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Behavioral dimension of convenience theory

Convenience in White-Collar Crime

Petter Gottschalk

Most theories of white-collar crime can be found along the behavioral dimension. Numerous suggestions have been presented by researchers to explain why famous people have committed financial crime. In this chapter, some of the most prominent theories are presented: differential association theory, theory of self-control and desire-for-control, slippery slope theory, and neutralization theory. Crime is not committed by systems, routines, or organizations. Crime is committed by individuals. White-collar criminals practice a deviant behavior to carry out their offenses. White-collar crime is committed by members of the privileged socioeconomic class who are using their power and influence. Offenders are typically charismatic, have a need for control, have a tendency to bully subordinates, fear losing their status and position, exhibit narcissistic tendencies, lack integrity and social conscience, have no feelings of guilt, and do not perceive themselves as criminals.

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Case studies of cross-border insider trading and market manipulation

Investigating and Prosecuting Across Borders

Janet Austin

The cases of cross-border insider trading and market manipulation that have been pursued by securities regulators over the last 10 years fall within a number of broad categories. This chapter details some of the leading cases pursued by securities regulators in relation to each of these categories. In doing so, this reveals some of highly innovative ways in which securities regulators are detecting and investigating cross-border market abuse. It also demonstrates some of the significant challenges which securities regulators face going forward in their struggle to keep the markets free of market abuse.

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Conclusion

Convenience in White-Collar Crime

Petter Gottschalk

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Conclusions and recommendations

Investigating and Prosecuting Across Borders

Janet Austin

This chapter is the conclusion and reflects upon the findings that flow from the previous chapters. It concludes that the analysis undertaken in the book reveals that the transformations to the securities markets in recent years do appear to have given rise to new avenues to engage in cross-border market manipulation and insider trading. In addition, it observes that securities regulators have taken some significant steps to improve their detection and investigative techniques and that they are steadily detecting more complex examples of these offences as a result. However, the author concludes ultimately that more can be done and as such makes some recommendations about how this might best be achieved.

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Convenience in white-collar crime

Convenience in White-Collar Crime

Petter Gottschalk

Convenience is a concept that was theoretically mainly associated with efficiency in time savings. Today, convenience is associated with a number of other characteristics, such as reduced effort and reduced pain. Convenience is associated with terms such as fast, easy, and safe. Convenience says something about attractiveness and accessibility. A convenient individual is not necessarily bad or lazy. On the contrary, the person can be seen as smart and rational. Convenience orientation is conceptualized as the value that individuals and organizations place on actions with inherent characteristics of saving time and effort. Convenience orientation can be considered a value-like construct that influences behavior and decision-making.

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Corporate social responsibility

Convenience in White-Collar Crime

Petter Gottschalk

This chapter discusses how combatting crime in general, and financial crime and white-collar crime in particular, is an integral part of corporate social responsibility (CSR), especially when crime finds its opportunity structure in the organization. White-collar crime originates and manifests itself in organizations. Organizations must carry responsibility for the negative impacts on society, for example when internal criminals are prosecuted and jailed at the expense of society. To take on CSR means to pay back to society. Payback is the opposite of creating costs to society. CSR is supposed to be a self-regulatory mechanism whereby a business monitors and ensures its active compliance with the spirit of the law, ethical standards, and national and international norms. CSR is a concept whereby companies integrate social and environmental concerns into their business operations and into the interaction with their stakeholders on a voluntary basis.

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Economical dimension of convenience theory

Convenience in White-Collar Crime

Petter Gottschalk

The motive for white-collar crime is simply financial gain. The motive for financial gain, however, can vary. Crime might be a response to both possibilities and threats, and it might be a response to both strengths and weaknesses. An offense can enable exploration and exploitation of a business or a personal possibility that may otherwise seem unobtainable. An offense can enable avoidance of business threats or personal threats. An offense can make the business or the personal situation even stronger, and it can reduce and compensate for business or personal weaknesses. Financial gain as motive for white-collar crime can either benefit the individual or the organization. If illegal financial gain benefits the individual, it is labeled occupational crime. The individual benefits personally from illegal economical gain in a setting where his or her occupation enables white-collar crime. The motive for personal financial gain can vary in terms of possibilities and threats, and strengths and weaknesses.

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Empirical study of white-collar criminals

Convenience in White-Collar Crime

Petter Gottschalk

As evidenced in this chapter, convenience orientation can be identified among convicted white-collar criminals. Their convenience orientation was frequently present in all three dimensions of convenience theory. We suggest that executives with a greater degree of convenience orientation will be more inclined to implement convenient strategies to achieve personal and business goals. If crime is a more convenient option to reach a goal, then executives with a greater degree of convenience orientation will have a stronger tendency to break the law. In this line of reasoning, the extent of white-collar crime can be reduced if executives with strong convenience orientation are identified. Executives and others in the elite who strongly dislike spending time and effort on time-consuming and complicated procedures, might be identified by implementing review procedures and surveillance mechanisms to prevent them from committing crime. Individual convenience orientation can be reduced by an increased subjective likelihood of detection. Simply stated, if you think you will get caught, you do not commit crime.

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Janet Austin

This chapter defines what is meant by market integrity and market fairness, analyses how and why they were adopted as key goals of securities regulation, how they differ from other goals and describes how the elimination of insider trading and market manipulation is necessary to realize these goals. It summarizes the literature which demonstrates the importance of securities regulators taking enforcement action against those who contravene insider trading and market manipulation laws but, at the same time, reflects upon the significant challenges involved in detecting, investigating and prosecuting these offences and how these difficulties increase if the offence is not confined within one jurisdiction.

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Janet Austin

This chapter concisely sets out the enforcement powers of the principal securities regulators of Canada, United Kingdom, United States, Australia and Germany. From interviews by the author and material published by those regulators, it then examines how the transformation of the markets have altered the nature of cross-border insider trading and market manipulation, including the types of offences that are now proliferating. The chapter also details the way in which regulators detect, investigate and prosecute insider trading and market manipulation, how they are working with their counterparts in other countries in relation to this issue, and examines some of the challenges faced by them in this regard. Some strategies are suggested which might be adopted to further improve the detection, investigation and prosecution of cross-border insider trading and market manipulation.