Dumpster, Inc. is a financial consulting company that, for a fee, advises clients how to manage and invest their money. Dumpster operates in the fictitious state of New Manitoba and has more than 30 employees and more than 1,000 clients. Last year, the company grossed approximately $3.2 in revenue and its owners netted about $500,000 in profit after paying salaries and expenses.
In January of this year, an internal audit revealed that at least three of Dumpster’s employees were intentionally advising clients to purchase small capitalization stock that the employees held in order to drive up its value. Moreover, the same internal investigation showed two instances of employees embezzling client money and using complex spreadsheets and explanations to hide the embezzlement from the client.
You have been asked to come in an establish a risk assessment and mitigation strategy for Dumpster in order to remedy whatever problems have occurred until now and to try to prevent damage to the company going forward.
Please prepare a preliminary report discussing the following:
1. The role that a risk assessment analysis would have in helping to shape a compliance program within Dumpster that could help shield the company from corporate criminal liability.
2. Discuss the ways in which the risk assessment and compliance strategies might treat different levels of employees differently.
3. Discuss some features that a risk mitigation plan might entail for a company like Dumpster.
4. Discuss the risks that Dumpster could face as a result of some of the above-referenced actions of its employees.
5. Briefly describe the steps that would would recommend for conducting the risk assessment.
