Corporate Liability, Banks, And Foreign Dodgers Meet Strict Liability

This essay will explain the concepts of separate personality and limited liability and their significance in company law. The principle of separate personality is defined in the Companies Act 2006(CA) ; “subscribers to the memorandum, together with such other persons as may from time to time become members of the company are a body corporate by the name contained in memorandum.” This essentially means that a company is a separate legal personality to its members and therefore can itself be sued and enter into contracts. This theory was birthed into company law through the case of Salomon v Salomon and Co LTD 1872. This case involved a company entering liquidation and the unsecured creditors not being able to claim assets to compensate them. The issue in this case was whether Mr Salomon owed the money or the company did. In the end, the House of Lords held that the company was not an agent of Mr Salomon and so the debts were that of the company thus creating the “corporate Veil” .

The question before our society is not whether corporate crime is a victimless crime, rather the question is what should be done about it? Corporate crime doesn’t just do harm to the investors that can be unknowingly damaged by these crimes, it has a much more insidious nature to it as it has done harm on global scales. Corporate crime is almost a misnomer because many of these criminal wrongdoings are for the most part legal, when not taken to their ultimate conclusion. Society within the United States has been taught that the man in the brief case, yelling at other men in dark coats on the flow of the stock exchange are the smartest guys in the room. This paper will attack that idea on many levels, the first salvo will be

The Sarbanes-Oxley Act of 2002 (SOX), also known as the Public Company Accounting Reform and Investor Protection Act and the Auditing Accountability and Responsibility Act, was signed into law on July 30, 2002, by President George W. Bush as a direct response to the corporate financial scandals of Enron, WorldCom, and Tyco International (Arens & Elders, 2006; King & Case, 2014;Rezaee & Crumbley, 2007). Fraudulent financial activities and substantial audit failures like those of Arthur Andersen and Ernst and Young had destroyed public trust and investor confidence in the accounting profession. The debilitating consequences of these perpetrators and their crimes summoned a massive effort by the government and the accounting profession to fight all forms of corruption through regulatory, legal, auditing, and accounting changes.

This paper describes the impact of the decision made in the case of Tesco Stores Ltd v Brent LBC on the law and its effects on the corporate world, and the comparison between the doctrine of vicarious liability that it outlines and the doctrine of identification that was used earlier to determine the liability of corporations in cooperate crime.

As a starting note, any mention of concurrent liability should be assumed to mean concurrently liability in tort and contract. Traditionally the distinction between contract and tort was that contract concerns the improvement of the claimant 's position, whereas tort is concerned with dealing with their position worsening. There has been dispute around concurrent liability and its ambiguity has led to varying decision in cases and statute making as Taylor puts it “the basis of concurrent liability uncertain”. This essay will argue Tort has and is extending itself beyond its traditional role due to judges presumption of morality leading to the unclear concurrent liability we see today. Whilst this concurrent liability shows some

The banking industry consists of almost sixty-five hundred banks that are insured by the Federal Deposit Insurance Corporation (FDIC). Out of these, there are eighty-one substantially large banks in the United States that are publically traded, which is where the market structure and industry information will be based. However, as with the rest of the country, these banks are very concentrated, with the largest banks accounting for over half of the market as well as accounting for the largest amounts of revenue.

As said in every economics class, the reason every business goes into business is to make money. The same can be said in criminal cases involving businesses. In the majority of cases, executives and people highly ranked in the company tend to bend the numbers in the financial/accounting areas of the business or corporation. They do not do this for fun, but rather to make money. Something needs to be done before corporations really get out of hand.

A corporation is an artificial person established by the law. It nurses the same rights as humans contrariwise; they are not equally responsible for their actions. A corporation cannot face the same charges a human would: if illegal actions took place. Bakan illustrates the traits of a corporation to closely resemble the traits of a psychopathic individual human being. These traits are, but not limited to: “1) unconcern for others, 2) incapable of maintaining relationships, 3) disregard for others safety/health, 4) repeated lying, 5) incapable of experiencing guilt, and 6) failure to conform to social norms.” Therefore, executive’s means for earning high returns for shareholders can be seen as a trait of a psychopath. Yet, the corporation’s attributes are not based on the qualities of the executives outside of their careers. As Bakan would say, “the people who run corporations are, for the most part, good people, moral people.”

