Securities Fraud: The Dodd-Frank Act—Did Congress Get It Right

Abstract

The Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law to bring in the necessary provisions viewed as significant towards the improvements deemed as crucial towards reinstating confidence in the American financial sector. This law is regarded as a step in the right direction towards reducing the perceived risks of dealing in the American financial system to a minimum. The Dodd-Frank Act not only addresses the publically listed American companies but also requires that foreign private issuers disclose issues relevant to the Act though not through independent committees. The Act requires that these committees be offered with sufficient funding to meet their obligations for American companies. The Dodd-Frank Act has been lauded by economists all over as the most comprehensive financial sector reforms initiated by the US Congress since the Great Depression. The Securities Exchanges Commission has been awarded longer and stronger tentacles in the government’s efforts to curb the rising cases of fraud that have seen the investor confidence in the financial markets diminish significantly. The Dodd-Frank Act is primarily aimed at ensuring compliance by financial institutions, derivative instruments and banks within the provisions accorded by the Act. Under the Act, the SEC is more pro-active towards the prevention of fraud. Armed with more authority to enforce the provisions in the Act, the SEC now has more resources and self funding mechanisms to enable it meet statutory obligations and with greater flexibility.

Securities Fraud: The Dodd-Frank Act—Did Congress get it Right?

Introduction

In the United States, it is estimated that securities fraud targeting the civilian population amounting to nearly 39 billion dollars a year and the figure is ever increasing. Financial markets, which are mandated to oversee the activities relating to securities and commodities, have been singled out as the single most prevalent avenue through which these fraudulent schemes are perpetrated (Anand, 2011). These have had the negative effect of depressing the viability of these markets as viewed by the public due to flaws observed in their operations. In the 1990’s, the volumes of trade registered in the US securities and commodities markets grew significantly. This however led to an increase in the commission of white-collar crimes (Armstrong, 2008).

Misconduct among corporate executives, shareholders, investors and many other market players also increased along with the growth of the securities and commodities market. The investments vehicles within the securities and commodities industry have over the years grown in complexity and as such, the natures of securities fraud have become even more multifaceted (Copeland, 2010). This has been aided by the fact that these fraudulent activities have been scattered and spread to the greater public using the internet (Brejcha, Tomas & Súilleabháin, 2010).

Witty fraudsters conceal their assets and actively engage in money laundering making the recovery of assets accrued from the earnings from securities fraud both expensive and resource exhaustive (Copeland, 2010). The most worrying eventuality because of securities fraud is the fact that losses realized by victims of fraudulent securities activities are intricately complex to quantify. For example, issuers of securities have their costs for capital raised as a result of insider trading. This has the negative impact of depressing the overall economic growth of the United States of America (Copeland, 2010).

 

Size and Scope of the Dodd-Frank Act

President Barrack Obama, on the 21^st of July 2010 approved the Dodd-Frank Act, signing it into law. This was after the US Senate passed the Dodd-Frank Act on the 15^th of July 2010 (Anand, 2011). The Dodd-Frank Act is also referred to as the Dodd-Frank Wall Street Reform and Consumer Protection Act. The main aim of this Act is to strengthen the regulatory systems within the United States financial sector. This was precipitated by the near collapse of the financial markets within the United States in 2008 and overwhelming financial scandals such as the Bernard Madoff’s Ponzi scheme (Armstrong, 2008).

The United States Securities and Exchange Commission (SEC) mandated by the American Constitution to regulate the activities of the United States financial industry (Copeland, 2010). The Dodd-Frank Act on its enactment required that regulatory agencies within the United States be required to enforce reforms in their scope and size as prescribed by the Act within the year 2011 (Brejcha, Tomas & Súilleabháin, 2010).

Common Methods of Committing Securities Fraud

Bernard Madoff was the former Chairperson of NASDAQ, the greatest securities exchange in the world. The scheme was a hedge fund in which withdrawals were financed by later investors, instead of being financed profits realized from investment related activities (Brejcha, Tomas & Súilleabháin, 2010). This is regarded as one of the largest securities fraud committed by a single individual globally. The Ponzi scheme derives the term Ponzi from Charles Ponzi who duped subsequent investors by using their investments to pay for returns on investments from previous investors. It is reported that investors lost $50 billion (Armstrong, 2008).

