The years 2008 shined a light on a group of people who were considered high society. When the stock market crashed in September 2008, the world shines a spotlight on the financial corporation. Words such as hedge fund manager and financial instrument such as credit default swaps are not words not known to everyday citizens. The economic downturn forced society to ask question not normally asked.
The reality that there are criminal who has assessed too many people retirement and investment is a shocking and alarming to the non-professional investor. When someone is in a legitimate occupation and committing, an illegal act is a white-collar crime. “To be more concise white - collar crime is define as any illegal act, punishable by a criminal sanction, that is committed in the courses of a legitimate occupation or pursuit by a corporation or by an otherwise respectable individual of high social standing” (Conklin, 2007, Criminology, p. 69).
This is not to say that all white-collar crime is committed by upper income or affluent persons. The Sociologist Edwin Sutherland, who is responsible for the term white-collar crime around, classified some lesser affluent crimes as white-collar crime. The next section of this paper examines the different type of white-collar crime and the law that regulate them. Moreover, the social impact of the white-collar crimes will be analyzed as well.
“The laws that governed many of the offenses considered white collar fall under the scope of the Securities Exchange Act of 1934 which regulate trading of certain financial instrument like bonds , stocks and debentures”(www.sec.gov). Another law governing white-collar crimes is the Sherman Antitrust Act of 1890. The Sherman Act lim...
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...trate more on white collar crime because as the 2008 financial meltdown have shown white collar crime can bring down a country.
In conclusion, The years 2008 shined a light on a group of people who were considered high society. When the stock market crashed in September 2008, the world shines a spotlight on the financial corporation. The world now knows what words such as hedge fund manager and financial instrument such as credit default swaps mean today. The economic downturn forced society to ask questions not normally asked and now pay closer attention to white collar crimes.
References
Conklin, J. E. (2007). Criminology (10th ed.). Boston: Pearson, Allyn, and Bacon.
Price, M. & Norris, D. (2009) White-Collar Crime: Corporate and Securities and Commodities Fraud Retrieved from www.jaapl.org
White collar crime is a term created by Edwin Sutherland in 1939 that refers to crimes committed by people of higher social status, companies, and the government according to the book “White-Collar Crime in a Nutshell” by Ellen Podgor and Jerold Israel. White collar crimes are usually non-violent crimes committed in order to have a financial-gain (Podgor and Israel 3). A very well known white collar crime that has even been taught in many history classes is the Watergate scandal. This is a white collar crime that was committed by government authorities. Watergate was a crime that shocked the nation.
White-collar crime is the financially motivated illegal acts that are committed by the middle and upper class through their legitimate business or government activities. This form of crime was first coined by Edwin Sutherland in 1939 as “a crime committed by a person of respectability and high social status in the course of his occupation.” (Linden, 2016). Crime has often been associated with the lower class due to economic reasons. However, Sutherland stressed that the Criminal Justice System needed to acknowledge illegal business activity as crime due to the repercussions they caused and the damage they can cause to society (Linden, 2016). Crime was prevalently thought to only be
The installment of new security could even be a problem, for people who operate these new security systems could also be a potential thief. There is an approach among many enterprises that it is simpler to easily excuse the employee who committed the offense, instead of dealing with the law and the officers; and follow through with the money and time by prosecuting in order to seek restitution. Sometimes the firm does not to acquire the negative publicity that has to do with the internal offense, especially when their reputation is predominant to their company model. White-collar crime is often categorized as a crime without a victim, damaging only large, objective corporations. Recent news broadcasts portray nothing could be farther from the absolute truth.
There is a myth that there is great tolerance towards the existence of white collar crime, but this is not true. It
Most people consider this crime to consist of CEO’s manipulating their way to making a large fortune. This of course, is true most of the time in high-profile cases. For example, in late 2001 Enron Corporation executives confessed to overstating the company’s earnings. This lead to artificially inflating what the company was worth and deceived the investors. It took some time to unravel all the fraud put behind this devious act but shows how sophisticated white-collar crime can be. Although it’s usually associated with upper management of corporations, people from all different levels and occupations can perform this crime ("How White-collar Crime Works").
White collar and corporate crimes are crimes that many people do not associate with criminal activity. Yet the cost to the country due to corporate and white collar crime far exceeds that of “street” crime and benefit fraud. White collar and corporate crimes refer to crimes that take place within a business or institution and include everything from Tax fraud to health and safety breaches.