Corporate crime is not taken seriously and the regulatory agencies appear powerless as the penalties available to them are ineffective in sufficiently punishing criminal acts and preventing future crimes. As investigations and methods of law enforcement are incredibly time consuming and costly, the current most effective punishments of committing a corporate crime are the use of; recalls, unilateral orders, consent agreements, decrees, injunctions and monetary penalties are most used. The use of deferred and non-prosecution agreements are currently by far the most popular option for corporations.

The so called theory of Alter Ego holds the judicial person liable per se and differs from the previous model as it does not touch upon vicarious liability of natural persons and their culpability; it simply constructs independent criminal liability of corporations, which allows criminal law to preserve its strong core in cases where the provision on the prohibited act has a vague or is leaking the guilt requisite. In difference from vicarious liability, the theory of Alter Ego is broader and deeper as it establishes corporate intent and involves a penalty for corporations that have commenced intentional offences. Moreover, natural persons are considered as organs of the corporate body in the sense that they are the limbs and brains of the

From the standpoint of the criminal, the ideal white- collar crime is one that will never be recognized or detected as a criminal act. (Radzinowicz 325-335) Corporate Crime Corporate crime is the type of crime that is engaged in by individuals and groups of individuals who become involved in criminal conspiracies designed to improve the market share or profitability of their corporations. ( Siegel 338) Corporations are legal entities, which can be and are subjected to criminal processes. There is today little restriction on the range of crimes for which corporations may be held responsible, though a corporation cannot be imprisoned. The most controversial issue in regard to the study of corporate crime revolves around the question of whether corporate crime is "really crime." Corporate officials, politicians, and many criminologists object to the criminological study of corporate criminality on the strictest sense of the word. The conventional and strictly legal definition of crime is that it is an act, which violates the criminal law and is thereby punishable by a criminal court. From this perspective a criminal is one who has been convicted in a criminal court. Given these widely accepted notions of crime and criminals, it is argued that what is called corporate crime is not really

As the WMI accounting fraud case shows, change exposes organizations to considerable financial fraud risks. The top officials used acquisitions and merger as means to perpetuate this fraud. This financial fraud took place due to the organizational breakdown of internal and external audit controls. As a result, the top management was able to commit this massive fraud without facing any resistance. It never occurred to them that they were violating the law because what mattered to them was pocketing as much as they could.

Contingent Liability is a condition that refers to the possibility of a future event happening and addresses the responsibility of the party liable should the event take place. In today’s real estate market both sellers and buyers may have contingencies stated in the terms and conditions for selling and purchasing a home. The most common contingent liability are guarantees to debt.

This paper will be discussing the concept of strict liability along with the concept of absolute liability within the R. v. Sault Ste. Marie (1978). In doing so, this paper will explain how strict liability offences strike a good balance between the policy rationales for absolute liability in regulatory offences and the criminal law principle that only the morally blameworthy may be punished, and how the courts have interpreted absolute liability offence and their relationship with the Charter of Rights.

A corporation is an artificial person established by the law. It nurses the same rights as humans contrariwise; they are not equally responsible for their actions. A corporation cannot face the same charges a human would, if illegal actions took place. Bakan illustrates the traits of a corporation to closely resemble the traits of a psychopathic individual human being. These traits are, but not limited to: “1) unconcern for others, 2) incapable of maintaining relationships, 3) disregard for others safety/health, 4) repeated lying, 5) incapable of experiencing guilt, and 6) failure to conform to social norms.” Therefore, executive’s means for earning high returns for shareholders can be seen as a trait of a psychopath. Yet, the corporation’s attributes are not based on the qualities of the executives outside of their careers. As Bakan would say, “the people who run corporations are, for the most part, good people, moral people.”