Securities fraud has been on the rise in the United States stock exchanges where there are a number of diversified variations of fraud schemes other than the Ponzi scheme. Other fraudulent securities investments activities include pyramid schemes whereby participants encourage others to join the schemes (Brejcha, Tomas & Súilleabháin, 2010). This is the only manner in which participants are able to gain very high returns on their investments in a very short period. Money brought in by the new investors is used to pay out the returns on investments of investors who joined such schemes earlier (Copeland, 2010). They are however known to collapse faster than a Ponzi scheme as the returns on investments are relative to the amount of money invested, the more one invests the higher the rate of interest earned from the investment (Brejcha, Tomas & Súilleabháin, 2010).

Another form of securities fraud similar to the Ponzi scheme is the bubble, which is widely known to have affected the real estate markets. This occurs in a market situation in which prices are continuously increasing (Copeland, 2010). The result of the increase is attributed to the buyer’s unrealistic bidding. Buyers are willing to pay for commodities though these are overpriced. This is due to the fact that the prices are increasing and yet the buyer is interested in the commodity and has the required buying power. The bubble always bursts with investors incurring huge losses and bankruptcy (Copeland, 2010). However, it should be noted that there is no form of external misrepresentation in such a fraud and it has been noted that some of the buyers will go ahead and make similar investments even though they are aware of the fact that it is a bubble. Another securities fraud scheme is the pay Paul by robbing Peter (Copeland, 2010). In this case, debtors steal from their investors in an effort to pay other investors and or creditors (Brejcha, Tomas & Súilleabháin, 2010).

Corporate misconduct is fraud that is perpetuated by corporate officers in the high levels of the organizational structure (Copeland, 2010). The Enron saga brought to light the plight of investors as a result of corporate misconduct. The Enron saga was unearthed with the help of a whistleblower who revealed the fraudulent practices of the Enron financial officers who misrepresented the firm’s financial statements (Brejcha, Tomas & Súilleabháin, 2010).

Fraudulent individuals have been known to set up dummy corporations, which are a mirror image and name of an already existent corporation (Brejcha, Tomas & Súilleabháin, 2010). Investors are then misled to buying securities from these fraudsters unknown to them that they are buying nonexistent securities (Copeland, 2010).

Internet fraud has been on the increase as has been note in recent years, cyber criminals have been known to actively engage in schemes referred to as pump and dump. These schemes involve fraudulent and mostly false information spread and scattered in online chat rooms, online boards or through e-mail spam (Brejcha, Tomas & Súilleabháin, 2010). The purpose of these cyber criminals is to bring about a phenomenal increase in the stock prices, which are otherwise poorly rated and traded, or giving of positive ratings on the stocks of shell organizations, which are what are referred to as pumps. When stock prices of these so-called pumps increase to positive levels, the cyber criminals hurriedly dispose off holding of such in their possession making huge profits before the stock prices fall to their original value (Copeland, 2010). Buyers of such stocks are in most cases unaware of the motives behind such price increases and only realize that they have been duped after the stock prices fall. This is what is referred as dumping (Brejcha, Tomas & Súilleabháin, 2010).

Insider trading refers to the trading of an organization’s stock and related securities by individuals who work within these organizations. Officials and officers of an organization who own more than 10% of an organization’s stocks in equity perpetuate such fraud (Brejcha, Tomas & Súilleabháin, 2010). Insider trading is considered illegal when non-public financial data is acquired as the insider carries out duties within the organization and trades on the organizations stocks based on such data (Copeland, 2010).

In 2002, accountant fraud was reported to bring about a huge increase in accounting scandals which though were separate, were closely related. These were widely publicized in the US media (Copeland, 2010). Apparently, all leading accounting firms in the US admitted and charged with failure to classify and thwart publications associated with financial reports they recognized as false. This form of negligence allowed their corporate clients to publicly give misleading and falsified books of accounts (Brejcha, Tomas & Súilleabháin, 2010).

Microcap fraud affects the stocks of organizations whose market capitalization is under ¼ a billion dollars. Stocks of such companies are sold to the public through fraudulent means involving pump and dump schemes and such fraudulent activities are said to cost the US economy losses which are estimated to be in the billions of dollars (Brejcha, Tomas & Súilleabháin, 2010).

