Exam 1: III

Question 1

Examples of WCC/CC before 1900s, it involved mainly _____ _______/__________ crimes

Answer 1

stock market/financial

Question 2

Examples of WCC/CC before 1900s:

Much of American industry was built on __________ ______.

Answer 2

financial scams

Question 3

What happened during Wall Street’s First Scandal in the 1790s?

Answer 3

William Duer
¨ Quit as Assistant Treasury Secretary
     and…
          ¨ Audit
¨ Alexander Hamilton’s role

Question 4

What happened during The Civil War Era & The Robber Barons?

Answer 4

JP Morgan - American banker and financier
What he did:
¤ Gold speculator
¤ Rifles

Question 5

Early 1900s: _______ starts playing a major role

Answer 5

Theodore Roosevelt

Question 6

Who is Charles Ponzi?

Answer 6

Poor Italian immigrant, came to U.S. in early 1900’s

Question 7

What is a ponzi scheme?

Answer 7

Promised investors money, but used money for other investors

Question 8

What was the punishment for Ponzi?

Answer 8

5 years in federal prison after attempt to flee country, served 10 years and then deported to Italy

Question 9

What happened between the 1930s and 1940s in WCC?

Answer 9

Securities Act (1933)
¨ Securities Exchange Act (1934)
¨ Sutherland begins writing
about WCC

Question 10

Why didn’t Sutherlands’ writings in the 1940’s gain much traction?

Answer 10

at the time people trusted the government

Question 11

What is the securities act (1933)?

Answer 11

federal regulation of stock markets and federal regulation of public company

Question 12

See rise of __________ and _____________ __________
beginning in the 1960s
¤ Social unrest—government lacks legitimacy
¤ More interest in White Collar and Corporate Crime
Academically
Enforcement

Answer 12

consumer

environmental activism

Question 13

See rise of consumer and environmental activism
beginning in the 1960s
¤ _______ ______—government lacks legitimacy
¤ More interest in _____ ______ and __________
Crime
Academically
Enforcement

Answer 13

Social unrest
White Collar
Corporate

Question 14

Who is Ralph Nader?

Answer 14

-Wrote Unsafe at Any Speed (1965)
about ¨ Chevrolet Corvair tire pressure

-Was for Consumer-advocacy groups

Question 15

What happened during the 1970s WCC?

Answer 15

1970: 1st Earth Day
1974: Campaign Regulation and Foreign Corrupt Practices Act

1979: Clinard and Yeager study of corporate crime
¤ Funded by Justice Department

Question 16

The 1980s were known as “The _____ Decade”

Answer 16

The Greed Decade

Question 17

The 1980s wcc looked like?

Answer 17

Unprecedented amounts of WCC

¤ Insider-trading/stock manipulations

Question 18

Why was there so much wcc in the 1980s?

Answer 18

reagonomics- trickle down economics

culture- focused on goods, status, wealth

Question 19

What were the sentencing guidelines developed in the mid 80’s and early 90’s?

Answer 19

1984: individual crimes
1991: organizations

Question 20

The 1990s were known as “The _________ Decade”

Answer 20

The Betrayal Decade

Question 21

Why were the 1990s called The Betrayal Decade ?

Answer 21

People were using positions of trust to deceive and betray

Question 22

Economic growth in the 1990s meant that?

Answer 22

financial crimes aren’t really that much of a law enforcement priority

Question 23

During the Betrayal Decade (1990s), good enforcement efforts were put into what other domain (not involving wcc)?

Answer 23

1) defense contractors
2) Exxon oil spill
3) Health care fraud

Question 24

Who was responsible for the Exxon oil spill?

Answer 24

Exxon Valdez

Question 25

What’s the Exxon Oil Spill?

Answer 25

March 24, 1989—tanker grounded in Prince William Sound

Question 26

What was the punishment for the Exxon oil spill?

Answer 26

Guilty Plea= paid a criminal fine of $100 million

2008 Supreme Court Decision= reduced it to $507.5 million

Question 27

2008 annual profit for Exxon?

Answer 27

$45.2 Billion

Question 28

What are the factors for causing the Exxon-Valdez spill?

Answer 28

1) Exxon failed to repair ship’s radar system
2) Exxon failed to supervise the master; provide sufficient and rested crew
3) Tanker sailed outside the normal sea lanes

Question 29

The BP oil spill resulted in them paying $ __ _______

Answer 29

$4 Billion

Question 30

What are some 2000- present examples of wcc?

Answer 30

¤ Enron scandal early 2000s
¤ Bernie Madoff
¤ Financial Collapse
¤ BP Oil Spill
¤ FIFA Corruption Scandal
¤ Volkswagen
¤ Wells Fargo

Question 31

What are some 2000- present examples of wcc?

Answer 31

¤ Enron scandal early 2000s
¤ Bernie Madoff
¤ Financial Collapse
¤ BP Oil Spill
¤ FIFA Corruption Scandal
¤ Volkswagen
¤ Wells Fargo

Question 32

Enron was?

Answer 32

The 1st natural gas pipeline network in the U.S.

Question 33

What did Enron do?

Answer 33

• Got involved in energy trading markets
• Didn’t disclose investment failings, rather they falsified public accounting records
• Pretended the loses were independent firms
• Disguised loans as stock trades to conceal debts

Question 34

Who is Arthur Anderson?

Answer 34

Helped Enron falsify accounting record

Question 35

Who is Sarbanes-Oxley?

Answer 35

Made CEOs for Enron legally liable for what was in their accounting statements; increased sanctions (w/ jail time).

Question 36

When Enron was caught, ____% of their profits disappeared

Answer 36

80%

Question 37

Enron being caught led to?

Answer 37

1) loss of jobs
2) investment money
3) market confidence

Question 38

What two incidents happened in the late 2000s?

Answer 38

1) Financial Meltdown (2007 – 2008)

2) 2010 - BP Oil Spill in the Gulf of Mexico

Question 39

What are some major factors that led to the Financial Meltdown (2007 – 2008)?

Answer 39

1) subprime mortgage lending
2) predatory mortgage lending
3) bunding of securities (bad/good)