In economics and finance, arbitrage is the practice of taking advantage of a difference in prices in two or more markets – striking a combination of matching deals to capitalize on the difference, the profit being the difference between the market prices at which the unit is traded. When used by academics, an arbitrage is a transaction that involves no negative cash flow at any probabilistic or temporal state and a positive cash flow in at least one state; in simple terms, it is the possibility of a risk-free profit after transaction costs. For example, an arbitrage opportunity is present when there is the possibility to instantaneously buy something for a low price and sell it for a higher price.
Money laundering is the process of illegally concealing the origin of money obtained from illicit activities such as drug trafficking, underground sex work, terrorism, corruption, embezzlement, and gambling, and converting the funds into a seemingly legitimate source, usually through a front organization.
The Goldman Sachs Group, Inc. is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered in Lower Manhattan in New York City, with regional headquarters in many international financial centers. Goldman Sachs is the second-largest investment bank in the world by revenue and is ranked 55th on the Fortune 500 list of the largest United States corporations by total revenue. In the Forbes Global 2000 of 2024, Goldman Sachs ranked 23rd. It is considered a systemically important financial institution by the Financial Stability Board.
Deutsche Bank AG is a German multinational investment bank and financial services company headquartered in Frankfurt, Germany, and dual-listed on the Frankfurt Stock Exchange and the New York Stock Exchange.
Proprietary trading occurs when a trader trades stocks, bonds, currencies, commodities, their derivatives, or other financial instruments with the firm's own money to make a profit for itself. Proprietary trading can create potential conflicts of interest such as insider trading and front running.
A dual-listed company or DLC is a corporate structure in which two corporations function as a single operating business through a legal equalization agreement, but retain separate legal identities and stock exchange listings. Virtually all DLCs are cross-border, and have tax and other advantages for the corporations and their stockholders.
Tax evasion is an illegal attempt to defeat the imposition of taxes by individuals, corporations, trusts, and others. Tax evasion often entails the deliberate misrepresentation of the taxpayer's affairs to the tax authorities to reduce the taxpayer's tax liability, and it includes dishonest tax reporting, declaring less income, profits or gains than the amounts actually earned, overstating deductions, bribing authorities and hiding money in secret locations.
Freshfields LLP is a British multinational law firm headquartered in London, England, and a member of the so-called "Magic Circle". The firm has 28 offices in 17 jurisdictions across Asia, Europe, the Middle East and North America. It advises national and multinational corporations, financial institutions and governments.
Dividend stripping is the practice of buying shares a short period before a dividend is declared, called cum-dividend, and then selling them when they go ex-dividend, when the previous owner is entitled to the dividend. On the day the company trades ex-dividend, theoretically the share price drops by the amount of the dividend.
Jérôme Kerviel is a French rogue trader who was convicted and imprisoned in the 2008 Société Générale trading loss for breach of trust, forgery and unauthorized use of the bank's computers, resulting in losses valued at €4.9 billion.
In January 2008, the bank Société Générale lost approximately €4.9 billion closing out positions over three days of trading beginning January 21, 2008, a period in which the market was experiencing a large drop in equity indices. The bank states these positions were fraudulent transactions created by Jérôme Kerviel, a trader with the company. The police stated they lacked evidence to charge him with fraud and charged him with breach of trust and illegally accessing computers. Kerviel states his actions were known to his superiors and that the losses were caused by panic selling by the bank. Société Générale's own wrongs were later established by a French jurisdiction, which led the Cour de cassation to cancel the €4.9 billion sanction on Kerviel.
Hamburg Commercial Bank is a commercial bank in northern Europe with headquarters in Hamburg as well as Kiel, Germany. It is active in corporate and private banking. Considered to be the world’s largest provider of maritime finance, its main focus is on shipping, transportation, real estate and renewable energy. The bank is one of the pioneers in the pan-European project financing of renewable energies and is also involved in the expansion of digital infrastructure.
Frank DiPascali Jr. was an American fraudster and financier who was a key lieutenant of Bernie Madoff for three decades. He referred to himself as the company's "director of options trading" and as "chief financial officer". For a number of years, he played a key part in the daily operation of the Madoff investment scandal, later recounting how he helped manipulate billions of dollars in account statements so clients would believe that they were creating wealth for them.
The Madoff investment scandal was a major case of stock and securities fraud discovered in late 2008. In December of that year, Bernie Madoff, the former Nasdaq chairman and founder of the Wall Street firm Bernard L. Madoff Investment Securities LLC, admitted that the wealth management arm of his business was an elaborate multi-billion-dollar Ponzi scheme.
The Bundesverband deutscher Banken is the representative body of profit-oriented banks in Germany and a key lobby group for Germany's financial sector.
The 2011 UBS rogue trader scandal caused a loss of over US$2 billion at Swiss bank UBS, as a result of unauthorized trading performed by Kweku Adoboli, a director of the bank's Global Synthetic Equities Trading team in London in early September 2011.
Kweku Adoboli is a Ghanaian investment manager and former stock trader. He was convicted of illegally trading away US$2 billion as a trader for Swiss investment bank UBS. While at the bank he primarily worked on UBS' Global Synthetic Equities Trading team in London, where he engaged in what would later be known as the 2011 UBS rogue trader scandal. After serving a prison sentence, he lost several appeals against the UK Home Office decision to deport him to Ghana.
Sanjay Shah is a Dubai-based British trader currently being accused of tax fraud. He founded Solo Capital, a hedge fund firm in Britain which closed in 2016, and the NGO Autism Rocks, which closed in 2020.
Solo Capital was a British hedge fund created by the trader Sanjay Shah in 2009. It was closed in 2015 while it was being investigated by Danish tax authorities for tax fraud.