Boiler rooms are also referred to as boiler houses. These are stock brokerage firms, which are involved in placing their clients under undue pressure to trade their stocks via telesales (Brejcha, Tomas & Súilleabháin, 2010). Tactics employed by such fraudsters include activities closely related to microcap fraud. Boiler rooms are known to offer fraudulent transactions to their clients more so to clients with a profitable history with the brokerage firm (Anand, 2011). It is widely recognized that most boiler rooms operate with no valid licenses and are mainly agents of brokerage firms which can also be licensed or operates illegally. Private placements, commodities, distressed or non existent stocks, microcap stock, and stocks from fraudulent financial engineers provided at hidden markup of the principal (Copeland, 2010).

Mutual fund fraud is known to put disadvantaged customers in the stock market out of profitable trading conditions in a stock market. Mutual funds and leading stock brokerage firms employ a number of tactics which include market timing and late trading (Brejcha, Tomas & Súilleabháin, 2010). This involves the stock brokerage firms offering undisclosed arrangements with mutual funds organizations in which a window is created in the stock market to allow for the huge sums of money held by mutual funds to be invested and vice versa (Brejcha, Tomas & Súilleabháin, 2010).

In short selling abuses, stock prices are drastically reduced. This a fraudulent manner in which securities are distorted and the prices become well short of their actual stock price (Brejcha, Tomas & Súilleabháin, 2010). This portrays the wrong signal in the stock markets through the propagation of false information relative to a given stock. When companies opt to sell their stocks, they do so with the intention to borrow, however, in this form of fraud, the stock is sold with no clear intention to borrow. This is common when there are takeover arrangements between involved companies and involves the fraudulent act of collusion between or among companies (Barnard, 2008).

The Perpetrators

There has been an increase in individuals who have assumed the role of perpetrators of fraudulent activities related to securities (Brejcha, Tomas & Súilleabháin, 2010). Such perpetrators are known to employ deceiving sales techniques. The most common of these perpetrators use techniques that encourage personal contacts designed to bypass media attention. These perpetrators are known to move across various state borders and regularly shift from one fraudulent scheme to another and have perfected their activities over time (Barnard, 2008). This has made them have the capability to operate undetected and undeterred by even the most elaborate efforts employed by the Securities and Exchanges Commission. Generally, these fraudsters can be considered as career criminals and as such white collar criminals who mainly target senior citizens. However, securities fraudsters are individuals who should be considered to be more than just thieves. These individuals are mostly individuals who have been caught and charged for fraud but even after punitive sentences have been handed down to the regress back to fraudulent activities (Barnard, 2008).

In the United States of America, studies carried out have shown that most of such individuals will opt to engage in other forms of securities fraud after the original schemes have been unearthed. In one such study, 155 career white collar criminals outlined the fact that most of these individuals were white men (Barnard, 2008). Figures from the study support this fact with more than 99% of these individuals being white men and the same figure representing male individuals. 44 years was observed to be their median age with about 80% of these individuals being married. Most of these individuals were found to be well of with more than 60% of these individuals being home owners. Nearly 40% of these securities fraudsters possessed at least a single college degree (Barnard, 2008). The study also highlighted the fact that at least a quarter of these individuals had for one reason or another been arrested for some unlawful violation before they committed their initial unlawful securities violation (Brejcha, Tomas & Súilleabháin, 2010).

Securities fraudsters have some traits that are common among them. Intellectual dexterity, this includes being quite verbally crisp and are quick to make up a story plausible enough to dupe the victim with the right mood of sincerity (Glovin, 2011). Skills in the art of deception is another common trait, these individuals are basically pathological liars and effectively do so over a prolonged period of time (Barnard, 2008). These individuals have been so successful by mastering ways to conceal leakages and optimize on the credibility concerning their deceit

Securities Fraudsters portray to their victims a character that is both trustworthy and honest. This is done in a number of ways ranging from controlling how they expose their emotions through body language, exploiting ties natured through continued association with the victims, playing with words around an actual story, studying the victims fears and arraying such fears among a host of other techniques (Glovin, 2011). They also go on engaging in fraudulent activities knowing that they may get caught and are apt at assessing the risks of their unlawful endeavors. Securities fraudsters are known to keep abreast with developments in the business world and have a keen sense for business (Barnard, 2008). They also have the skills to recognize, exploit and encourage the victims urge to reap quick profits though a high sense of intuition and sensitivity (Brejcha, Tomas & Súilleabháin, 2010). Fraudsters are also known to believe that they are intellectually superior compared to their victims and lack any sense of remorse as to the plight of the victim. Knowledge of the internet is one of the gateways through which securities fraudsters ensure that victims are ensnared involving identity theft and black hat hackers (Glovin, 2011).

