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Risk Management

Risk Management

Definition of 'Risk Management'

The process of identification, analysis and either acceptance or mitigation of uncertainty in investment decision-making. Essentially, risk management occurs anytime an investor or fund manager analyzes and attempts to quantify the potential for losses in an investment and then takes the appropriate action (or inaction) given their investment objectives and risk tolerance. Inadequate risk management can result in severe consequences for companies as well as individuals. For example, the recession that began in 2008 was largely caused by the loose credit risk management of financial firms.

Explanation of  'Risk Management'


Simply put, risk management is a two-step process - determining what risks exist in an investment and then handling those risks in a way best-suited to your investment objectives. Risk management occurs everywhere in the financial world. It occurs when an investor buys low-risk government bonds over more risky corporate debt, when a fund manager hedges their currency exposure with currency derivatives and when a bank performs a credit check on an individual before issuing them a personal line of credit.

Ig Nobel winner writes “best abstract ever”

The Shortest Science Paper Ever Published Had No Words, and Was Utterly Brilliant

Scientists are widely known for their inclination to drone on about esoteric topics in a language of jargon. But every so often, they can surprise us with conciseness. Take these three pithy offerings published in reputable scientific journals, for example:
Shortest Editorial:
In his contribution to the November/December 2013 issue of Evolutionary Anthropology, esteemed biological anthropologist Ian Tattersall, curator emeritus at the American Museum of Natural History, did not mince words. In fact, he only wrote two of them: "Enough already."
The statement concluded a year of back and forths between Tattersall and one of his colleagues, Boston University anthropologist Matt Cartmill. The tiff began with Cartmill's paper "Primate origins, human origins, and the end of higher taxa," continued with Tattersall's "Higher taxa: An alternate perspective," continued again with Cartmill's "The end of higher taxa: a reply to Tattersall," before Tattersall finally declared "Enough already."
Cartmill and Tattersall's recent exchange was the latest in a series of erudite bickering that's been ongoing since the 1980s. Though good friends, the two share manifold disagreements on Systematics -- the study of the diversification of living forms -- and how it should be used. By examining the relationships between species, we can track how life gradually transformed over billions of years from single-celled organisms to become whales, spiders, and even humans. In essence, Cartmill questions why often tiny differences separate certain animals into different species and families while others do not. Tattersall views this stance as an attack on Systematics itself, avowing that it's vital to document every tiny change and classify species accordingly.
Shortest Abstract:
In 2011, particle physicists were flabbergasted when they discovered that neutrinos could apparently travel faster than light, breaking the universal speed limit proposed by Einstein. Their result was later proven to be in error.
But before the mistake was revealed, physicists scrambled to account for the mind-boggling result. A group from the H.W. Wills Physics Laboratory in Bristol and the Indian Institute of Technology wondered, ""Can apparent superluminal neutrino speeds be explained as a quantum weak measurement?" Their abstract succinctly and bluntly answered that question: "Probably not."
Shortest Paper:
In 1974, clinical psychologist Dennis Upper found himself stricken with writer's block. Though pen was to paper, no words would flow. He decided to solve his problem with a scientific experiment. Yet, as is frequently the case in science, his experiment didn't work as intended, and that's putting it euphemistically. Despite the failure, his work, "The unsuccessful self-treatment of a case of “writer's block,” was published in the prestigious Journal of Applied Behavioral Analysis. It is reproduced in its entirety below:
Nasty case of writer's block creates the most brilliant scientific paper ever
Despite the paper's glaring brevity, Upper's reviewer hailed its brilliance:
"I have studied this manuscript very carefully with lemon juice and X-rays and have not detected a single flaw in either design or writing style. I suggest it be published without revision. Clearly it is the most concise manuscript I have ever seen-yet it contains sufficient detail to allow other investigators to replicate Dr. Upper's failure. In comparison with the other manuscripts I get from you containing all that complicated detail, this one was a pleasure to examine. Surely we can find a place for this paper in the Journal-perhaps on the edge of a blank page."

