Mușat & Asociații este întotdeauna cu un pas înainte în ceea ce privește evoluția cadrului legislativ și a mediului de afaceri, anticipând nevoile clienților și acționând că un deschizător de drumuri în domeniu.

Musat & Asociatii: Methods to Protect Your Company from Financial Fraud

Although current technology provides numerous options to prevent and to indentify economic frauds, corporations should also be aware that data collected may be considered legal proof only if the applicable legislation and the regulation regarding employees’ rights are strictly followed. The “Corporate Fraud: Prevention, Detection and Legal Actions” event, co-organized by Musat & Asociatii and AAM Management Information Consulting, addressed key issues regarding the need of protection against economic, financial and cybercrimes, since corporate fraud is on the rise in the context of economic downturn and organizations may lose up to 5% of their annual revenue to fraud (according to a study released by Association of Certified Fraud Examiners).

IT systems for monitoring e-mail traffic, landline calls logs or transaction logs, represent tools which can provide precious information for initiating and conducting internal and/or external investigation.

“The legal assistance is crucial to prevent and detect corporate fraud. Companies need to correlate the implementation of monitoring equipments and protocols with their internal codes of conduct, in full compliance with the current legal frame work and thus informing employees about the monitoring system, in order to be able to use the proofs collected during in-house investigations”, says Catalin Baiculescu, Co-Managing Partner with Musat & Asociatii.

„The monitoring systems also play a preventive role with regard to leakages of business related information. However, the „weakest link” is always the human factor. Despite having IT control systems in place, there is always the risk for these control systems to be by-passed by the employees. Therefore, even from the recruitment phase, having proper HR screeenings together with a professional forensic investigator will help filtering out the „high risk” profiles. Such HR screenings are recommended, not only during the recruitment phase but also periodically, to re-evaluate the employees, or should sudden changes of behaviour be noticed, or even based on an annonymous tip” adds Mr. Robert Melli, Head of Risk Management Services, CFE (Certified Fraud Examiner), AAM Consulting.

When implementing an internal monitoring system, the companies need to assess the purposes and practical benefits of monitoring, to use the least intrusive methods, to devise a detailed, clearly explained, justified and unequivocal monitoring policy, as part of their internal regulations, and to inform the employees on such policy. Moreover, it is essential to protect the personal data of employees resulting from the monitoring process, by maintaining a small number of monitoring officers and subjecting them to strict confidentiality obligations, underlined Catalin Baiculescu and Head of the firm’s IT, Telecom & Media Department.

On the other hand, when misconduct occurs, the employer shall take into consideration that a disciplinary sanction can be disposed only after conducting a disciplinary investigation, according to the directives available, which are mostly restrictive to the employer in the Romanian legislation.

“If the legal steps are not strictly followed and the company applies a disciplinary sanction, while breaching the legal terms and conditions, the sanction may be easily reversed in court”, explains Ana Maria Placintescu, Partner with Musat & Asociatii and Head of Employment practice of the firm. “It is well known that the disciplinary sanctions, especially the dismissals for misconduct reasons, are often challenged in court. In many situations, even when the employer had strong evidence regarding the disciplinary infringement, the sanctioning decision was reversed because the implemented procedure failed to comply with the legal requirements”, adds Ana Maria Placintescu. Moreover, the disciplinary sanction applied by the employer need to be proportional with the gravity of the infringement perpetrated by the employee, following the legal criteria in order to differentiate the sanctions; otherwise, the court may decide to apply a less severe disciplinary sanction. Should the court rule that the disciplinary dismissal decision was ungrounded or illegal, the financial impact is not to be overlooked, as the employee is entitled to claim past salaries and the other rights he would have benefited of.

„To ensure that all evidence necessary to initiate legal actions are collected within the 30 days timeframe provided by the legislation in force, the investigation needs to start as soon as the misconduct is detected. Should the said employee suspect or know that an investigation is under way with regard to his/her misconduct, there is a high risk for the employee to destroy the evidence- therefore, the sooner the investigation starts, the higher chances we have to collect the necessary evidence and information, and, should it be possible, to stop the fraudulent activity before it is finished (e.g. fraudulent transactions)”, says Robert Melli. On the other hand, „besides the investigation of the existant frauds, an important role is played by prevention. A holistic approach, based on resources and process modelling and optimization, although seemingly complicated, can lead to the safest results on a medium and long term, also from a Revenue Assurance perspective” , stated Cosmin Marin, Solution Delivery Director, AAM Consulting.

Musat & Asociatii gathered an impressive expertise in implementing data collection systems, as well as in white collar crime, including economic espionage and economic, financial and informational fraud. Musat & Asociatii’s capabilities and expertise in IT, Telecom & Media and Labour matters are regularly praised by the reputed international legal guides PLC – Which Lawyer, Chambers & Partners and Legal 500, while Catalin Baiculescu and Ana Maria Placintescu are recommended as experts by these publications in those respective domains.

In addition to the team’s competencies, AAM Consulting brings to the table its comprehensive experience in succesfully providing services such as revenue management, prevention, detection and investigation of corporate fraud cases, HR screening, fraud risk assesment, risk assessment of IT contracts, security assessment, risk management, compliance review, etc.