Exam 1: III Flashcards
Examples of WCC/CC before 1900s, it involved mainly _____ _______/__________ crimes
stock market/financial
Examples of WCC/CC before 1900s:
Much of American industry was built on __________ ______.
financial scams
What happened during Wall Street’s First Scandal in the 1790s?
William Duer
¨ Quit as Assistant Treasury Secretary
and…
¨ Audit
¨ Alexander Hamilton’s roleWhat happened during The Civil War Era & The Robber Barons?
JP Morgan - American banker and financier
What he did:
¤ Gold speculator
¤ Rifles
Early 1900s: _______ starts playing a major role
Theodore Roosevelt
Who is Charles Ponzi?
Poor Italian immigrant, came to U.S. in early 1900’s
What is a ponzi scheme?
Promised investors money, but used money for other investors
What was the punishment for Ponzi?
5 years in federal prison after attempt to flee country, served 10 years and then deported to Italy
What happened between the 1930s and 1940s in WCC?
Securities Act (1933)
¨ Securities Exchange Act (1934)
¨ Sutherland begins writing
about WCC
Why didn’t Sutherlands’ writings in the 1940’s gain much traction?
at the time people trusted the government
What is the securities act (1933)?
federal regulation of stock markets and federal regulation of public company
See rise of __________ and _____________ __________
beginning in the 1960s
¤ Social unrest—government lacks legitimacy
¤ More interest in White Collar and Corporate Crime
Academically
Enforcement
consumer
environmental activism
See rise of consumer and environmental activism
beginning in the 1960s
¤ _______ ______—government lacks legitimacy
¤ More interest in _____ ______ and __________
Crime
Academically
Enforcement
Social unrest
White Collar
Corporate
Who is Ralph Nader?
-Wrote Unsafe at Any Speed (1965)
about ¨ Chevrolet Corvair tire pressure
-Was for Consumer-advocacy groups
What happened during the 1970s WCC?
1970: 1st Earth Day
1974: Campaign Regulation and Foreign Corrupt Practices Act
1979: Clinard and Yeager study of corporate crime
¤ Funded by Justice Department
The 1980s were known as “The _____ Decade”
The Greed Decade
The 1980s wcc looked like?
Unprecedented amounts of WCC
¤ Insider-trading/stock manipulations
Why was there so much wcc in the 1980s?
reagonomics- trickle down economics
culture- focused on goods, status, wealth
What were the sentencing guidelines developed in the mid 80’s and early 90’s?
1984: individual crimes
1991: organizations
The 1990s were known as “The _________ Decade”
The Betrayal Decade
Why were the 1990s called The Betrayal Decade ?
People were using positions of trust to deceive and betray
Economic growth in the 1990s meant that?
financial crimes aren’t really that much of a law enforcement priority
During the Betrayal Decade (1990s), good enforcement efforts were put into what other domain (not involving wcc)?
1) defense contractors
2) Exxon oil spill
3) Health care fraud
Who was responsible for the Exxon oil spill?
Exxon Valdez
What’s the Exxon Oil Spill?
March 24, 1989—tanker grounded in Prince William Sound
What was the punishment for the Exxon oil spill?
Guilty Plea= paid a criminal fine of $100 million
2008 Supreme Court Decision= reduced it to $507.5 million
2008 annual profit for Exxon?
$45.2 Billion
What are the factors for causing the Exxon-Valdez spill?
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
The BP oil spill resulted in them paying $ __ _______
$4 Billion
What are some 2000- present examples of wcc?
¤ Enron scandal early 2000s ¤ Bernie Madoff ¤ Financial Collapse ¤ BP Oil Spill ¤ FIFA Corruption Scandal ¤ Volkswagen ¤ Wells Fargo
What are some 2000- present examples of wcc?
¤ Enron scandal early 2000s ¤ Bernie Madoff ¤ Financial Collapse ¤ BP Oil Spill ¤ FIFA Corruption Scandal ¤ Volkswagen ¤ Wells Fargo
Enron was?
The 1st natural gas pipeline network in the U.S.
What did Enron do?
- 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
Who is Arthur Anderson?
Helped Enron falsify accounting record
Who is Sarbanes-Oxley?
Made CEOs for Enron legally liable for what was in their accounting statements; increased sanctions (w/ jail time).
When Enron was caught, ____% of their profits disappeared
80%
Enron being caught led to?
1) loss of jobs
2) investment money
3) market confidence
What two incidents happened in the late 2000s?
1) Financial Meltdown (2007 – 2008)
2) 2010 - BP Oil Spill in the Gulf of Mexico
What are some major factors that led to the Financial Meltdown (2007 – 2008)?
1) subprime mortgage lending
2) predatory mortgage lending
3) bunding of securities (bad/good)
