The History Of Entrepreneural Crime Criminology Essay

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White collar crime has been on the rise for several years, Law makers have struggled to create laws, government rulings and determining sentencing for such criminals. The numbers of crimes committed by the powerful have risen exponentially across the years and continents, so the police forces, crime-prevention agencies and legislators of the governments charged with halting these crimes have had to evolve into larger and more complex organizations also. Corporate and white collar crime covers a broad spectrum of offences, including those committed against a company, consumers and society as a whole. It is often a non-violent crime committed with intent for substantial financial gain and can be committed by an individual or even a whole organization. White collar crime involves embezzlement, money laundering, fraud, health and safety violations, environmental violations as well as sales of faulty goods and services.

The number one reason for "white collar" crime is greed. Businesses and large corporations become overwhelmed with greed which results in illegal behavior in order to acquire complete wealth and success. This creation of greed and pursuit of all the money creates a barrier between what is right and what is wrong. Greed takes us beyond control of our senses and allows for the inner devil to be exposed. In today's society, crime and corruption is all around us. Network news stations are filled with reports on local murders, shootings, robberies, and rapes. Most people are familiar with these types of crimes, but one type of crime that is on the rise and somewhat unknown by American citizens is "white collar" crime. Although all types of crimes can be damaging to all parties involved including the community, "white collar" crime can become the most costly type of crime. In the arena of white-collar crime, there exist a growing number of examples of well-educated people making business and professional decisions that violate the law.

Corporations have to be the police of their own business, when employing many people who deal with other people's money on a daily basis, can create the greed and desire to have it all. As citizens we are entrusting the professional firms to give us sound advice and trust them with the investments of our hard earned money. The actual investigations and findings of "white collar crime" can take years, and a lot of money in not only legal fee's but it can cost the business more money in investment losses. Much of the "white collar crime" stems from business that handles money, relationships with people who have money and those who would do anything to get the money. Banks and Financial business are under the most scrutiny when claims of "white collar crime' are enacted. Within the lending institution or investment company can be someone who will not be completely honest with not only the customer, investor, or even the business owner or the CEO or Boss of the dis-honest investment worker. The people who do this type of crime are called; "Entrepreneurial" this type of crime is a form of white collar crime that aims to benefit the individual rather than the corporation. Greed is generally what creates this crime to happen, Entrepreneurial crime as a concept refers to punishable acts which are committed by individuals in controlling positions within corporations, using the resources and power deriving from the corporate form as a vehicle to achieve ends which benefit the entrepreneur personally.( Friedrichs, D. O. (2010). Corporate crimes, in general, may be considered as punishable acts committed by directors or agents on behalf of the company, which benefit the company. Entrepreneurial crime and corporate crime are both forms of white-collar crime.

In the research of this type of crime one of the most recent was brought to New York in one of its biggest money thefts and one of the longest to investigate. New York's District Attorney along with others of the Federal Government have announced earlier this week that "Federal officials on Tuesday charged a former hedge fund portfolio manager and his firm with participating in a $276 million insider trading scheme, which they said was the largest insider trading case ever brought by the Securities and Exchange Commission. The office of U.S. Attorney for the Southern District of New York Preet Bharara charged Mathew Martoma with selling and shorting shares of the drug companies Elan and Wyeth, based on inside information from drug trials that had not been publicized. The scheme benefited Martoma's hedge fund by $276 million, according to court documents. Martoma was charged with securities fraud and conspiracy to commit securities fraud. He allegedly committed these crimes from 2006 to 2008, and was in federal custody Tuesday. According to the SEC, Martoma obtained inside information from a neurologist, Dr. Sidney Gilman, who was a paid consultant on Alzheimer's drug experiments by Irish company Elan (ELN) and Wyeth, a New Jersey-based subsidiary of Pfizer (PFE, Fortune 500)".( Aaron Smith (2012).

The impact of this type of crime can create many problems for everyone; Investment in the corporate sector represents a major part of the community's savings base. If these funds are not well managed, the potential for enhanced prosperity arising from these savings is diminished accordingly. Jobs are not created, confidence is eroded, and taxation benefits are not returned to the community. Factors contributing to the commission of entrepreneurial crime range from the psychological characteristics of individuals operating in a corporate culture which values risk-taking, to factors at the macro-economic level which may provide opportunities for such individuals. The thinking of the criminal in this type of crime leads to more thinking relating to repeating because of the lack of investigation and persecution. What protect the investors in this crime is the Sarbanes-Oxley Act, had it not be formed the investors of this certain crime would have suffered severely. Although it has taken much longer than expected with the investigations investigators were determined to make an arrest.

