Corporate crime

Corporate crime refers to crimes committed either by a corporation (i.e., a business entity having a separate legal personality from the natural persons that manage its activities), or by individuals acting on behalf of a corporation or other business entity (see white-collar crime). Some negative behaviors by corporations may not actually be criminal; laws vary between jurisdictions. For instance, some jurisdictions allow insider trading.

Definition

The term corporate crime is similar to white-collar crime, as both involve unethical actions by those in business. However, the two terms are not synonymous. White-collar crime can apply to individuals in any occupation who commit crime during the course of their employment. Corporate crime, on the other hand, specifically refers to offenses committed by corporate officers or owners, or offenses committed by corporations themselves.

Types of Corporate Crime

Corporate crime can take many forms, including:

• Fraud: This includes financial fraud, securities fraud, and bankruptcy fraud.
• Bribery: This involves offering, giving, receiving, or soliciting something of value as a means to influence the actions of an individual or organization.
• Insider trading: This involves trading a public company's stock or other securities by individuals with access to non-public, material information about the company.
• Embezzlement: This involves dishonestly withholding assets for the purpose of conversion (theft) of such assets by one or more individuals to whom the assets were entrusted.

Impact of Corporate Crime

Corporate crime can have serious effects on a company’s reputation, leading to potential loss of business and a decrease in share value. It can also lead to significant financial penalties and jail time for the individuals involved.

Prevention

Preventing corporate crime often involves a combination of internal controls, such as corporate governance, internal auditing, and whistle-blower programs, and external controls, such as regulatory oversight and legal enforcement.

See Also

• White-collar crime
• Fraud
• Bribery
• Insider trading
• Embezzlement