With affluent Americans seeking to increase their investments in the financial markets as a means to improve their financial status, securities fraudsters have become a common menace (Brejcha, Tomas & Súilleabháin, 2010). These are individuals who regress back to fraudulent activities as much as the SEC catches up with them. Most of theses individuals have been diagnosed with personality disorders such as Antisocial Personality Disorders (Barnard, 2008).

Statutory Law

A series of statutes are what comprise the Federal Securities Laws. These statutes give authority for regulations promulgated by the US government agency, the SEC with the mandate to oversee the activities of the extensive securities industry (Glovin, 2011).  Before June of 2010, there existed the Securities Act of 1933 and the Securities Exchange Act of 1934 in the Federal Securities Law (Anand, 2011).  The Act of 1933 was drawn up to govern the issuance related to securities by publically listed companies. The Act of 1934 on the other hand was drawn up to enhance the governance in the sale, purchase and trade of securities (Glovin, 2011).

On the 21^st of July 2010, the Dodd-Frank law was signed into law with the primary role of creating an independent watchdog commission for the securities market with its head quarters at the Federal Reserve (Anand, 2011). The Commission is mandated with the authority to ensure that the American public is provided with transparent and accurate information with regards to mortgages, financial instruments and pro-actively protect them from any hidden fees, retrogressive terms and fraudulent practices (Anand, 2011).

 

Regulatory Provisions

The Dodd-Frank Act is a comprehensive statute with more than 50 provisions in Titles X and XIV of this Act.  Section 1022 confers to the Consumer Financial Protection Bureau authority with regards to rulemaking, supervision and enforcement over a wide range of consumer financial services and products (Anand, 2011). Among the provisions in the Act is the protection of whistleblowers from retaliatory actions by companies, for which they make disclosures regarding securities fraud, misleading financial reporting and misconduct by executive officers (Anand, 2011). The Act also provides incentives for whistleblowers to voluntarily disclose information to the SEC concerning any securities malpractices. Whistle blowers are entitled to up to 30% of the monetary sanctions imposed on companies and this will be funded through the SEC investors Protection fund (Copeland, 2010).

Provisions in the Act allow the Commission to carry out fiduciary studies aimed at appraising the effectiveness of existing securities market standards with regards to the care accorded to investment advisers, brokers and retail consumers (Copeland, 2010). Most retail investors are not aware of the brokerage agreements in which they enter and as such some of the agreements may require the mandatory application of pre-dispute arbitration.   The Act allows the SEC to limit and also prohibit such clauses with the investor being allowed to go either for arbitration or courts of law (Copeland, 2010).

The Dodd-Frank Act also provides for the Office of the Investor Advocate in the SEC to advice the retail investor on problems they may come across when dealing in the financial markets (Brejcha, Tomas & Súilleabháin, 2010). The Act provides the Securities Investment Protection Corporation, SIPC, which bails out brokerage firms fails to account for investor assets missing for the investor accounts. The ceiling has been increased to $250,000 as cash advances (Copeland, 2010). There are also a number of other provisions in the Act that increase protection accorded to investors through means either direct or indirect. Hedge funds and derivatives traded over the counter are to be regulated and registered with the Securities and Exchange Commission. The ACT has accorded the SEC with authority to bar unlawful practitioners from migrating from one sector of the securities market to another (Barnard, 2008).

Other than regulating, the American financial industry the Act also makes provisions for requirements necessary for reforms in corporate governance, reforms in the securities and commodities market as well as disclosure requirements, which relate to duly registered public companies (Brejcha, Tomas & Súilleabháin, 2010). The Act also touches on the mode of operations of Canadian corporations with securities registered and actively traded within the US financial markets (Barnard, 2008). As for foreign private issuers, the Dodd-Frank Act does not affect their financial activities and relevant disclosure of financial reports (Copeland, 2010). However, there are significant changes relative to the United States proxy rules. These changes encompass issues such as those that relate to executive compensation and the disclosure of such matters. This also relate to the permitted proxy access relevant to protect the shareholders from incidences of fraud. The United States proxy rules do not affect foreign private issuers and as such changes made in the proxy rules do not affect FPI’s (Barnard, 2008).

