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    White Collar Crime: DR DRH

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    himanshi khivsara
    The document discusses the history and emergence of white collar crimes. It notes that one of the earliest documented cases of white collar crime was in 15th century England, where an agent attempted to steal wool he was transporting. The growth of industrial capitalism in the 18th century led to new forms of crime and criminality committed by the bourgeoisie class. The US passed the Sherman Antitrust Act in 1890 to make monopolistic trade illegal. The document also discusses the costs of fraud globally and in India, noting that Indian companies lose approximately 2.4% of revenue to fraud on average. It notes that insider employees commit the majority (around 60%) of fraud cases.

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    White Collar Crime: DR DRH

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    himanshi khivsara
    29 views7 pages
    The document discusses the history and emergence of white collar crimes. It notes that one of the earliest documented cases of white collar crime was in 15th century England, where an agent attempted to steal wool he was transporting. The growth of industrial capitalism in the 18th century led to new forms of crime and criminality committed by the bourgeoisie class. The US passed the Sherman Antitrust Act in 1890 to make monopolistic trade illegal. The document also discusses the costs of fraud globally and in India, noting that Indian companies lose approximately 2.4% of revenue to fraud on average. It notes that insider employees commit the majority (around 60%) of fraud cases.

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    The document discusses the history and emergence of white collar crimes. It notes that one of the earliest documented cases of white collar crime was in 15th century England, where an agent attempted to steal wool he was transporting. The growth of industrial capitalism in the 18th century led to new forms of crime and criminality committed by the bourgeoisie class. The US passed the Sherman Antitrust Act in 1890 to make monopolistic trade illegal. The document also discusses the costs of fraud globally and in India, noting that Indian companies lose approximately 2.4% of revenue to fraud on average. It notes that insider employees commit the majority (around 60%) of fraud cases.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    29 views7 pages

    White Collar Crime: DR DRH

    Uploaded by

    himanshi khivsara
    The document discusses the history and emergence of white collar crimes. It notes that one of the earliest documented cases of white collar crime was in 15th century England, where an agent attempted to steal wool he was transporting. The growth of industrial capitalism in the 18th century led to new forms of crime and criminality committed by the bourgeoisie class. The US passed the Sherman Antitrust Act in 1890 to make monopolistic trade illegal. The document also discusses the costs of fraud globally and in India, noting that Indian companies lose approximately 2.4% of revenue to fraud on average. It notes that insider employees commit the majority (around 60%) of fraud cases.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 7

    White Collar Crime

    Dr DRH
    THE EMERGENCE OF WHITE COLLAR
    CRIMES
     The earliest documented case of white-collar crime law dates back to 15th century is England. There
    has been a case popularly known as the Carrier‘s case of 1473, where the agent was entrusted to
    transport wool and he attempted to steal some of it for him. Therefore the Star Chamber and Exchequer
    Chamber of the English Court of Law adopted the ‗breaking bulk‘ doctrine as it constituted the crime of
    larceny. However, the growth of industrial capitalism in the eighteenth century ushered a new history of
    crime and criminality. The very base of industrial capitalism is based on coercion and robbery. Now,
    before we discuss the topic let us understand the meaning of capitalism The process of emergence of
    these conditioned was termed by Karl Marx as primitive accumulation‘ while in the words of Adam
    Smith, it was ‗previous accumulon.‘ Therefore, the Dutch Marxist, William Bonger contended that
    criminal attitude develops among the working class under capitalism due to conditions of misery and at
    the same time the criminal attitude develops among the bourgeoisie from the avarice fostered when
    capitalism strives.It succeeded in United States of America in 1890, when Congress passed the Sherman
    Antitrust Act which took the initiative to make the monopolistic trade illegal. Other industrialized
    countries like Great Britain had a history of penalties involving whitecollar crime by that time, but it
    was not as sweeping as the Sherman Act
    COST OF FRAUD

