The phrase “white-collar crime” refers to nonviolent crimes that are typically perpetrated for monetary gain. According to the FBI, “these crimes are characterized by deceit, concealment, or violation of trust.” These offenses are typically inspired by either gaining cash or avoiding losing money, property, or services. Nevertheless, they may also be inspired by a need to secure a personal or business advantage.
The term itself is described as a “crime committed by a person of respectability and high social status in the course of their occupation.” Historically, white-collar employees have been specified by office jobs and management, while blue-collar employees traditionally wore blue shirts while laboring in more physically demanding jobs.
White-collar crimes have increased exponentially as technology and financial developments have created new means of committing such crimes. Further, the internet facilitates multiple new white-collar crimes, such as fraudulent emails requesting help by sending a substantial amount of money.
Some definitions of white-collar crime only include offenses by individuals to benefit themselves. However, the FBI defines these crimes as including “large-scale fraud perpetrated by many throughout a corporate or government institution.” The agency names corporate crime among its highest enforcement priorities because these offenses cause substantial monetary losses to investors. Further, the FBI states that these crimes have the potential to cause significant harm to the U.S. economy, as well as investor morale.
What Else Should I Know About White Collar Crimes?
Government prosecutors prosecute most white-collar offenses. Prosecutors consider the nature of the crime and facts obtained from the arresting officers’ police reports to determine what charges to file.
For felony white collar crimes, prosecutors sometimes have grand juries make the charging determinations. These are 15-23 randomly selected individuals who view the evidence and decide what charges should be filed. At the same time, the prosecution and defense both collect evidence and prepare for hearings and trial.
In terms of legal penalties for white-collar crimes, different punishments may be imposed:
- Compensation payment to victim;
- Community service;
- Criminal fines;
- Incarceration in either jail or prison, depending on whether the crime is a misdemeanor or a felony; and/or
- Probation.
What Is the Foreign Corrupt Practices Act?
The Foreign Corrupt Practices Act (FCPA) is a federal regulation involving foreign business activities in the United States. The Act seeks to deter corrupt foreign practices by penalizing instances of bribery. The Act also defines how businesses with securities must maintain proper and translucent records following the Securities Exchange Act of 1934.
The Foreign Corrupt Practices Act (FCPA) is predominantly a concern for large, multinational firms. Due to their interactions with foreign officials, such companies are inclined to disregard FCPA’s anti-bribery provisions. Multinational firms that issue stock should also comply with FCPA requirements involving foreign issuers of securities.
Congress created the Foreign Corrupt Practices Act (FCPA) during the 1970s to stop U.S. companies from offering bribes to foreign officials. The Act was amended in 1977 and again in 1998 to enlarge the scope of its anti-bribery provisions.
What Is Securities Fraud Law?
Securities fraud is any fraud used in connection with the sale of a security. It is similar to spoofing. The regulation is intended to stop anyone from using a scheme to defraud, make untrue statements, or fail to make a statement that deceives investors. It can also include theft from manipulating the market and theft from securities accounts.
How Can an Investor Make a Claim?
In order to have a claim for securities fraud, an investor must rely on the information given, and they must suffer some harm. The fraud must also affect interstate commerce to fall within federal securities fraud laws, but this can be as simple as giving information over the telephone or the internet. Further, individual states may have their own securities fraud laws that apply.
What Does the FCPA Prohibit?
Under the anti-bribery provisions, the Foreign Corrupt Practices Act forbids US-based individuals and organizations from paying foreign officials in order to further business interests. The Act also prohibits making bribes to foreign issuers of securities through its amendments.
The FCPA Mandates Accurate Books and Internal Controls
In addition to the anti-bribery provision, the FCPA requires companies with securities listed in the U.S. to abide by specific accounting provisions. Such companies must:
Make and keep books (and other records) reflecting fair and accurate corporate transactions.
Develop and maintain an internal accounting system.
These provisions demand companies develop adequate accounting compliance and oversight systems and abide by their disclosure and due diligence duties concerning corporate transactions.
Can a Small Business Violate the FCPA?
Although the FCPA generally applies to large companies, the Act’s provisions also apply to small or mid-sized companies that engage in business activities with a foreign official. Even the actions of people may transgress the FCPA.
As commerce in the global economy becomes increasingly achievable, small companies that deal with foreign partners abroad need to become attentive to the provisions of the FCPA.
Although the FCPA most often applies to the activities of large, international corporations, even small businesses can violate the FCPA.
How Can My Business Comply with the FCPA?
To comply with the anti-bribery provisions in the FCPA, you or your company should not encourage bribes or any form of unethical payment. You are not permitted to pay a foreign official to further business activity.
Small companies are more likely to become unwitting targets of crooked solicitations because many of their business activities may be done under the radar. Also, since a small business may lack a cultured management team, it may become a perfect target for corrupt local officials.
Who Enforces the Foreign Corrupt Practices Act (FCPA)?
While the U.S. Department of Justice (DOJ) is the immediate enforcer of the Foreign Corrupt Practices Act (FCPA), the Securities and Exchange Commission (SEC) also has the power to coordinate the Act’s enforcement.
The Department of Justice may implement the Act with different criminal sanctions, such as criminal fees and imprisonment. The Securities and Exchange Commission may impose miscellaneous civil penalties.
What Are the Penalties for Violating the FCPA?
The penalties for disregarding the FCPA range from fines to imprisonment. Penalties cover both companies and people. Here are some penalties that FCPA violations may trigger:
- Individual liability resulting in a prison sentence of up to 5 years
- Suspensions from various government contracting programs
- Criminal fines (up to $2 million for a company and up to $100,000 for an individual)
- Up to $100,000 of civil fines (both for a company and an individual)
- Disgorgement of the violator’s pecuniary gain
- Additional civil fines of up to $500,000 for companies and $100,000 for individuals
Note that indemnification by the company is not possible for people found guilty of violating the FCPA.
Are There Any Defenses to FCPA Liability?
Several defenses may be presented against an FCPA violation.
For instance, you can claim that:
- The payment only facilitated a non-discretionary action by the foreign official (“grease payment”).
- The payment was lawful under the country’s laws where it was made (very rare nowadays).
- The payment was reasonable and for a minimal purpose.
- You lacked the necessary criminal intent.
Seeking Legal Help
A qualified criminal attorney can help you understand FCPA compliance issues. If you may have violated the Foreign Corrupt Practices Act, an attorney can help you develop a defense for your case. Use LegalMatch to find the right lawyer for your needs today.