There are however, some provisions within the 2300 page Act that will directly have a profound effect on the foreign private issuers and the various non United States issuers (Barnard, 2008). These provisions include limits set on discretionary voting by stock market brokers; beneficial ownership will be affected by in changes that will dictated the reporting criteria; protections and monetary incentives accorded to whistleblowers; reforms targeting agencies mandated to offer credit rating services; and new requirements based on the disclosure directed towards issuers within the mining industry (Green, 2010).

There is a provision within the Dodd-Frank Act that mandates compensation committees that act independently to ensure that all public companies should be compliant with the stated provision. This affects the foreign private issuers although they are permitted to meet the Act’s requirements for appropriate disclosure (Brejcha, 2008). On the other hand, publically listed companies are required to comply with the substantive requirements as provided under the Act. The SEC has always had the authority to bring to book perpetrators aiding and abetting securities fraud (Green, 2010). The Act has given SEC more legal authority to encompass conduct that is deemed as reckless. The requirement that the SEC has to show beyond reasonable doubt that the abettor or aider of a fraudulent claim had prior knowledge of the fraud is no longer mandatory under the Act (Anand, 2011).

Under the Exchange Act, the Dodd-Frank Act empowers the SEC to follow up on Control Persons (Barnard, 2008). This provision is relevant to major shareholders, directors and senior officers of publically listed entities who fall under the scrutiny of the Securities and exchanges commission (Brejcha, Tomas & Súilleabháin, 2010).

SEC’s jurisdiction has been expanded to include extra-territorial violations against the Exchange Act, the IAA and the Securities Act (Anand, 2011). This involves fraudulent transactions in securities outside the US borders even if the involve investors of foreign countries only (Copeland, 2010). This is especially the case when the fraudulent activities are viewed as having a crucial and critical effect on the US financial sector no matter how small (Green, 2010).

The IAA, the ICA, the Exchange Act and the Securities Act have been amended under the Dodd-Frank Act in an effort to allow the Securities and Exchange Commission to acquire monetary penalties from culprits coupled with the cease and call to a halt orders through administration actions of the SEC (Barnard, 2008). The Act allows for the SEC to raise the monetary fines by 50% and without judicial process in a Federal court. This is a provision that is seen as a means through which the administrative processes of the SEC will remove the legal procedures that use up limited time resource (Anand, 2011). This will increase the enforcement capabilities of the SEC.

The Dodd-Frank Act has imposed deadlines on the Commission regarding the time frames within which the Commission is expected to have duly completed enforcement investigations inspections and examinations with compliance to the provisions provided for by the Act (Barnard, 2008). Critics have viewed this as a sure means with which the Commission will have a more aggressive approach towards the examination on compliance with regards to the Act and subsequent enforcement (Brejcha, 2008).

The Dodd-Frank Act provides for a national subpoena authority to any fraudulent securities activities presented in a district court in any judicial district. Defendants and the Commission will greatly benefit from this provision (Copeland, 2010). However, it is viewed as an inconvenience to witnesses, directors of the involved entities and former officials required to testify in such proceedings. This is so due to the perceived distance these individuals may have to travel to meet the requirements of the SEC and other regulatory bodies as prescribed by the Act (Anand, 2011).

In an effort to enhance the performance of the Commission, the Act has provided for the Commission to share what is considered as privileged information with other foreign authorities. This will be done without the need to consider the waiver of any privileges that are viewed as protecting the information shared (Barnard, 2008).

The goals laid out in the Act require a capital-intensive approach by the Commission (Green, 2010). To be able to meet its statutory obligations it was deemed necessary for the law makers to provide the SEC with better and more appropriate means with which to fund its operations and personnel. The budget proposed by the Act requires that the SEC’s budget be supplemented by an extra $1.3 billion (Copeland, 2010).

Case Study

A hedge fund’s operations are different in many respects as compared to the operations of mutual funds. The government does not as heavily regulate hedge funds as mutual funds. They have barrier that make it more cumbersome for investors to overcome for entry. Fewer regulatory requirements enable hedge funds generate returns that are considerably higher as compared to mutual funds (Armstrong, 2008).

