Over the past decade, there has been massive activity in Corporate America that appears to involve violations of the criminal laws. I have often wondered why there haven’t been more criminal prosecutions in that arena. Maybe it’s because the federal government has been closing its regulatory and prosecutorial eyes to a most serious and growing problem. It’s been reported that 95% of criminologists in the United States study blue collar crime, while only 5% study white collar crime. And, it is said that of the small minority who even bother to study white collar crime, 95% focus on the individuals who cheat the corporation. Some have asked why there isn’t greater emphasis on crime by the corporation itself. That would seem to be a fertile field for regulators and prosecutors. There is a type of fraudulent conduct that is called “control fraud.” That’s where the CEO of a company uses the corporation as a weapon to commit fraud.
Bill Black, a lawyer and a former federal bank regulator, is the author of what is described as the corporate crime classic – The Best Way to Rob a Bank is to Own One. Mr. Black has listed some specific steps that he says can be taken to control corporate crime and specifically crimes of a financial nature. The following are a few things on his most interesting list:
• Strong and effective regulation is essential.
• 1,000 FBI agents should be hired.
• A chief criminologist should be appointed at each of the financial regulatory agencies.
• Executive bonuses should be fixed by tying them to long term corporate performance.
• The top 100 corporate criminals should be targeted.
• He wants the FBI partnership with the Mortgage Banker Association (the trade association of the big banks) “busted up.”
• Get rid of Too Big to Fail in Corporate America.
• He wants the creation of a Consumer Financial Protection Agency that is truly independent and he even has a suggestion of who should head it up – Elizabeth Warren, the Harvard Law School professor.
In addition, Mr. Black believes that Ben Bernanke should be replaced as Chair of the Federal Reverse and Timothy Geithner replaced as Treasury Secretary. While Mr. Black isn’t alone on this front, I don’t know enough to agree on his opinion of these two powerful men. But I do agree that each of them must perform at a much higher level in the coming months.
Source: Corporate Crime Reporter
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