Fraud Causal Factors

Causal Factor	Definition
Theft and Misappropriation	Manager misapproriates fund assets for personal use.
Existence of Assets	Manager creates fictitious assets or operates a Ponzi scheme whereby reported assets do not exist.
Misvaluation of Fund Assets	Securities recorded at a price in excess of fair market value in the NAV calculation.
Rogue Trading	Losses due to unrecorded trading activities.
Concealment of Trading Losses	Manager issues fictious statements to investors showing positive returns when actual trading has been loss making.
Strategy Misrepresentation	Manager provides falsified information as to trading activity and portfolio holdings.
Fictitious Service Providers	Manager commits fraud through creation of fictious service providers.
Conflict of Interest	Losses due to affiliated entities (i.e. related party broker-dealer) and other conflictes of interest.
Legal / Regulatory Violation	Manager conducts an investment strategy that is illegal or subsequently found to be illegal; Manager subject to other form of legal or regulatory violation.
Marketing Misrepresentation	Manager deliberately misrepresents issues such as assets under management, performance or infrastructure.
Inaccurate Personal Background	Manager misrepresents personal, educational or professional credentials.
Other	Other operational issues including unethical business activities and relationships, political risks, pending litigation.