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Published byShavonne Flowers Modified over 8 years ago
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White Collar Crime and Securities Fraud
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What is a crime? Actus reus Mens rea Higher burden of Proof – beyond a reasonable doubt
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What is “white collar crime”? Typically, a violation of law by a corporation or one of its managers. –Some waive the mens rea requirement –The “white collar” can be the perpetrator or the victim –Examples include: Embezzlement Racketeer Influenced and Corrupt Organizations Act (RICO) Wire and Mail Fraud Fraud Economic Espionage Antitrust And last but not least, Securities Law Violations
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Securities Law Violations 10(b) of the 1934 Act –10b-5 disclosure –Elements: Interstate commerce component Material Misrepresentation Scienter (mens rea) Omission in connection with the purchase or sale or securities Reliance Misrepresentation the causation of the plaintiff’s losses
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Securities Law Violations Section 17(a) – Insider trading which is trading by “insiders” – officers and directors typically – based on material nonpublic information –Not illegal if the nonpublic info is disclosed first –Tippees also sometimes insiders (derivative insiders)
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How does punishment work? –Federal Sentencing Guidelines Individuals Corporations Liability for others’ actions? –Works like respondeat superior/ vicarious liability
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What does the future hold? Sarbanes-Oxley –Increased disclosure –Increased Civil and Criminal Liability –Increased focus on Ethics
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