What is a credible deterrence? Is it effective in preventing rouge trading? Credible deterrence is one of the objectives of Financial Conducts Authority (FCA) to discourage wrongdoers (firms and individuals) from committing future offences in the financial industry and deter other businesses and individuals from committing similar faults, by imposing sanctions such as, civil actions, criminal prosecution, fines, prohibitions and publication of wrongdoings. This essay will focus on fines as one mechanism of deterrence and examine its effect on firms and individuals, considering the goal of FCA in attaining ‘credible deterrence’ to ensure compliance. Peat and Mason, emphasises on the importance of fines in realizing credible deterrence by showing different cases whereby The Financial Services Authority (FSA) predecessor of FCA, imposed fines on firms and individuals in the event of lax supervisions and unauthorized trading. However, fines as a mechanism to deter violation of law has …show more content…
This may be because the organization does not have the means to set controlling mechanisms or is negligent to put strict standards in place. Hence, it is debatable if the objectives of deterrence can be met where infringement is attributable to lax control or negligence and is not derived with the motive of the firm seeking profit. Nonetheless, fines could deter firms that could be regarded as ‘amoral calculators.’ Although, even in the case where such behaviour is exhibited, credible deterrence can be achieved if the fine is high enough to discourage the firm from taking it as an affordable corporate cost. Even so, this raises concerns in determining what could amount to higher fines. Hence, it is argued fines should be proportionate to the wrong committed or done. In relation to this, the FSA has been criticised for imposing pity fines which does not serve the purpose of
The size of the company has a fluctuating impact on the ramifications of the law administering the inconvenience of risk on companies. The thought of forcing the liability is unique in relation to the worry of distinguishing the tenet, which will be connected to the case. In specific cases, it might be an improper law to carry out cases, which lacks the foundation of criminal liability of the company involved within the case. Big companies have a convoluted chain of command, which has multilevel frameworks inside the
...efits from adopting unfair business practices and discouraging competition are much higher than the expected penalty and punishment. With changing time, there is need to make these laws more effective and relevant.
The integrated threat theory model consists of four types of threats that can lead to prejudice. These threats are: realistic threats, symbolic threats, intergroup anxiety, and negative stereotypes. Realistic threats are posed by the outgroup and have several types of consequence and impact. They can either be threats of war, threats to political and/or economic power of the ingroup, and threats to physical and/or material well-being of the ingroup and its members. Symbolic threats is usually based on perceived group differences in morals, values, standards, beliefs, and attitudes. Symbolic threats are also threats to the ingroup’s worldview and these threats arise because the ingroup believes that its system of values are morally correct.
Throughout history there have been many white collar crimes. These crimes are defined as non-violent and financial-based crimes that are full ranges of fraud committed by business and government professionals. These crimes are not victimless nor unnoticed. A single scandal can destroy a company and can lose investors millions of dollars. Today, fraud schemes are more sophisticated than ever, and through studying: Enron, LIBOR, Albert Wiggan and Chase National Bank, Lehman Brothers and Madoff, we find how the culprits started there deception, the aftermath of the scandal and what our country has done to prevent future scandals.
Analyzing the Argumentative Article “Let’s Be Clear, There is No Surviving a Nuclear War” The debate over if humans can survive a nuclear war or not is an interesting topic. The article, “Let’s Be Clear. There is No Surviving a Nuclear War,” is written by James E. Doyle and Ira Helfand. The article was posted on Newsweek.com on August 20, 2015.
Chronologically the North Korean Nuclear Program stems from the early 1950s; however, the program has its deeper origin back in 1989 during the conclusion of the Cold-War era. The year 1989 marked the deterioration of the Union of Soviet Socialist Republics (USSR) as the primary financial supporter of North Korea. The North Korean nuclear program can be simplified into approximately four different phases over time; moreover, the chronologies of these four main phases predominantly address the unresolved tension between the United States of America and North Korea. This timeline also involves the influences of the other participants of the Six-Party Talks (which comprises of and is not limited to China, Russia, South Korea, and Japan). From 1956 to 1980 phase one was first and foremost the preparation and gathering of scientific knowledge to advance nuclear measures. Then from 1980 to 1994 phase two dealt with the progression and subsequent disruption of North Korea’s national plutonium manufacturing program. The years 1994 to 2002, or phase three, are the overlapping periods of the nuclear freeze that halted domestic production of radioactive material for military purposes. Finally phase four (from early 2002 to current times) covers the present concerns for North Korea returning to nuclear programs.