On the 12^th of December 2008, Bernard Madoff, the then chairman of stock market NASDAQ was arrested on charges of massive fraud (Armstrong, 2008).  Bernard Madoff had for years run a Ponzi scheme in which investments made towards the scheme by new investors were used to pay existing investors false and irregularly high incomes to existing investors. The Ponzi scheme run by Bernard Madoff was estimated to be worth $50 billion and the SEC though aware of the scam was disregard by the Commission (Green, 2010).

Poor regulatory measures by the US government led the market players to come up with the means with which to protect investors from fraudulent outcomes of the hedge funds (Barnard, 2008).  Due diligence outfits were formed to investigate and advice potential investors on the trustworthiness of such hedge funds. Potential investors for Madoff’s hedge fund hired one such outfit, Aksia LLC. Meticulous investigations produced a series of red flags on the Madoff led hedge fund. Aksia therefore advised all their clients to desist from investing in the Bernie Madoff hedge fund (Armstrong, 2008).

The above case led the American Free Economy to realize that the SEC was ill equipped to protect the US investors and failed to investigate a whistleblower’s warning on securities fraud (Armstrong, 2008).  Investors were clearly defrauded of their investments in credit default swaps, mortgage oriented securities and collateral debt obligations as a result of the infamous housing bubble. This led Congress to acknowledge that the SEC needed to bite other than to bark so as to protect the American investor from securities fraud. Thus was the outcome that is the Dodd-Frank Act (Barnard, 2008).

Conclusion

            The Dodd-Frank Act is seen as a sure means with which the SEC and other regulatory bodies will have the necessary statutory backing to root out fraudulent activities by publically listed companies, the staff and executive officers.  It is one of the most comprehensive Laws provided for the protection of the American investor.

 

References

Anand, S. (2011). Essentials of the Dodd-Frank Act. Volume 63 of Essentials Series. Hoboken: John Wiley and Sons.

Armstrong, B. (2008). Madoff and the Failure of the SEC. Retrieved on 7 July, 2011 from: http://mises.org/daily/3260

Barnard, J. W. (2008). Securities Fraud, Recidivism, and Deterrence. Retrieved on 7 July 2011, from: http://scholarship.law.wm.edu/facpubs/161

Brejcha, B. L., Tomas, J. P. & Súilleabháin, K. Ó. (2010). The Dodd-Frank Act: Implications for Federal Securities Litigation July 2010. Retrieved on 7 July 2011, from: http://www.bakermckenzie.com/files/Publication/e2e15f25-4bba-41de-a7b5-2fccd65d82dd/Presentation/PublicationAttachment/4210bc60-14af-4ad7-afdc-3608a355ed1b/al_dr_doddfrankactimplicationsfederalsecuritieslitigation_jul10.pdf

Copeland, C. W. (2010). The Dodd-Frank Wall Street Reform and Consumer Protection Act: Regulations to be issued by the Consumer Financial Protection Bureau. Retrieved on 7 July 2011, from http://www.fas.org/sgp/crs/misc/R41380.pdf

Glovin, D. (2011). SEC Accused of Negligence in Bernard Madoff Ponzi Victim Lawsuit. Retrieved on 7 July, 2011 from: http://www.businessweek.com/news/2011-01-26/sec-accused-of-negligence-in-bernard-madoff-ponzi-victim-lawsuit.html

Green, L. (2010). Dodd-Frank: Whistleblowers, Claw backs, and Morrison Developments.            Retrieved on 7 July 2011, from:

http://blog.riskmetrics.com/slw/2010/11/dodd-frank-whistleblowers-clawbacks-and-morrison-developments.html

 

Appendix

Black hat hackers- Unethical computer systems hackers

Control Persons- These are officers such as the CEO, the CFO, senior management and members of the board of directors.

Derivative instruments- This is a financial instrument deriving its value from the value of other financial variables or instruments.

Foreign private issuers- These are foreign issuers other than foreign governments.

Fiduciary- Under law, these are individuals entrusted with the property and or power for the benefit of some other individual.

Investments vehicles – Refers to bonds, stocks or other options in which an investor can place money or property with the view of making an income.

Great Depression- The most severe and longest period of economic depression ever experienced in the western world.

White collar crimes- Crimes committed by persons of high social standing while carrying out their professional obligations.