White Collar Crime and Risk: Financial Crime, Corruption and the Financial Crisis (Palgrave Studies in Risk, Crime and Society)

This edited collection provides an innovative and detailed analysis of the relationship between the financial crisis, risk and corruption. A large majority of the published research has concentrated on identifying the traditional factors that contributed towards the largest financial crisis since the Wall Street Crash and subsequent Great Depression. This original volume contests this, and provides the alternative view that white collar crime was also an underappreciated, and important factor. Divided into five parts: bribery and corruption; financial crime; market manipulation; technology and white collar crime; and the financial crisis, and based on contributions by a wide range of experts in the field, this book will be of great interest to policy makers and practitioners, researchers and students alike. Editorial Team 6 Acknowledgements 7 Contents 8 Notes on Contributors 11 1: Introduction 16 Part 1: Bribery and Corruption 19 2: Corruption, Development, Financial Institutions and Politically Exposed Persons 20 2.1 Introduction 20 2.2 Development, Growth and Corruption 22 2.3 Money Laundering, Corruption and the Anti-corruption Conventions 29 2.3.1 Addressing Money Laundering Through the Anti-corruption Conventions 30 2.3.2 The FATF Anti-money Laundering (AML) Regime 33 2.4 Preventing Money Laundering by Politically Exposed Persons 35 2.5 Conclusion 43 3: Anti-Bribery and Corruption: Perceptions, Risks and Practice for UK Banks 56 3.1 Introduction 56 3.2 The Origin and Meaning of Corruption 58 3.3 The Threat of Corruption 61 3.4 Extent of Corruption 62 3.5 What Is Bribery? 62 3.6 The Extent of Bribery, International Trends and Counter-Measures 63 3.7 The European Union 65 3.8 The Crime of Bribery in the UK 68 3.8.1 Anti-Corruption and Bribery Enforcement Agencies 73 3.8.2 Sentencing and Enforcement 75 3.9 Risks and Banking Standards 78 3.10 Findings and Conclusions 82 Part 2: Financial Crime 105 4: The EU Sanctions and the Fight Against Financial Crime 106 4.1 Introduction 106 4.2 Financial Regulation and EU’s Fight Against Financial Crimes: Brief History 107 4.3 The Eternal Debate: Criminal or Administrative Sanctions? 110 4.4 EU Anti-money Laundering Action and Administrative Sanctions 113 4.5 Market Abuse Sanctions 115 4.6 The Proposal for a European Public Prosecutor Office 117 4.6.1 Does the EPPO Comply with the Idea of “Better Regulation”? 119 4.7 Conclusion 120 5: Tackling the Risks of Money Laundering 125 5.1 Money Laundering 126 5.2 Risks of Money Laundering 126 5.2.1 Associational Risks 127 5.2.2 Non-derivative Risk/Risk Exclusive to Money Laundering 130 5.3 Tackling Money Laundering Risks 131 5.3.1 Criminalization of Money Laundering and Confiscation Regimes 131 5.3.2 Dismantling Secrecy: Anti-money Laundering Regulation 134 5.3.3 Other Aspects of Fortification 136 5.4 Risk, Merits and Appearances 138 Part 3: Market Manipulation 149 6: Market Abuse and the Risk to the Financial Markets 150 6.1 Introduction 150 6.2 History and Background 151 6.3 The Management of Risk 152 6.4 The Philosophical Difficulties 154 6.5 The Criminal Provisions 156 6.6 The Civil Regime and Market Abuse as a Wider Concept 158 6.7 The Difficulties of the Civil Regime 163 6.8 The Market Abuse Regulation and MAD II 165 6.9 Market Abuse Outside the CJA1993 and Part VIII FSMA 2000 166 6.10 Getting Tough 167 6.11 Conclusion 168 References 169 7: Competition Law and LIBOR in Three Jurisdictions: The United States of America, the United Kingdom and the European Union 172 7.1 LIBOR and Manipulation 173 7.2 Competition Law Provisions and Regimes of the United States of America, the European Union and the United Kingdom 175 7.2.1 The United States of America 176 7.2.1.1 Civil Public Enforcement 176 7.2.1.2 Criminal Public Enforcement 177 7.2.1.3 Civil Private Enforcement 177 7.2.2 The European Union 179 7.2.2.1 Civil Public Enforcement 179 7.2.2.2 Criminal Public Enforcement 180 7.2.2.3 Civil Private Enforcement 180 7.2.3 The United Kingdom 181 7.2.3.1 Civil Public Enforcement 181 7.2.3.2 Criminal Public Enforcement 181 7.2.3.3 Civil Private Enforcement 182 7.3 Competition Law Actions 183 7.3.1 The United States 183 7.3.1.1 Civil Public Enforcement 183 7.3.1.2 Criminal Public Enforcement 183 7.3.1.3 Civil Private Enforcement 184 7.3.2 The European Union 188 7.3.2.1 Civil Public Enforcement 188 7.3.2.2 Criminal Public and Civil Private Enforcement 189 7.3.3 The United Kingdom 189 7.3.3.1 Civil Public Enforcement 189 7.3.3.2 Criminal Public Enforcement 190 7.3.3.3 Civil Private Enforcement 190 7.4 Competition Law’s Impact on LIBOR and Post-LIBOR 191 7.4.1 How Effective Was Antitrust Regulation of Banking Activity? 