Solving Modern Crime in Financial Markets: Analytics and Case Studies

This comprehensive source of information about financial fraud delivers a mature approach to fraud detection and prevention. It brings together all important aspect of analytics used in investigating modern crime in financial markets and uses R for its statistical examples. It focuses on crime in financial markets as opposed to the financial industry, and it highlights technical aspects of crime detection and prevention as opposed to their qualitative aspects. For those with strong analytic skills, this book unleashes the usefulness of powerful predictive and prescriptive analytics in predicting and preventing modern crime in financial markets.

1. Modern Financial Crime

• Innovation and Crime
• High Frequency Trading
• Commodities Markets
• Social Networks and Financial Crime
• Cryptocurrencies: a New Monetary Vehicle
• Assessment of the Link between the Betting Industry and Financial Crime

2. Forensic Statistics as an Investigation Tool (Theoretical Background)

• Truth: a Game of Probabilities
• Statistical Distributions
• Forecasting Distributions
• Genetic Algorithms
• Statistical Hypothesis Tests
• Non-parametric Techniques
• Fuzzy Methods
• Clustering Techniques
• Support Vector Machine
• Assessing the Accuracy of a Fraud Detection Mode
• Benford's Law

3. Investigation of Crime in Financial Markets (Empirical Studies with Applications in R)

• Structural Changes in Time Series
• Exploring Unstructured Data
• Reading the Balance Sheet of Financial Firms
• Fraud on the Market Theory
• Efficient Market Hypothesis Testing
• Market Prices and Trading Activity
• Order Book analysis
• Event Study

4. Case Studies (Applications in R)

• LIBOR Manipulation
• EURIBOR Manipulation
• The Madoff Case
• Enron - Worldcom
• Rating Agencies and Crises
• The FX Fixing Fix
• The Case of Greenhouse Gas Emissions Allowances Market

5. Preventing Crime and Preserving Markets’ Integrity

• Stronger Financial Regulation Pros and Cons?
• Efficient Frameworks for Financial Crime Surveillance
• Joint Structures for Tackling Financial Offense: Criminal Investigators and Market Regulators