Fraud Shuts Down Respected Stock Brokerage Firm


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R and L Investments, a stock brokerage firm situated in Mandaluyong City, stopped all trading operations on November 4, 2019 following the revelation they had been defrauded for hundreds of millions of pesos. The mastermind of the long-running scam was a long-time employee, who single-handedly shut down the 50-year-old company with his scheme. 

A Fortune Lost

Long-time R and L Investments settlement clerk Marlo Moron supposedly began taking small amounts from his employer’s stock inventory as far back as 2011. Over the years, Moron started increasing the amounts he was taking from the company. The scam was feasible because Moron was also in charge of putting together the stock position reports the company owners received every day.

According to his confession, Moron would transfer the shares he stole to a separate account. Over the years, Moron stole almost all of R and L Investments’ stock inventory, which was worth P765 million at the end of 2018. Moron spent the money he had acquired through legitimate transactions, ensuring that recovery efforts will be almost impossible to enforce.

Discovering the Crime

The scam began to unravel a few days before November 1, when other employees of the firm took note they were missing P3 million in stocks when the trading day had ended. Over the next few hours, the firm’s brokers tried to make up the missing inventory, borrowing shares.

However, a more detailed analysis of their situation revealed they had lost nearly all of their stock inventory. The disastrous loss forced the company to shut down all trading operations for the foreseeable future, while R and L Investments’ owners vowed to sell personal property, such as homes and real estate, to address client obligations.

Gambling Addiction and Fraud

According to Moron, his casino addiction led to him steal more and more from his employer.

Casino addiction, also known as compulsive gambling or problem gambling, causes people to obsess over their losses and let it consume their time and money. Problem gamblers don’t care about how their addiction negatively impacts their life, particularly their finances.

Without the help of a pre-employment integrity testing company, your business could unknowingly hire an applicant who already has a gambling addiction or would most likely develop one. Under the influence of gambling addiction, an employee will spend more and more money to fuel their bets. Because the odds of winning casino games are decidedly against the player, a compulsive gambler will continue hemorrhaging money. Without additional sources of revenue, they may use illegal means to get more money.

Aside from the possibility of your employee defrauding you, pathological gamblers are absent a lot or use company time and devices to aid their addiction. This could be as simple as using company computers to place bets or as serious as using company credit cards on gambling. These activities lead to decreased productivity and profits on your end.

Without proper screening procedures, the potential problem gamblers sow in your company are ruinous to your business. Remain vigilant and employ pre-emptive measures, and your company can avoid the debacle that shut down R and L Investments. excels in protecting businesses from threats before they get through the door. Learn more about pre-employment tests and shield your company from risks today.

For more information and inquiries about our fraud prevention tests, don’t hesitate to contact Aptitude today.

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