191 7.4.2 Why Was the Cartel Offence Not Used in the United Kingdom? 192 7.4.3 What Policy Considerations Led to Limited Antitrust LIBOR Regulation? 194 7.4.4 Justifications for Competition Law 196 7.5 Conclusion 197 Part 4: Technology and White Collar Crime 210 8: The Financial Crisis and Digital Currencies 211 8.1 Introduction 211 8.2 Digital Currencies 212 8.3 Countries’ Regulation of Digital Currencies 214 8.4 Platform-Based Digital Currencies 217 8.5 Bitcoin 218 8.6 Financial Crisis and Digital Currencies 220 8.7 Greece 221 8.8 Advantages and Disadvantages of Using a Digital Currency for a Crisis-hit Country 223 8.8.1 Disadvantages 224 8.8.2 Advantages 225 8.9 Conclusion 226 References 235 9: Financial Crime in the Twenty-First Century: The Rise of the Virtual Collar Criminal 239 9.1 Introduction: White Collar Crime 240 9.2 The Lure of the Internet 241 9.3 The Power Balance and the Changing Conception of White Collar Crime 243 9.4 Future Virtual Collar Crime 244 9.4.1 The Internet of Things 244 9.4.2 The Sharing Economy 247 9.4.3 Cryptocurrencies 248 9.4.4 The Dark Web (and the Light Web) 249 9.4.5 Online Dating, Companionship and Revenge Porn 249 9.4.6 Algorithms 251 9.5 Virtual Collar Crime Solutions? 251 9.6 Conclusion 253 Part 5: The Financial Crisis and White Collar Crime 260 10: Is ‘This Time’ Really ‘Different’?: Reflections on ‘Risk’ in Financial Impropriety and Criminal Liability Past and Present in Looking to the Future 261 10.1 Background and Context 262 10.2 Tackling the Time and the Aphorism Head On: This Time Is Different 265 10.3 Financial Crisis and Financial Crime: New Directions and Perspectives on ‘This Time’ Being ‘Different’ 267 10.4 Financial Crime and the Potential Benefits of ‘Risk’ and Long Timeframe Analyses 269 10.5 Financial Crime and Risk: Perspectives Across Time 273 10.6 Concluding Thoughts 279 11: Corporate Crime and Corporate Culture in Financial Institutions: An Australian Perspective 289 11.1 Introduction1 290 11.2 The Problem of Corporate Culture 294 11.3 Theorising About Corporate Culture and Corporate Crime 299 11.4 Using Corporate Culture as a Legal Tool 306 11.5 Conclusions 310 12: The Financial Crisis and Mortgage Fraud: The Unforeseen Circumstances of the War on Terrorism and the Financial War on Terrorism, a Critical Reflection 322 12.1 Introduction 322 12.2 The War on Terrorism and the Financial War on Terrorism 324 12.3 The Evolution of the US Counter-­Terrorist Financing Strategy 330 12.4 The Financial Crisis and Mortgage Fraud 334 12.5 An Alteration of Policy 337 12.6 Conclusion 342 References 344 Index 354 Front Matter ....Pages i-xvii Introduction (Nic Ryder)....Pages 1-3 Front Matter ....Pages 5-5 Corruption, Development, Financial Institutions and Politically Exposed Persons (Indira Carr)....Pages 7-42 Anti-Bribery and Corruption: Perceptions, Risks and Practice for UK Banks (Umut Turksen)....Pages 43-91 Front Matter ....Pages 93-93 The EU Sanctions and the Fight Against Financial Crime (E. Herlin-Karnell)....Pages 95-113 Tackling the Risks of Money Laundering (M. Michelle Gallant)....Pages 115-138 Front Matter ....Pages 139-139 Market Abuse and the Risk to the Financial Markets (Andrew Baker)....Pages 141-162 Competition Law and LIBOR in Three Jurisdictions: The United States of America, the United Kingdom and the European Union (Richard Ball)....Pages 163-200 Front Matter ....Pages 201-201 The Financial Crisis and Digital Currencies (Clare Chambers-Jones)....Pages 203-230 Financial Crime in the Twenty-First Century: The Rise of the Virtual Collar Criminal (Alan S Reid)....Pages 231-251 Front Matter ....Pages 253-253 Is ‘This Time’ Really ‘Different’?: Reflections on ‘Risk’ in Financial Impropriety and Criminal Liability Past and Present in Looking to the Future (Gary Wilson, Sarah Wilson)....Pages 255-282 Corporate Crime and Corporate Culture in Financial Institutions: An Australian Perspective (Roman Tomasic)....Pages 283-315 The Financial Crisis and Mortgage Fraud: The Unforeseen Circumstances of the War on Terrorism and the Financial War on Terrorism, a Critical Reflection (Nic Ryder)....Pages 317-348 Back Matter ....Pages 349-372 Annotation This edited collection provides an innovative and detailed analysis of the relationship between the financial crisis, risk and corruption. A large majority of the published research has concentrated on identifying the traditional factors that contributed towards the largest financial crisis since the Wall Street Crash and subsequent Great Depression. This original volume contests this, and provides the alternative view that white collar crime was also an underappreciated, and important factor