ACFCS Financial Crime Specialist Sample Questions:

1. How are trade price manipulation schemes used to launder criminal proceeds?

A) By serving as a balancing mechanismtosettle payments between unregistered hawalas and other informal value transfer systems
B) By transferring value between related criminal enterprises through the fraudulent misrepresentation of the value of exported commodities
C) By transferring funds offshore through invoicing schemes for non-existent good and services
D) By obscuring the money trail through offshore bond swaps and fraudulent letters of credit

2. As part of a risk assessment of its investment advisory services, a financial institution discovers that some of its clients engage in high-frequency trading strategies that may pose market manipulation risks. What is the most appropriate action for the institution to take?

A) Immediately terminate all client relationships involved in high-frequency trading.
B) Implement enhanced monitoring and surveillance measures for clients engaged in high-frequency trading.
C) Ignore the issue as long as the clients' trading activities comply with regulatory requirements.
D) Seek legal advice before taking any action regarding clients engaged in high-frequency trading.

3. An investigator was retained by Corporation A to locale and recover assets in a significant civil Fraud matter.
During this engagement the investigator uncovers significant assets and relers them to the legal team for seizure.
The investigator is later engaged by Corporation B to locate and recover assets in a separate civil fraud matter. During the asset identification process the investigator learns that Corporation B and Corporation A have competing interests and are both pursuing assets from the same subject.
Since only a few weeks have elapsed the investigator uses the information developed for Corporation A and merely updates the information. He submits an invoice to Corporation B for the number of hours it would have taken to properly complete the project if there were no pre-existing work that had already been completed.
Were the investigator's actions appropriate?

A) Yes, Ihe investigator was prudent to capitalize on his prior work effort and share the information
B) No, it is appropriate lo invoice for Ihe amount of work required but sharing client information is inappropriate
C) Yes, invoicing another client for the amount of work it would have taken is appropriate
D) No, the investigator should not double invoice and should disclose lo Corporation B his potential conflict of interest with Corporation A

4. You are a fraud investigator lor a U S securities firm. You are currently investigating potential market manipulation involving stock in a company that was created in the Channel Islands.
One of your brokers has 500,000 shares of this stock in several of his customer's accounts This stock had no trading activity for the past several years In Ihe past 30days he has been selling stock in 5,000-share increments every day from his customer accounts.
Upon review of your firm's books you notice that none of your other customers have bought this stock. Your firm has filed a Suspicious Activity Report (SAR) on this activity. Since this activity is putting your firm at risk you decide to contact your regulator and law enforcement to further the investigation Which items do these agencies have access to that you would not? Choose 2 answers

A) The names of Ihe beneficial owners of the company
B) SARs filed at other U S securities firms
C) The names of the individuals purchasing Ihe stock
D) Emails sent by your broker regarding Ihe selling activity

5. A publicly traded corporation set up a shell company in an offshore jurisdiction for the purpose of making payments to government officials to win business The corporation funnels the proceeds through a London bank with a robust compliance program Once the scheme becomes public which is LEAST likely to occur?

A) The corporation will suffer damage to its reputation and diminished share price
B) The corporation will be subject to sanctions by the offshore jurisdiction
C) The bank will be held liable for laundering Ihe proceeds of corruption
D) The bank will be subject to investigation by U.K. authorities

Solutions: