Financial crime – is there any way out of the theoretical deadlock?

Abstract

Purpose This paper aims to approach fundamental topics of financial crime and the law. What does constitute financial crime? Which field of law is best suited to address the threats of transgression by financial executives? What does motivate highly rewarded financiers to become white collar criminals? Design/methodology/approach To answer these research questions, contemporary theories of criminology in general and of white collar crime in particular, as well as theories on motivation, are critically discussed. Benefits and limitations of the theories in use are exemplified on the background of the London Interbank Offered Rate (LIBOR) scandal. Findings The paper criticises that the state-of-the-art theories are not able to embrace financial criminality in its entirety. A provoking pace for further research might be that of psychopathic disorders among white collar criminals. Thus, white collar crime maintains its challenging character. Originality/value This paper provides a thorough testing of multidisciplinary theories that emerged over the past decades against the recent LIBOR scandal. The research questions addressed and the methodologies applied provide a framework for the assessment of the prevailing theories against other financial scandals.

How effective are the enforcement activities of derivatives exchanges in the digital age? A survey of enforcement notices through the lens of humans

“…Financial market misconduct: balancing public and private approaches Billed as a "growth area" of research (Cumming et al, 2015), financial market misconduct is both elastic (Yadav, 2016) and unquantifiable (Cumming et al, 2018). Often faced with an inequality of arms (financial resources and expertise) public law enforcement agencies JFRC 32,3 struggle to detect (Gottschalk and Glasø, 2013) and prosecute corporate misconduct (Eisenberg, 2017). Incentives to self-report violations are seldom acted upon (Soltes, 2019).…”