Child Exploitation and Obscenity Section

“Unfortunately, we´ve also seen a historic rise in the distribution of child pornography, in the number of images being shared online, and in the level of violence associated with child exploitation and sexual abuse crimes. Tragically, the only place we´ve seen a decrease is in the age of victims.
This is – quite simply – unacceptable.”
-Attorney General Eric Holder Jr. speaks at the National Strategy Conference on Combating Child Exploitation in San Jose, California, May 19, 2011.
Child Pornography
           Child pornography is a form of child sexual exploitation. Federal law defines child pornography as any visual depiction of sexually explicit conduct involving a minor (persons less than 18 years old).  Images of child pornography are also referred to as child sexual abuse images.
           Federal law prohibits the production, distribution, importation, reception, or possession of any image of child pornography.   A violation of federal child pornography laws is a serious crime, and convicted offenders face fines severe statutory penalties (For more information, see Citizen's Guide to Federal Law on Child Pornography).

Citizen's Guide to U.S. Federal Law on Child Pornography
18 U.S.C. § 2251- Sexual Exploitation of Children
(Production of child pornography)
18 U.S.C. § 2251A- Selling and Buying of Children
18 U.S.C. § 2252- Certain activities relating to material involving the sexual exploitation of minors
(Possession, distribution and receipt of child pornography)
18 U.S.C. § 2252A- certain activities relating to material constituting or containing child pornography
18 U.S.C. § 2256- Definitions
18 U.S.C. § 2260- Production of sexually explicit depictions of a minor for importation into the United States
           Images of child pornography are not protected under First Amendment rights, and are illegal contraband under federal law. Section 2256 of Title 18, United States Code, defines child pornography as any visual depiction of sexually explicit conduct involving a minor (someone under 18 years of age).  Visual depictions include photographs, videos, digital or computer generated images indistinguishable from an actual minor, and images created, adapted, or modified, but appear to depict an identifiable, actual minor.  Undeveloped film, undeveloped videotape, and electronically stored data that can be converted into a visual image of child pornography are also deemed illegal visual depictions under federal law.
           Notably, the legal definition of sexually explicit conduct does not require that an image depict a child engaging in sexual activity.  A picture of a naked child may constitute illegal child pornography if it is sufficiently sexually suggestive.  Additionally, the age of consent for sexual activity in a given state is irrelevant; any depiction of a minor under 18 years of age engaging in sexually explicit conduct is illegal.
          Federal law prohibits the production, distribution, reception, and possession of an image of child pornography using or affecting any means or facility of interstate or foreign commerce (See 18 U.S.C. § 2251; 18 U.S.C. § 2252; 18 U.S.C. § 2252A).  Specifically, Section 2251 makes it illegal to persuade, induce, entice, or coerce a minor to engage in sexually explicit conduct for purposes of producing visual depictions of that conduct.  Any individual who attempts or conspires to commit a child pornography offense is also subject to prosecution under federal law.
          Federal jurisdiction is implicated if the child pornography offense occurred in interstate or foreign commerce.  This includes, for example, using the U.S. Mails or common carriers to transport child pornography across state or international borders.  Additionally, federal jurisdiction almost always applies when the Internet is used to commit a child pornography violation. Even if the child pornography image itself did not traveled across state or international borders, federal law may be implicated if the materials, such as the computer used to download the image or the CD Rom used to store the image, originated or previously traveled in interstate or foreign commerce.
           In addition, Section 2251A of Title 18, United States Code, specifically prohibits any parent, legal guardian or other person in custody or control of a minor under the age of 18, to buy, sell, or transfer custody of that minor for purposes of producing child pornography.
         Lastly, Section 2260 of Title 18, United States Code, prohibits any persons outside of the United States to knowingly produce, receive, transport, ship, or distribute child pornography with intent to import or transmit the visual depiction into the United States.
          Any violation of federal child pornography law is a serious crime, and convicted offenders face severe statutory penalties.  For example, a first time offender convicted of producing child pornography under 18 U.S.C. § 2251, face fines and a statutory minimum of 15 years to 30 years maximum in prison.  A first time offender convicted of transporting child pornography in interstate or foreign commerce under 18 U.S.C. § 2252, faces fines and a statutory minimum of 5 years to 20 years maximum in prison.  Convicted offenders may face harsher penalties if the offender has prior convictions or if the child pornography offense occurred in aggravated situations defined as (i) the images are violent, sadistic, or masochistic in nature, (ii) the minor was sexually abused, or (iii) the offender has prior convictions for child sexual exploitation.  In these circumstances, a convicted offender may face up to life imprisonment.
          It is important to note that an offender can be prosecuted under state child pornography laws in addition to, or instead of, federal law.

