Soft and hard strategies of regulating economic crime

Abstract

Purpose -The aim of this paper is to describe and analyse the variations used in different forms of regulatory practices in four Norwegian agencies. The crucial question is what explains the differences in regulatory approaches (from soft to hard). Design/methodology/approach -The agencies analysed are the Banking, Insurance and Securities Commission of Norway, the Norwegian Competition Authority, the Norwegian Pollution Control Authority and the Revenue Service. They represent different approaches to regulation, from the use of soft and persuasive to more hard and coercive approaches. This paper is based on research by interviews of representatives of the four agencies, and analysis of open sources (reports). Findings -Important findings are that efficiency cannot explain the preference for strategies. Among the factors influencing the use of strategies were type of harm regulated, offender type (big or small corporations, single persons), the victim (personal, non-personal or state), the political support of the regulation, the professional background of the staff and the general aim of the regulation. Originality/value -The paper is opening up a new field of research in Norway. Few, if any have studied the working of these agencies in Norway. They are important since the day-to-day regulation of white-collar crime (WCC) is mainly done by these agencies, not the police or the courts. To get a better understanding of the regulation of WCC more research should be done on the workings of the regulatory authorities.

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

“…In like manner, the high rate of settlements at the US exchanges studied may foster “conscience washing.” It is widely commented that criminal justice systems often struggle to process cases involving alleged white-collar misconduct (for example, Croall, 2004; Larsson, 2007; Kempa, 2010). On that account, settlement may be regarded as one of the best options available to exchanges.…”

“…The emphasis of private enforcement on cooperation is one of its fundamental weaknesses, assert critics. Firstly, justice is not “seen to be done”, giving rise to a sense of “two-tier” justice in some quarters (Croall, 2004; Larsson, 2007). Secondly, licensees will be tempted to “pay lip service” to regulatory compliance if they believe they will have the chance to settle “away from the cameras” if caught.…”

Asset stripping in a mature market economy

“…By 1994, when the Parliament had finally discovered the magnitude of the problem, a hard regulatory strategy (Larsson, 2007) was chosen resulting in a tightening of Danish company and tax law. The most important tightening of the rules entailed that the seller and the seller's advisors would be liable for the payment of the company's taxes in connection with the overpriced sale of a solvent shell company, which was considered an effective way of stopping the fraud (Gimsing, 1994).…”

Developments in the regulation of economic crime in Norway

“…The focus on crime in the industries has been much clearer accentuated. Many of the agencies used to view themselves more as servants and helpers, than as controllers and regulators (Larsson, 2004a, b). In Norway the movement towards privatisation of the control, as can be seen in many western countries, has not been widespread.…”

“…The use of active “police” methods in detection and investigation varies amongst the different regulating authorities. Some, like the Norwegian Pollution Control Authority, use softer more co‐operative methods while others like the IRS and the Competition Authority use harder more coercive strategies (Larsson, 2004a, b).…”