1. White Collar Crime and Securities Fraud

2. What is a crime? Actus reus Mens rea
Higher burden of Proof – beyond a reasonable doubt

3. 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

4. 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

5. 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)

6. So what’s been happening lately?

7. How does punishment work?
Federal Sentencing Guidelines
Individuals
Corporations
Liability for others’ actions?
Works like respondeat superior/ vicarious liability

8. What does the future hold?
Sarbanes-Oxley
Increased disclosure
Increased Civil and Criminal Liability
Increased focus on Ethics