For the risk profiling of the counterparty

1. Fraud: nightmare of any business or lender
in Commodity Trading.
Upstate New York Woman Admits Stealing $3.1 Million From Cargill Inc.
Backis faces up to 20 years in prison, a three-year term of supervised release and a fine
of up to $250,000 when she is sentenced on March 28, 2017 by U.S. District Judge Mae
A. D’Agostino in Albany. As part of her guilty plea, Backis has agreed to pay Cargill at
least $3.5 million in restitution and to forfeiture of her house in Athens, an investment
brokerage account, and her Cargill pension benefits.*
Ms. Diane Backis, former accounting manager at Cargill, pleaded guilty on Nov. 28 to
stealing at least $3.1 million from the Minneapolis-based company over a 10-year
period.
While at Cargill, Ms. Backis was responsible for accounting functions in Albany related
to the company’s grain operations, including creating customer contracts”.
$310,000 per year on 10-years at a Cargill terminal was perhaps .2% that could have been
dissimulated into the grain pile shrink.
Then came a year where the U.S dollar (high) has impaired the export business. Someone
in Minneapolis inquires the terminal receiving less quantity of a grain product about why
the shrinkage remains the same in Albany ?
* https://www.justice.gov/opa/pr/upstate-new-york-woman-admits-stealing-31-million-
cargill-inc
Employees’ theft is rampant.
The nightmare of any business or lender in commodity trading is fraud.
What is good today or what is good as business counter party can go wrong.
The good company crossing the lines, committing a fraud becomes the rogue company.
The second comment fraud at the commodity trader is the financial fraud. What is this
position ? – never mind it is just “something”…
The trading manager at the company should never take what a trader says at its face value
because the management of the commodity traders is comprised predominantly of traders
predisposed to defend their books.

2. They might be also reluctant to recognize losses at market valuations they considered
“below fundamentals” or protect the information on certain aspects of their business
which can make their entity less attractive at a point in time to their stakeholders or
counterparties. Some companies systematically use devices and complex transactions
following the IFRS and GAAP accounting norms but not their spirit.
Therefore, it is not a static risk management but a continual verification inside of the
company or with the counterparty at any giving time that is required.
This very procedural verification ensures that there is no fraudulent transaction.
Know your employees, know where your company and where the counterparty is in the
market. Stay as close as possible to be able to anticipate and detect. What is known as
KYC in the banking sector since 400 years.
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Simon Jacques does the risk profiling of the commodity traders at Commodity Merchant
Trading and Shipping Advisory. He is a certified Energy Risk Professional, as
distinguished by the prestigious Global Association of Risk Professionals.
Contact Simon
P&C / 1-226-348-5610
Commodity trading and finance