What’s Been Cooking in the CRX? Internal Complaints; Mental Health; Expert Networks

Published On January 28, 2019

Welcome to the Conduct Risk Exchange.

Behavox offers its clients a unique Conduct Risk Exchange (CRX) which is an online library of scenarios, reports and applications, built by our CRX team, in close collaboration with our clients. The scenarios in this extensive and growing repository are available to all clients and are updated regularly. They are entirely anonymous.

On a quarterly basis, Radar will explore some of the most innovative and effective CRX scenarios, that have been deployed in real data sets and are giving clients new insights and signals.

Internal complaints scenario

This scenario highlights divisiveness within an organization and discord in relation to policy, culture or management. It can also reveal situations and groups that have become toxic and need to be tackled immediately.

The scenario uses three previous incidents as models for the type of situation that requires identification.

Disruptive early exits for the likes of J.Kevin Turner at Citadel Securities, Matthew Westerman at HSBC, or Lauren Bonner’s resignation and allegations at Point72, are all events that could divide an organization, significantly damaging P&L, morale, and talent retention in the short and long term.

The scenario allows the firm to highlight individuals who are deeply disturbed by external events, inflammatory press, and management power struggles.

Better that management know about these things in advance as opposed to reading them firsthand on Bloomberg or Glassdoor.

Be proactive rather than reactive.

Mental health scenario

Mental health in the workplace is not the taboo subject it once was, and is an increasingly important factor in personnel decisions such as recruiting.

Behavox worked with banking clients to develop a scenario that tracks cases where an individual exhibits significant behavioral change, suggesting they are struggling, becoming depressed, not being supported by their usual network in the workplace.

In extreme cases, individuals have suffered breakdowns or gone as far as suicide.

Here, we can see the evolution of an individual’s relationship map, where the cluster of names has dwindled to just a few people, communications are going unanswered, and they are asking for help

Expert networks scenario

The use of expert networks to get an edge took centre stage in relation to the insider trading scandal that affected hedge fund SAC Capital and one of its portfolio managers, Mathew Martoma.

He is now well quoted as deliberately avoiding any monitored communication channel when conducting business with expert networks that were potential sources of material non-public information.

The above scenario looks for unusual relationships in regard to the business; perhaps frequent communications outside of office hours with a low-ranking official at a potential client. It is also scanning for documents, and the signs of when communications will be moved out of the monitored space.

Behavox runs regular scenario workshops with its existing clients where they get to collaborate and compare notes on hit rates, success and trends in scenario adoption as well as specifying new market practice that requires new scenarios to be built with the Behavox Scenario Factory.

If you have more interest in this, email Ross Aubrey: [email protected].