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Solving Modern Crime in Financial Markets - 1st Edition - ISBN: 9780128044940, 9780128045329

Solving Modern Crime in Financial Markets

1st Edition

Analytics and Case Studies

Author: Marius-Cristian Frunza
Hardcover ISBN: 9780128044940
eBook ISBN: 9780128045329
Imprint: Academic Press
Published Date: 1st December 2015
Page Count: 526
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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.

Key Features

  • Interviews and case studies provide context and depth to examples
  • Case studies use R, the powerful statistical freeware tool
  • Useful in classroom and professional contexts


Upper-division undergraduates, graduate students, and professionals in finance, accounting, and law who are working with forensic data and analytics to solve financial crimes

Table of Contents

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


No. of pages:
© Academic Press 2016
1st December 2015
Academic Press
Hardcover ISBN:
eBook ISBN:

About the Author

Marius-Cristian Frunza

Dr. Marius-Cristian Frunza's consulting work with investment banks and asset managers allowed him to specialize in risk management, derivative pricing and hedging. His research activity encompasses topics around environmental finance like forestry, energy, and weather derivatives. He graduated from the Ecole Polytechnique in Paris and holds a PhD in mathematics from the Sorbonne university. He is also a partner in Schwarztal Kapital, an independent advisory and investment firm in environmental finance.

Affiliations and Expertise

Schwarztal Kapital, Paris, France


""Frunza does an excellent job of presenting theoretical, applied and case study discussions. Detailed and technical concepts are explained in a clear manner. The book is very timely especially with respect to the sports betting market and cryptocurrencies and FX manipulation."  --Bonnie Buchanan, Albers School of Business, Seattle University

 "This text tackles head on how crimes committed within financial markets have a reputation for being complex and sophisticated and where ‘crime scenes’ are widely regarded as helping to conceal these already secretive activities. In focusing ‘only’ on financial crimes committed in financial markets the author has given himself a monumental task. The inherent ambition of this task is also readily apparent from his willingness to address the challenges of understanding financial crimes through the technicalities behind their commission. This makes this potentially a contribution of high importance. Many will agree with the author’s premise on the essence of innovation in paradigms of surveillance and discovery and then response, and this text recognises the practical technical challenges entailed in understanding how these activities are actually committed. This text provides an important link for making value judgements on propriety, and thus qualitative and normative judgements on whether they are properly regarded as crimes and enforced as such, a pre-requisite for which is understanding how they are actually committed and where they can be found. Focusing on the technicalities of financial crimes in such a comprehensive way makes this text distinctive. In doing so it not only provides an extremely helpful guide for those who are concerned about financial crime, and concerned to ensure they understand it, but actually in doing so it highlights the sheer enormity of this task." --Sarah Wilson, York Law School, University of York

Ratings and Reviews