For instance, any financial crime can leave individuals without shelter, money, or any reasonable quality of life due to the white collar offense. Therefore, white collar crime may not involve force, they still may affect people physically. As a matter of fact, white collar crime may result in a greater impact than street crimes. Nevertheless, we continue to operate on a dichotomy of beliefs regarding violent and non-violent crimes. In this paper, we will explore white collar crime as a non-violent crime. Those crimes under discussion are blackmail, bribery, embezzlement, and forgery. In addition, we will discuss violent crimes such as first degree, second degree, and manslaughter (Verstein,
White collar crimes do not garner as much media attention as that of violent crimes (Trahan, Marquart, & Mullings 2005). This is an odd fact because white collar crimes cost society much more than violent crimes do (Messner & Rosenfeld 2007). While there are many different definitions for white collar crime, Schoepfer and Piquero describe it as a nonphysical crime that is used to either obtain goods or to prevent goods from being taken (2006). People who commit these crimes are looking for personal or some sort of organizational gain and are being pressured to be economically successful from the idea of the American dream. The authors suggest that there are two types of people who commit crimes, those who have an immense desire for control and those who fear losing all they have worked hard for (Schopfer & Piquero 2006). Both groups have different reasons for turning to crime, but both groups commit the crime to benefit themselves. It was found that higher levels of high school drop outs were directly correlated to levels of embezzlement in white collar crime (2006). Because they are drop outs, they are less likely to be successful legitimately and turn to crime more often than their graduate
1. Reiman explains that the idea that white collar crime is taken less seriously is because it protects the elite classes. For example, if the public believes they should fear the poor more than the rich, the rich can commit more crimes and go unnoticed because the population is focused on the poor Reiman explains that that the way crime is explained does not exactly fit what we think crime is. He explains that the notion that white-collar crime being harmless is based on the idea that white collar crimes do not end in injury or death is false because more people’s lives are put at risk than “lower class” crimes. Reinman thinks it is necessary to re- educate the public on white-collar crimes for economic
Marilyn Price and Donna Norris” (Perri, J.D., CFE, CPA, 2011, p. 23). Even though white collar crimes do not seem as violent as someone that commits murder there is still major damage done. For example, a fraud victim goes through a lot of hardship. They can be harassed, have their identity stolen, and lose everything. This, in many cases, can be looked at as a serious crime.
The "subprime crises" was one of the most significant financial events since the Great Depression and definitely left a mark upon the country as we remain upon a steady path towards recovering fully. The financial crisis of 2008, became a defining moment within the infrastructure of the US financial system and its need for restructuring. One of the main moments that alerted the global economy of our declining state was the bankruptcy of Lehman Brothers on Sunday, September 14, 2008 and after this the economy began spreading as companies and individuals were struggling to find a way around this crisis. (Murphy, 2008) The US banking sector was first hit with a crisis amongst liquidity and declining world stock markets as well. The subprime mortgage crisis was characterized by a decrease within the housing market due to excessive individuals and corporate debt along with risky lending and borrowing practices. Over time, the market apparently began displaying more weaknesses as the global financial system was being affected. With this being said, this brings into question about who is actually to assume blame for this financial fiasco. It is extremely hard to just assign blame to one individual party as there were many different factors at work here. This paper will analyze how the stakeholders created a financial disaster and did nothing to prevent it as the credit rating agencies created an amount of turmoil due to their unethical decisions and costly mistakes.
This case illustrated that there were real consequences to white collar crime. In addition to paying the fifty million dollar fine, he relinquished another fifty million dollars of his illegal trading profits. (He still had millions remaining, however, from his illegal gains.) His actual prison sentence was three years, yet he served only twenty-two months in the federal prison at Lompoc, California, which was known to have a “country-club” atmosphere.
The foundation of our country, the keystone to our democratic system, is the integrity of social institutions that we not only assume we can trust but have come to rely on for most aspects in our daily lives. The integrity of these social institutions can only be achieved through building blocks such as internal controls and independent, verifiable information. White collar criminals build a sense of false integrity around them in order to gain the trust of their victims, ranging from the young to the very old. Friedrich’s (2010) Trusted Criminals defines the foundation to white collar crime, the level of trust we have for those in power. We trust those in charge, those with power, and those who represent the integrity of our social institutions.
Since social problems related to negative affect to certain people, therefore white collar crimes also type of social problem. The term white collar crimes widely known today. As mention by Friedrichs (2010), the term white collar crime was introduced by Edwin H. Sutherland in 1993 although the crimes has been detected well back in history (pp. 2-3). Some prefer to define white-collar crime as violations of criminal law. In Adam’s (2011) view, this type of crime refer to non-violent crime usually done by a respectable and higher status individuals and institutions such as embezzlement, fraud and corruption which are motivated by financial gain (p. 1). According to cases took place in Malaysia, it had recorded losses of RM 6 billion once regarding to this crime (Adam, 2011).
White-collar crimes and organizational structure are related because white collar-crimes thrive in organizations that have weak structures. According to Price and Norris (2009), the elites who commit white collar-crimes usually exploit weaknesses in organizational structure and formulate rules and regulations that favor their crimes. Makansi (2010) examines case studies to prove that white-collar crime is dependent on organizational structure. For example, the financial crisis that Merchant Energy Business faced in 2001-2002 occurred due to the liberal Financial Accounting Board, which failed to provide a standard model of valuing natural gas and fuel. Moreover, a financial crisis that rocked the securitization market in 2008 was due to fraudulence in the pricing of securitization products. These examples ...