A criminal offense that is either perpetrated by a corporation or by a person or people acting on behalf of a corporation is referred to as corporate crime. Corporate crime frequently overlaps with white-collar crime, state-corporate crime, and organized crime (a common practice among criminal organizations is to set up “shell” corporations for the purposes of committing crimes or for laundering the proceeds of crime).
Corporate crime, sometimes known as white-collar crime, is when a person commits a crime on behalf of a company. Although the people involved may personally profit from such acts, the corporate crime definition makes it clear that individuals perpetrate corporate crimes to benefit the businesses they work for.
Criminologists have put out a number of hypotheses on business crime. Psychiatrist Edwin Sutherland offered the first official justification for corporate crime in 1939. According to his theory of differential association, people engage in criminal behavior when they associate with those who have a favorable opinion of criminal behavior.
Sutherland contends that illegal activity only takes place when people are in settings where most of their peers do not have an unfavorable opinion of it. The Hypothesis of Labeling Theory has come under fire from certain investigators who claim it ignores other factors including drug usage and depression. Sutherland’s hypothesis also fails to take individual characteristics into account.
Types Of Corporate Crime
There are typically two types of corporate crime. First, a corporation may be created specifically as a means of committing the crime. This typically happens in short-term operations, where the corporation’s founders put on the appearance of a respectable business to lure unwary investors in before fleeing with their money.
The second, all-too-common type of corporate crime takes place in already established corporations and is disguised by blending in with regular business operations. Examples of this include profitable but ecologically harmful actions (such as the illicit disposal of toxic waste), worker exploitation, and all forms of fraud, usually done at the expense of consumers.
Examples of corporate crime abound and are diverse. Corporate crime includes, but is not limited to, breaking environmental regulations, accepting bribes, making false claims, and engaging in corporate fraud. In fact, the forms of white-collar crimes are only constrained by the imagination of the criminal.
• Environmental regulations are there to preserve the environment, but most people who break them do so to boost business profits. Although the firm may profit by breaking environmental laws, in this type of situation, the criminals most likely anticipate gaining indirect benefits as well, such as corporate bonuses, raises in pay, or higher stock prices. This kind of criminal activity is illustrated by a Royal Caribbean Cruises Ltd. case. The corporation was fined a record-breaking 18 million dollars in 1999 for systematically disposing of waste oil, a practice that took place across the company’s entire fleet. Additionally, firm representatives submitted fabricated oil logs to the Marine Corps in order to falsify the disposal of oil.
• Bribery happens when someone gives another person something of value in order to affect the recipient’s behavior. Rite Aid Corporation was penalized $2.99 million in 2014 for bribing Medicare and Medicaid patients to switch their medications to Rite Aid pharmacies by giving them gift cards.
• Beech-Nut settled a litigation in the 1980s that revealed the business had lied when it said its apple juice was 100% fruit juice. In actuality, it was discovered that the product was mostly made of sugar water and contained very little apple juice.
• Embezzlement is the deliberate falsification of information regarding a company’s operations or financial status. This type of deception aims to deceive the public or boost business revenues. WorldCom, a Mississippi-based telecommunications corporation, was discovered to have inflated its earnings to boost stock prices in what was the greatest example of corporate fraud at the time. These activities resulted in the company’s collapse and the CEO of WorldCom receiving a 25-year prison sentence.
Although businesses may bemoan the burden of federal agencies and their execution of laws, they often have more resources, personnel, and time to spend to their defense than the government does to its. Regulatory organizations have come under fire for their failure to hold strong firms accountable for breaking the law.
Corporate Crimes and it’s Laws
The punishments for breaking the law are frequently insufficient to serve as deterrents. Criminals are rarely found guilty and rarely sentenced to prison. Many people are allowed to enter a nolo contendere (no contest) plea in order to avoid the stigma of being branded “guilty” or “criminal.” In many cases, the corporations to be regulated serve as the directors of the agencies that are appointed; these same corporations may later hire retiring agency personnel.
For a variety of reasons, corporate crime is especially challenging to identify and eradicate. Corporate crime, in contrast to street crime, is a very private conduct that takes place in a home or office without typically any witnesses.
The majority of FBI and legal experts are not completely versed in the financial, stock market, trading, and other special topics that are involved in many crimes. Even if a white-collar criminal is apprehended, it may be challenging to establish whether the act was the result of the person’s position or was done knowingly, menacingly, or carelessly.
Corporate crime has significantly increased over the past decade, and the cause for this large rise may be found in the rapidly rising nations and their industrial development. This crime is a result of the swift development of industries and technologies.
The elimination of firms has been one of the latest great disasters. 2750 of the 5651 businesses listed on the Bombay Stock Exchange have disappeared. It indicates that one out of every two enterprises who visit the stock exchange to raise millions of dollars from investors leave after doing so. To keep an eye on the stock market, we have SEBI, RBI, and the Department of Entities Business, yet none of them has recorded the movements of these 2750 odd companies.
Many people conduct white-collar crimes because of a desire for personal gain. However, this crime becomes a corporate crime when it is committed by a group of people or an association within a firm. The loss incurred as a result of other traditional crimes like theft, trespassing, burglary, arson, etc. is significantly lower than the loss incurred as a result of white-collar crimes. It has a negative effect on our nation’s economy and trade. Additionally, it causes investors to lose faith in the market.
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