Child Pornography Today
          By the mid-1980's, the trafficking of child pornography within the United States was almost completely eradicated through a series of successful campaigns waged by law enforcement.  Producing and reproducing child sexual abuse images was difficult and expensive. Anonymous distribution and receipt was not possible, and it was difficult for pedophiles to find and interact with each other.  For these reason, child pornographers became lonely and hunted individuals because the purchasing and trading of such images was extremely risky.
          Unfortunately, the child pornography market exploded in the advent of the Internet and advanced digital technology.  The Internet provides ground for individuals to create, access, and share child sexual abuse images worldwide at the click of a button.  Child pornography images are readily available through virtually every Internet technology including websites, email, instant messaging/ICQ, Internet Relay Chat (IRC), newsgroups, bulletin boards, peer-to-peer networks, and social networking sites.  Child pornography offenders can connect on Internet forums and networks to share their interests, desires, and experiences abusing children in addition to selling, sharing, and trading images.
           Moreover, these online communities have promoted communication between child pornography offenders, both normalizing their interest in children and desensitizing them to the physical and psychological damages inflicted on child victims.  Online communities may also attract or promote new individuals to get involved in the sexual exploitation of children.

Victims of Child Pornography

          It is important to distinguish child pornography from the more conventional understanding of the term pornography.  Child pornography is a form of child sexual exploitation, and each image graphically memorializes the sexual abuse of that child.  Each child involved in the production of an image is a victim of sexual abuse.
         While some child sexual abuse images depict children in great distress and the sexual abuse is self-evident, other images may depict children that appear complacent.  However, just because a child appears complacent does not mean that sexual abuse did not occur.  In most child pornography cases, the abuse is not a one-time event, but rather ongoing victimization that progresses over months or years.  It is common for producers of child pornography to groom victims, or cultivate a relationship with a child and gradually sexualize the contact over time.  The grooming process fosters a false sense of trust and authority over a child in order to desensitize or break down a child´s resistance to sexual abuse.  Therefore, even if a child appears complacent in a particular image, it is important to remember that the abuse may have started years before that image was created.
          Furthermore, victims of child pornography suffer not just from the sexual abuse inflicted upon them to produce child pornography, but also from knowing that their images can be traded and viewed by others worldwide.  Once an image is on the Internet, it is irretrievable and can continue to circulate forever.  The permanent record of a child´s sexual abuse can alter his or her live forever.  Many victims of child pornography suffer from feelings of helplessness, fear, humiliation, and lack of control given that their images are available for others to view in perpetuity.
          Unfortunately, emerging trends reveal an increase in the number of images depicting sadistic and violent child sexual abuse, and an increase in the number of images depicting very young children, including toddlers and infants. 

CEOS’s Role
          CEOS works to deter and eradicate the production, distribution and possession of child pornography.  CEOS attorneys work with the High Technology Investigative Unit (HTIU), the Federal Bureau of Investigation (FBI), United States Attorney´s Offices throughout the country, and the National Center for Missing & Exploited Children (NCMEC) to vigorously combat this growing problem by investigating and prosecuting violators of federal child pornography laws.  In addition, CEOS attorneys work with law enforcement personnel to identify and rescue victims of child pornography from continued abuse.
          The use of the Internet to commit child pornography offenses has blurred traditional notions of jurisdiction.  CEOS maintains a coordinated, national-level law enforcement focus to help coordinate nationwide and international investigations and initiatives.
          Furthermore, CEOS attorneys and HTIU computer forensic specialists travel all over the world to conduct and participate in trainings for investigators, law enforcement personnel, and others involved in efforts to investigate and prosecute child pornography offenders.  CEOS also designs, implements, and supports law enforcement strategies, legislative proposals, and policy initiatives relating to federal child pornography laws.




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