"...Go where you will, in business parts, or meet who you like of businessmen, it is - and has been for the last three years - the same story and the same lament. Dishonesty, untruth, and what may, in plain English, be termed mercantile swindling within the limits of the law, exists on all sides and on every quarter…"
No, this is not a comment from a contemporary website, it is taken from an editorial published in Temple Bar Magazine, of 1866. It was written when England was experiencing a plethora of fraudulent offerings in Railway shares, but the tenor of its complaint is as relevant today as it was then!
There is a growing groundswell of informed opinion among modern commentators that financial regulators should be far more willing to bring criminal charges against those financial practitioners whose actions should be construed as more than just negligent or incompetent.
I have never understood why white collar criminals should be treated in a different manner from working class criminals, but the fact remains that they are treated differently, and have been for many, many years.
The phenomenon was first recorded in a paper entitled 'White Collar Crime', published in 1949 by the American criminologist Edwin Sutherland, in which he pointed out;
"...‘There is a consistent bias involved in the administration of criminal justice under laws which apply to business and the professions and which therefore involve only the upper socio-economic group..."
In 'White Collar Crime', Sutherland argued that the behaviour of persons of respectability, from the upper socio-economic class, frequently exhibits all the essential attributes of crime, but that it is only rarely dealt with as such. This situation arose, he said, from a tendency for systems of criminal justice in Western societies to favour certain economically and politically powerful groups and to disfavour others, notably the poor and unskilled who comprise the bulk of the visible criminal population.
"...Probably much more important however, is the cultural homogeneity of legislators, judges and administrators with businessmen. Legislators admire and respect businessmen and cannot conceive of them as 'criminals’; businessmen do not conform to the popular stereotype of the 'criminal..."
Another American sociologist William Chambliss put it this way;
"...One of the reasons we fail to understand business crime is because we put crime into a category that is separate from normal business. Much crime does not fit into a separate category. It is primarily a business activity..."
In his research, Sutherland discovered that the white collar criminal has no real fear of the regulators appointed to control the activities of the businessman, a state of affairs which he felt impeded the proper control of their activities. He discovered that actions by the regulators were considered to be an unfortunate interlude, but carried very little exclusionary status. He identified that;
"...the violation of the laws designed to regulate business behaviour does not necessarily mean that the violator will lose social status among his business associates. Although some members of the industry may think less of him, others will still admire him..."
It was very clear that the actions of regulators which were seen as a bureaucratic part of a governmental process, were not considered to possess a status which would diminish the perpetrator in the eyes of his social peers. He said;
"... white collar criminals customarily feel and express contempt for law, government and regulators in a way similar to that in which professional thieves express contempt for policemen and judges. Businessmen characteristically believe that the least amount of government is the most desirable state..."
My own experiences of dealing with white-collar criminals had demonstrated very similar findings and during some academic research I undertook, I decided to study whether or not the finding of a guilty verdict for a criminal offence of dishonesty would have an exclusionary impact upon a financial practitioner.
One financial criminal had said to me rather ruefully '...the white collar sector always assumed that its wrong-doing would be treated somehow differently from other crimes...'