The Entrepreneurial Crimes lead us to the Sarbanes-Oxley act is the most significant corporate regulatory reform in the history of the United States. It has changed the state of how financial reporting and financial statements are reported. It was created because of increased examples of unreliable financial reporting being conducted by several big corporations who were taking their interest into account rather than the stakeholders' interest. More and more corporations working with some particular accounting firms reported false financial statements which did not show the correct state of the company and thus affected the economy as a whole. After the failure of Enron and WorldCom due to false financial reporting, the US government finally realized an Act had to be passed to prevent this from happening again and thus the Sarbanes-Oxley Act was passed. Included in the Act's many provisions were to place limits on the types of consulting services auditors could provide to their clients in order for auditors not to be auditing their own work and the requirement that company executives personally certify and sign that their financial statements are fairly stated. When an investor researches a company for potential investment, among other information gathered, much of their analysis stems from the financial statements and management's discussion and analysis as it indicates past performance, management performance, and future prospects of the company. With a large emphasis on the information presented in financial statements, one would expect that all material transactions that would affect the future of the company and its ability to continue operating at the same performance standards would be presented. Earnings and cash flow projections and performance are important to analysts as many of the valuation techniques used in the industry to report on companies employ the use of these numbers.

The Punishment for this crime is less than anyone could have imagined, and the loss of money was even more incredible. A plea bargain basically to avoid lengthy time from money making schemes, the News gave us insight on how the actions went into the law books; "Dr. Gilman has agreed to settle the SEC charges and pay more than $234,000, according to the SEC.

"As Martoma allegedly got sneak peaks at drug data, he first recommended that the hedge fund build up a massive position in Elan and Wyeth stock, and then caused the fund to shed those shares after getting a secret look at the unexpectedly bad results of a clinical drug trial," said Bharara. "And so, overnight, Martoma went from bull to bear." This allowed the hedge fund to avoid $154 million worth of Elan losses and $40 million in Wyeth losses, according to the prosecutor's complaint, and to make $59 million through short selling Elan stock and $16 million by shorting Wyeth.( Aaron Smith (2012). As heinous as the crime which for the people who have lost their money, it gets even more bizarre. Rajaratnam. The co-conspirator needs an organ transplant. He was fined 10 million dollars for his part in the scheme, and now is serving his 11 years in prison, while still having investments he cannot use his own money to pay for the transplant. The State (meaning WE the people) has to pay for the transplant, what's even more confusing is the $20,000 a year to maintain his health while recovering from the surgery. The New York state has already invested several hundred man hours, with investigators, police detectives, crime detectives and court hearings, and now support housing for all parties involved. One question everyone has asked was how is it a criminal can be allowed to have this type of surgery at the taxpayer expense when he certainly has enough of his own money to pay for it? It's against jail policy.

We as United States citizens are left with a struggling economy, failing housing, poor job creation, and now we have to pay for not only the three hot's and a cot these criminals live on, but now we pay for a kidney transplant. Because the law says if we don't, it's considered cruel and unusual punishment. The cruel and unusual punishment was the person swindling investors out of $276 million dollars. While the SEC has strict guidelines and punishment for the criminal acts these people performed, it's not stringent enough. People who commit such crimes should have all assets frozen and used to support the prison housing as well as any kind of medical attention, legal fees, court time all of the legal system aspects used should be charged to the criminal and force to pay for the allotted time. The money frozen should be used to pay back anyone who has been left as the victim, and then the prison should receive the rest. All assets should be liquidated, and in this case termination of legal issuance of any kind of documents allowing this type of criminal in our states should be abandoned. Passports dissolved, citizenship revoked and post jail term ship them back to their home country to be prosecuted there.

One of the final moments of the SEC was hitting Rajaratnam, founder of the Galleon Group, convicted in May of 14 counts of securities fraud and conspiracy for trading on information he obtained illegally. A judge ordered the convicted hedge fund manager, who is serving jail time for insider trading, to pay $92.8 million to the Securities and Exchange Commission.( Halah Touryalai (2012). Although justice may not have prevailed in many eyes, to the SEC this certainly shows a very strong case to anyone who thinks they can get away with this type of crime. The tools are getting sharper and the investigations deeper, the SEC cautions those who feel the greed.