Financial crime, as defined by the Financial Conduct Authority’s (FCA) Handbook of the UK, encompasses any kind of criminal conduct relating to money or to financial services or markets. This includes any offence involving fraud or dishonesty, misconduct in, or misuse of information relating to, a financial market, handling the proceeds of crime, or the financing of terrorism. This definition is broad and encompasses a wide range of activities, reflecting the diverse nature of financial crimes. Financial crimes can include everything from money laundering and fraud to bribery and corruption. They can be committed by individuals, organizations, or even states, and can have serious consequences, including financial loss, reputational damage, and legal penalties.

Choice B is incorrect. While this option does cover some aspects of financial crime, such as fraud and misappropriation of property, it unnecessarily excludes diversity/discrimination events. Financial crimes can involve a wide range of illegal activities, not just those intended to defraud or misappropriate property. Furthermore, the involvement of an internal party is not a necessary condition for an act to be considered a financial crime.

Choice C is incorrect. This choice incorrectly limits the definition of financial crimes to acts committed by third parties only. Financial crimes can be committed by anyone involved in the handling or management of money or financial services, including employees and executives within an organization.

Choice D is incorrect. Although this option includes several types of misconduct that could be classified as financial crimes (e.g., extortion, embezzlement), it fails to capture the full breadth and complexity of what constitutes a 'financial crime'. For instance, it does not mention fraudulent activities related to financial markets or services which are also part of 'financial crime'.