Corporate Crime and Crisis: Causation Scenarios

This chapter examines four possible relationships between the credit crunch and corporate crime. A first relation is that cases of accounting fraud have contributed to the causes of the crisis. Because of these accounting scandals, the trust in large corporations and the financial sector possibly eroded. A second possible relation is the reverse: the crisis leads to more corporate crime. As a result of the crisis, companies run into financial difficulties. In their despair, they possibly cut costs by not complying with business regulations, or they may try to gain illegal profit through fraud. The third relation is the criminalization of more unethical corporate behavior. The moral outrage regarding the behavior of banks and insurance companies that contributed to the crisis might lead to an increased labeling of ''risky'' or ''greedy'' behavior of corporate executives as criminal. This results in more legal regulation. The fourth and final relation is that these amplification effects will lead to the discovery of more corporate crime. Copyright © 2011 by Emerald Group Publishing Limited. All rights of reproduction in any form reserved.