Overall percentage of Corporate or White Collar crime by type of criminal act.
Ponzi Scheme Points to Overwhelming Fraud
Published Tuesday, December 16th, 2008
In the news, long time investment manager Bernard Madoff has been charged Thursday of last week for orchestrating a $50 Billion Ponzi or pyramid scheme to defraud investors. To put this into perspective, in 2005 the SEC (Security and Exchange Commission) initiated 629 investigations and obtained orders requiring securities law violators to repay approximately $3.1 Billion in penalties. The exposure so far has ranged from multinational banks, prominent hedge funds, and individual investors. As the investigations continue, the list keeps growing.
Does the SEC have adequate resources to identify this kind of crime? The agency’s compliance and examination’s office — an office responsible for detecting violations of securities law, insuring compliance and pointing out potential risk — employed 425 people as of 2007 and conducted 2400 examinations. Overall, 75 percent of investment adviser and investment company examinations and almost 82 percent of broker-dealer inspections revealed some type of deficiency or control weakness.
The SEC’s efforts to police ‘the shop’ can be seen in the number of arrests for white collar crimes gathered by the FBI and various other entities. Fraud in particular has been the most prevalent of white collar crimes as 170,200 arrests were carried in 2006. This is significantly down compared to the 16 year high in 1997 of 298,713.
U.S. Federal Bureau of Investigations: White Collar Crime - http://www2.fbi.gov/whitecollarcrime.htm
Mission: To collect, analyze, publish, and disseminate information on crime, criminal offenders, victims of crime, and the operation of justice systems at all levels of government. These data are critical to Federal, State, and local policymakers in combating crime and ensuring that justice is both efficient and evenhanded.
U.S. Federal Bureau of Investigations: White Collar Crime - http://www.fbi.gov/majcases/fraud/fraudschemes.htm
Become aware of common white collar criminal schemes.