Corporate Liability for Economic Crime

Crime is the outcome of unethical issues unethical practices encourage crimes at various levels. In the corporate level crime also take place. There are three types of corporate crime.

Various types of crimes are shown in figure given below

A detailed description of how criminologists can better understand and study corporate crime.

Corporate Crime - Criminology - Oxford Bibliographies

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Prosecutors have faced criticism for failing to make more use of landmark legislation, passed in 2007, which created the realistic prospect of large and medium companies being found guilty of corporate manslaughter.

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The phrase “corporate crime” is traced to criminologists Marshall Clinard and Richard Quinney who, in their classic text , called for a distinction among types of white-collar crimes. The authors identified corporate crime and occupational crime as general varieties of white-collar crime. Corporate crime refers to situations where corporate officials commit criminal or harmful acts for the benefit of the corporation, while occupational crime refers to situations where individual employees commit crimes against the corporation, workplace, or consumer during the course of employment. Much of the research on corporate offending has considered the characteristics of this offense type, with a great deal of debate centering on whether corporations actually “commit” crime. Those who study corporate crime generally conclude that corporate offending creates far more harm than traditional offending. Researchers also agree that traditional explanations for criminal behavior may not apply to corporate crime. Typically, traditional criminological theories ignore organizational factors, while explanations for corporate offending must consider these same factors to fully understand corporate offending. The criminal justice, or official, response to corporate offending is also different than the official response to traditional offending. The response to traditional offending tends to involve aggressive law enforcement responses and stiff penalties, while the response to corporate offending tends to involve reactive responses with minor penalties. In a similar way, the societal response to corporate offending tends to minimize the seriousness of these offenses.

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Corporate Crime - Lexis®PSL, practical guidance for lawyers

But beyond this, are there other motivations for committing crimes in the corporate world? According to Pamela H. Bucy et al. ("Why They Do It: The Motives, Mores and Characters of White Collar Criminals"), white collar criminals generally fall into two categories - leaders and followers. Bucy et al. stated that leaders were motivated to commit white collar crimes for other reasons besides financial gain, money and greed. These motives included ego or a sense of entitlement, the opportunity presented itself and even fear of being fired due to lack of performance or not wanting to lose their current lifestyle. Competitiveness for being the most successful was also a stated reason. The motives for followers, who take the lead from someone more assertive to commit a white collar crime, are understandably at least partially based on their more passive or conformist nature. Bucy et al. explain that followers may choose to participate in white collar crimes because they put their faith in their leaders or alternatively they want a "piece of the action" to overcompensate for their sense of weakness and to raise their status. In some cases, followers may engage in work- or financially-related crimes because they fear there will be negative repercussions, such as being fired or having their health and safety threatened.

Corporate Crime Investigations, (White Collar Crimes):

Some criminal psychologists also refer to the fraud triangle, developed by sociologist Donald Cressey, to explain motivations behind these types of crimes. It is based on the fact that if three factors are present an individual is tempted to carry out deceitful, financial acts. The three components are: incentive or pressure (ranging from financial gain to the fear of losing one's job), the opportunity (such as the means to conduct ruthless transactions with little risk of being caught) and the ability to rationalize (such as thinking he or she will be able to pay the firm back or that their company does not pay them a high enough salary).

Center for Corporate Policy: Corporate Crime and Abuse

When Sutherland studied 70 major companies in the United States during the late 1940s he found that 97% of them reoffended, even after they were caught and prosecuted. In fact he stated that corporate crimes were the rule not the exception. Young states, "Sutherland found that criminal behavior of these corporations was 'normal,' that is to say, they all engaged in illegal labor practices, falsified advertizing, stole patents and copyrights from each other, defrauded their customers, and conspired to control the making and the marketing of goods and services". The motivations might seem black and white. Those individuals who commit white collar crimes do so for financial reasons (either fuelled by survival instincts or greed) and companies commit crimes to grow, flourish and in some cases survive.