The role of private sector organizations in the control and policing of serious financial crime and abuse

Abstract

Purpose -While the "Information Age" has provided the technological tools to "democratize" data and make it widely available to a vast audience of knowledge consumers, ironically it has also provided the materials for a tapestry of rules, regulations and processes that make it more difficult for individuals to access information relevant to both their public and private lives. The purpose of this paper is to examine the role of the private sector in the control and policing of financial crime, and provide an empirical and theoretical framework for understanding the complex tensions created by the simultaneous expansion of both data sources and technologies to collect and format data to create marketable information "products." Design/methodology/approach -Three primary methods were used to gather the data for this research. Extensive literature reviews were conducted together with an analysis of existing data bases. Finally, a number of interviews were done with various corporate managers to ascertain their views of the existing climate of regulation and/or to determine their approach to monitoring financial crime. Findings -Regarding the private sector's role in the control of financial crime, this research found five distinct roles; each with its own dynamics and implications for successful suppression of unlawful conduct. The five roles are grudging informant, enthusiastic intelligence operative, agent provocateur, cop on the take, and officer friendly. A calculus of incentives and disincentives determines which role will be adopted by the private sector. Originality/value -Since this paper was exploratory in nature, resulting in a new taxonomy of compliance types, more in depth research ascertaining the empirical validity of each type would be in order. Such knowledge can help policy makers formulate rules and regulations that will enhance public/private partnerships in the control of financial crime.

Stages of knowledge management systems in policing financial crime

“…For example, a disincentive can be found in customers who demand secrecy in their financial dealings. Gilsinan et al (2008) argue further that the temptation towards malfeasance is high when the private sector is responsible for both the provision and production of industry regulation. Behaviours change when such provision and production is linked to fraudulent activity perpetrated by individuals external to the organization and when either government resources or likelihood of success are in short supply.…”

“…Gilsinan et al (2008) argue that a calculus of incentives and disincentives determines to what extent the role of informant is adopted by the private sector. For example, a disincentive can be found in customers who demand secrecy in their financial dealings.…”

Information management for investigation and prevention of white-collar crime

“…For the investigator friendly, an incentive is external business threats from fraudulent activity by competitors. Gilsinan et al (2008) argue further that the temptation towards malfeasance is high when the private sector is responsible for both the provision and production of industry regulation. Behaviours change when such provision and production is linked to fraudulent activity perpetrated by individuals external to the organization and when either government resources or likelihood of success are in short supply.…”

“…Gilsinan et al (2008) identified this contribution in terms of five distinct roles. Each role has its own dynamics and implications for successful suppression of unlawful conduct.…”

“…• The investigator friendly is an organization that acts from different motives than the government and with different abilities, and both end up engaging in a kind of token enforcement strategy. Gilsinan et al (2008) argue that a calculus of incentives and disincentives determines which role will be adopted by the private sector. For the grudging informant, a disincentive can be found in customers who demand secrecy in their financial dealings.…”