks, and looking at assessing a special premium to cover a potential projected shortfall.
And that relates to the US situation in what way?