The Behavioural Aspects of Fraud at Livent Inc. By: Abbey Goodine, Morgan MacKay, Lauren Flewelling

The fraud triangle is a model for explaining the factors that cause someone to commit occupational fraud. It consists of three components which, together, lead to fraudulent behavior: Fraud Triangle

Pressure Motivates the crime Examples: Desire for status symbols such as bigger house, nicer car etc. Need to meet earnings to sustain investor confidence

Opportunity Defines the method by which the crime can be committed Created by weak internal controls, poor management oversight, and/or through the use of one’s position and authority

Rationalization The way the fraudster justifies the crime Common rationalizations: The person believes they are entitled to the money The person is unable to understand or does not care about the consequence of their actions or of accepted notions of decency and trust

Livent Fraud - Key Players 1.Myron Gottlieb & Garth Drabinsky 2.Maria Messina 3.Deloitte

Myron Gottlieb and Garth Drabinsky Drabinsky: creative genius, but dark side to personality + Gottlieb: accounting expertise = BAD COMBINATION

Maria Messina “I did not have the strength to go up against Myron Gottlieb and Mr. Drabinsky. They were men of money, power and influence”

Deloitte & Touche LLP Failed to detect fraud at the company Have since been sued for their negligence

Thank you! Questions?