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From Information to Intelligence:

The Power of Social Media to Manage

Financial Risk

May 23, 2013

Scott SchneidermanPrincipal

Innovative Analytic SolutionsAveshka, Inc.

Introduction

“One emerging area of concern… is the use of social media to support fraudulent schemes

bringing what are called boiler room scams into chat rooms, Facebook pages, Twitter feeds, and

your inbox.”

SEC Chairman Elisse WalterApril 1 2013

Financial Risks Abound

Enron

Adelphia

Tyco

QWest

Bernard Madoff

Societe Generale

MF Global

SAC Capital

JP Morgan Leak

2013

2001

Rogue Trading

Ponzi Schemes

Insider Trading

Leaks or Loss of IP

Accounting Fraud

Pump-&-Dump Schemes

Identity Theft

The financial risk environment has

become more varied and complex

over the past decade.

A Network View of Financial RiskWe use relationship mapping and cognitive modeling to

visualize complex event relationships and identify previously

unknown or hidden events, entities, and interactions.

Fraud

Netw

ork

Network Complexity Can VaryFinancial risks exist across a spectrum of network complexity.

The more complex the network, the greater the opportunities for

detection and interdiction.

Lon

ewo

lf

Rogue Trading

Leaks or Loss of IP

Pump-&-Dump Schemes

Insider Trading

Accounting Fraud

Ponzi Schemes

Social Network and OS Indicators

• Frauds arise from business and social networks

• Social Media and OS indicate potential relationships

Traditional Social

Media Sources

Social Media and OS CollectionNew technologies and techniques allows an analyst to query data from

multiple databases rapidly and comprehensively to provide information

awareness and reveal hidden relationships

Common Indicators

Fraud Network

“Trusted” Relations

Off-the-Books

Enablers

Front Companies

Serial Fraudsters

Off-the-Books

Beneficiaries

Fraud networks have common risk factors that can inform due diligence

assessments or investigations.

Aveshka conducted a 1-week study of the company to find relationships for further investigation

Swiss investment bank provides partial or incomplete names of two companies and two individuals

Aveshka hired to investigate one of the largest bankruptcies in Swiss history

Swiss Case Study

Aveshka-provided intelligence is supporting the recovery of > $10 million

Complex Social Network Analysis

10

Travel Patterns

Risk by Company

From Information to Intelligence

13

In summary, social media monitoring and analysis can help organizations manage financial risk leading to:

Informed Investment Decisions

Protection of IP

Time Saving Through

Automation

Proactive Brand

Management

o | 571.814.5745

e | kcooper@aveshka.com

o | 571.814.5737

e | sschneiderman@aveshka.com

SCOTT SCHNEIDERMAN

PRINCIPAL

INNOVATIVE ANALYTIC SOLUTIONS

KELLI COOPER

INTELLIGENCE ANALYST

INNOVATIVE ANALYTIC SOLUTIONS