The 2002 crime figures for England and Wales comprised of two separate reports, brought together for the first time: (i) Crime statistics recorded by constabularies and (ii) The British Crime Survey (BCS), based on 33,000 interviews. The BCS is regarded as a more reliable measure of actual levels of crime because it includes experiences of crime that go unreported. The British crime survey of 2002 revealed:
After a case like Enron, it is easy to be pessimistic about the prospects for change that could effectively prevent corporate crime. The ideas presented in this paper suggest that regulatory agencies can play a fundamental role not only in encouraging compliance with the law, but also deterring corporate crime. It is clear that corporate crime has substantial effects on its victims, yet corporations or their executives are not always held accountable for their actions. Compared to criminal prosecutors, regulators have more knowledge and resources to monitor corporations and potential offenders better understand the penalties associated with regulation. For these reasons, the power of regulatory agencies to monitor business practices should be increased.
With the increasing number of undocumented immigrants crossing the U.S.-Mexico border illegally, the U.S. border patrol sought new strategies to prevent more illegal crossings. In the early 1990s, Prevention Through Deterrence was a new strategy created by the border patrol in hopes to deter immigrants from crossing the border (Henderson 130). This new strategy started with Operation Blockade and with Operation Gatekeeper following right after. In Timothy Henderson’s Beyond Borders, and Jason De Leon’s The Land of Open Graves, they both discuss the positive effects of the border patrol’s Prevention Through Deterrence strategy, but also address how the strategy didn’t prevent immigrants from crossing the border, but rather shifted the traffic of immigrants into rural areas, putting their lives in danger. Prevention
In 2008 the worst financial crisis since the great depression hit and left many people wondering who should be responsible. Many Americans supported the prosecution of Wall Street. To this day there have still not been any arrests of any executive on Wall Street for the financial collapse. Many analysts point out that greed of executives was one of the many factors in the crisis. I will talk about subprime loans, ill-intent, punishments, and white collar crime.
Contingency Theory “Contingency theory is a class of behavioral theory claiming that there is no best way to organize a corporation, lead a company, or make decisions” (Pfeffer, 1997). There is no simple or one right way to run things. In the 1950’s and 1960’s, two men named Henri Fayrol and Frederick Taylor continued the study of contingency theory. Research in the 1970’s dealt with the organizational structures and leadership styles for different situations (Thompson, 2005).
...ur; in such cases, competition authorities must act to fight unlawful practices that are detrimental for the economic welfare.
There are several aspects within deterrence that are important to understand when discussing the theories of deterrence and labeling. According to the deterrence theory, there are two different classifications of deterrence—specific and general. First, specific deterrence is defined as apprehending an offender and punishing him or her which will refrain them from repeating crimes if they are caught and punished by the criminal justice system (Akers and Sellers, 16). Secondly, general deterrence is defined as the states way of punishing society for a crime that they have not committed, while using a certain group of people who have committed that crime. By doing so, those who are in charge of punishment, inflict fear on members
...t for illegally profit, the consequences will be unfavorable; therefore, a decision has to be made in order to protect the rights of the original owner and the responsible party must be held responsible for any infractions.
Recently, three individuals were awarded $170 million for helping investigators gather a record $16.65 billion penalty against Bank of America. Based on their action of inflating the value of mortgage properties and selling defective loans to investors. By influencing the market falsely is unethical and wrong. That is also why their punishment was so harsh. Firms today warn their managers and employees that failing to report unethical behavior and violations by others, could get them fired.