     The report answers the most relevant question relating to fraud – what is the loss caused by
    fraud? The estimated figure given in the report is that globally organizations suffered 2.1%
    revenue loss due to fraud. For India, the percentage is higher at 2.4%. Further analysis
    available in the report says that 18% of the companies reported an earnings loss of more
    than 4%. A quarter of these most affected companies suffered losses more than 10%. These
    companies are reporting corruption, bribery, money laundering and regulatory breaches
    frequently. However, they are doing nothing about it. The lack of fraud prevention and
    investigation measures is causing huge losses in these companies. Indian companies are ill
    prepared to the fight fraud menace. Just 50% companies have background screening, third-
    party due diligence and other fraud prevention measures in place. In my view, India does
    not have adequately trained fraud investigators as part of the risk management teams.
    Overall, the focus is on financial statements audits and internal audits. These audits are not
    done to detect frauds
    THE INSIDE JOB

     Management finds it hard to accept this fact that internal employees and related parties
    conduct most frauds. The report mentions that insiders conducted 60% of the frauds
    globally. That is, 28% junior employees, 21% senior employees and 11% third-party agents
    conducted frauds. In India, 59% of the frauds were conducted by internal sources. The
    frauds conducted by senior employees cause more damage to the company. Not only are
    the financial figures larger, the reputation damage is huge. However, the companies in
    India still do not have adequate focus on internal controls and management controls.
    However, government has initiated some steps to address the high level of frauds in Indian
    private sector. In my view, the Indian government‘s decision to give more power to the
    Serious Fraud Investigation Office (SFIO) in the new Companies Bill is a step in the right
    direction. SFIO will be in a position to conduct more investigations, arrests, raids and
    seizures. This would put some brakes on the escalating financial fraud cases in India.
    CORRUPTION & BRIBERY IN INDIA

     The report has a special coverage on corruption in India. It shows that the 2010-2011 corruption
    and fraud cases in India – 2G telecom scam, Adarsh Society scam, CWG fraud, various land
    scams etc. – have negatively impacted India‘s reputation internationally. Last decade depicted
    India‘s growth story. The government and private sector post independence never had it so good.
    Huge investments were planned to improve infrastructure. With liberalization foreign investment
    flows increased. The sudden spurt in economy also resulted in higher greed and corruption
    soared. The cases show how senior level politicians and business heads who were much revered
    and respected compromised their ethics. As per the report, 78% of the Indian organizations have
    stated that they are highly/moderately vulnerable to corruption. In my view, this is an
    understatement; around 90- 95% of the companies are exposed to corruption. The multinational
    subsidiaries in India are also significantly affected by corruption. Though the FCPA and/or
    UKBA are applicable to them, the acts do not have much teeth in Indian scenario. In my view,
    the US/ UK authorities will be able to follow through only on the bigger cases, and the smaller
    ones will be ignored. Hence, the effectiveness of these acts is limited
     . Secondly, the developed countries have a one sided view of corruption. They prohibit
    their own country‘s companies from paying bribes. However, accept the bribe money
    deposits from Indian (and other countries) politicians and businesspersons in their
    country‘s banks. This encourages money laundering rather than curtailing corruption.
    Although, India has a Prevention Against Corruption Act, it hasn‘t reduced corruption. As
    per the act, government officials cannot receive any form of bribes or grease payments.
    However, receiving 2-10% bribe of total contract value assigned is quite prevalent. The
    India Against Corruption moment led by Anna Hazare has forced government to issue a
    strong Lokpal Bill.
    FOUR SHOCKING MISCONCEPTIONS

     ABOUT WHITE-COLLARED CRIME The most recent issue of Psychology Today has a
    short column on four major myths that are widely when it comes to white-collared crime—
    usually described as an illegal act committed for financial gain. 1. White-collared crimes are
    nonviolent—since white-collared crime is usually characterized as non-violent, many are
    prone to this myth. But criminals in general have a sense of entitlement and need for control.
    2. White-collar criminals are highly paid—you may be thinking of famous Ponzi schemers
    like Bernie Madoff or Allen Sanford here, but white-collared criminals also depend on poorly
    paid underlings. IRJC International Journal of Social Science & Interdisciplinary Research
    Vol.1 Issue 9, September 2012, ISSN 2277 3630 www.indianresearchjournals.com 164 3.
    White-collar criminals are otherwise upstanding citizens—about 40% of white collared
    criminals have a record. So, no. 4. It's all about cash—Yes, there are poorly paid white-collar
    criminals, but the mastermind of the crime could be very rich. Researchers say "peer pressure,
    company culture, and pure hubris" cause people to commit white-collared crimes.

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