"There are risks and costs to any program of action. But they are far less than the long-range risks and costs of comfortable inaction."
John Fitzgerald Kennedy
Although Luxembourg is a highly regulated and politically stable country, fraudsters are usually where you least expect them. At a time when fraud, corporate responsibility regulations and deterrent measures are being reinforced, fraud can have a dramatic impact on businesses. It can damage business reputation; result in high penalties, a suspension of the right to do business, private law suits and disruptions of business.
When financial crime of fraud occurs in companies, those charged with governance are faced with issues which differ from those they are used to handle.
Fraud - along with other financial, non-financial and regulatory irregularities - is one of the biggest and most damaging risks businesses face. The headlines are full of organisations both in the private and public sectors affected by fraud, irregularity or other wrong - doing - either as victim or accused. The impact can be enormous. Each economic crime investigation is different, depending on the nature of the problem. Our detection and investigation specialists work with our experts in forensic technology solutions, combining extensive practical experience, formal training and a wide range of tools and techniques to detect and investigate fraud.
With more than 90% of business records globally created and stored electronically, the forensic acquisition and analysis of electronic data has become a fundamental process in virtually all corporate enquiries. Electronically-stored information often grows faster than an organisation’s ability to manage it. IT systems are designed for normal business needs; they are not designed to respond to critical incidents that create a sudden need for that data to be preserved, analysed and produced. Having the most cutting-edge tools and technology, our Forensic Technology Solutions (FTS) team, which is part of the Forensic team, offers a highly professional approach to electronic data retrieval. Our forensic tools have been utilized in numerous corporate reviews requiring electronic disclosure and advanced financial data analytics. Our Forensics technology teams can help you manage vast amounts of electronic data and navigate the legal and business processes demanded by critical events.
Financial Crime is an increasing concern for all financial institutions, which is developing together rapidly and equally together with technology. Financial crime affect largest global organisations but also the smallest companies and partnerships.
No business is immune to corruption - deliberate or unintentional. Senior executives may be genuinely unaware of any wrong-doing, but the public is unlikely to accept ignorance as an excuse. The media coverage of even a single incident of alleged corruption can irreparably damage a company’s reputation and finances, threatening its stability and competitive position. It is truly global and the costs keep rising. As societies become less tolerant of unethical behaviour, businesses need to make sure they are building and maintaining public trust, so they can protect their assets, reputation, brands, market share, and business relationships. We can help your organisation manage your crime risks before problems happen, by eliminating and mitigating threats, and analysing, investigating and improving your control environments. Our global reach and dedicated local teams allow us to design a solution to meet your unique challenges.
Fraud incidents can severely hit your organisation and the first your organisation and the first days after discovering a fraud are the most important period to decide on the right steps and to take right decisions. Besides the ultimate need to rapidly understand what has happened and to get the full picture of the crime, it is indispensable for any organisation to keep control over the actions and communication around the case. Various stakeholders groups around the company, like shareholders, clients, creditors, employees, etc., will have to be managed in such a situation. What’s more, various external parties like lawyers, auditors, public prosecutors, police, the regulator and last but not least the press or other media will also be demanding information and professional cooperation. An inappropriate management of these stakeholders groups may result in severe reputational risk and digressing markets and the resulting damage may easily out weight the financial losses of the fraud.
Internal alert arrangements ("whistleblowing") allow employees to raise reasonable concerns about actual or potential breaches of laws, policies or ethical standards. It is required under several laws and regulations, including for instance CSSF 12/552, and it is also the subject of the EU Directive 2019/1937.
Apart from regulatory requirements, whistleblowing systems are an important part of a compliance system and an effective speak-up culture. The proper design and communication linked to whistleblowing systems are crucial to ensure proper handling of reports, prevent abuse, spot and mitigate wrongdoing as soon as possible.
Partner, Forensic Services and Financial Crime Leader, PwC Luxembourg
Tel: +352 49 48 48 4153