Business Ethics and White-Collar Crime Business Ethics There are many definitions of business ethics, but the ones given by Andrew Crane and Raymond C . Baumhart are considered the most appropriate ones. According to Crane, "Business ethics is the study of business situations, activities, and decisions where issues of right and wrong are addressed." Baumhart defines, "The ethics of business is the ethics of responsibility. The businessman must promise that he will not harm knowingly." Business ethics inquires into and justifies the decision-making process concerning what is right and wrong in all areas of business practice. The decision-making process occurs on the individual, organizational, and business system levels. This chapter explains how business decisions are made from the moral, legal, and economic points of view. The strengths and weaknesses of each perspective are reviewed before presenting an integrated approach that applies all three points of view in the business decision-making process. White Collar Crime Reportedly coined in 1939, the term white-collar crime is now synonymous with the full range of frauds committed by business and government professionals. These crimes are characterized by deceit, concealment, or violation of trust and are not dependent on the application or threat of physical force or violence. The motivation behind these crimes is financial - to obtain or avoid losing money, property, or services or to secure a personal or business advantage. These are not victimless crimes. A single scam can destroy a company, devastate families by wiping out their life savings, or cost investors billions of dollars (or even all three). Today's fraud schemes are more sophisticated than ever, and the FBI is dedicated to using its skills to track down the culprits and stop scams before they start. The FBI's white-collar crime work integrates the analysis of intelligence with its investigations of criminal activities such as public corruption, money laundering, corporate fraud, securities and commodities fraud, mortgage fraud, financial institution fraud, bank fraud and embezzlement, fraud against the government, election law violations, mass marketing fraud, and health care fraud. The FBI generally focuses on complex investigations - often with a nexus to organized crime activities - that are international, national, or regional in scope and where the FBI can bring to bear unique expertise or capabilities that increase the likelihood of successful investigations. FBI special agents work closely with partner law enforcement and regulatory agencies such as the Securities and Exchange Commission, the Internal Revenue Service, the U.S. Postal Inspection Service, the Commodity Futures Trading Commission, and the Treasury Department's Financial Crimes Enforcement Network, among others, targeting sophisticated, multi-layered fraud cases that harm the economy. Major Threats \& Programs Corporate Fraud Corporate fraud continues to be.

1. Business Ethics and White-Collar Crime Business Ethics There are many definitions of business
ethics, but the ones given by Andrew Crane and Raymond C . Baumhart are considered the most
appropriate ones. According to Crane, "Business ethics is the study of business situations,
activities, and decisions where issues of right and wrong are addressed." Baumhart defines, "The
ethics of business is the ethics of responsibility. The businessman must promise that he will not
harm knowingly." Business ethics inquires into and justifies the decision-making process
concerning what is right and wrong in all areas of business practice. The decision-making
process occurs on the individual, organizational, and business system levels. This chapter
explains how business decisions are made from the moral, legal, and economic points of view.
The strengths and weaknesses of each perspective are reviewed before presenting an integrated
approach that applies all three points of view in the business decision-making process. White
Collar Crime Reportedly coined in 1939, the term white-collar crime is now synonymous with
the full range of frauds committed by business and government professionals. These crimes are
characterized by deceit, concealment, or violation of trust and are not dependent on the
application or threat of physical force or violence. The motivation behind these crimes is
financial - to obtain or avoid losing money, property, or services or to secure a personal or
business advantage. These are not victimless crimes. A single scam can destroy a company,
devastate families by wiping out their life savings, or cost investors billions of dollars (or even
all three). Today's fraud schemes are more sophisticated than ever, and the FBI is dedicated to
using its skills to track down the culprits and stop scams before they start. The FBI's white-collar
crime work integrates the analysis of intelligence with its investigations of criminal activities
such as public corruption, money laundering, corporate fraud, securities and commodities fraud,
mortgage fraud, financial institution fraud, bank fraud and embezzlement, fraud against the
government, election law violations, mass marketing fraud, and health care fraud. The FBI
generally focuses on complex investigations - often with a nexus to organized crime activities -
that are international, national, or regional in scope and where the FBI can bring to bear unique
expertise or capabilities that increase the likelihood of successful investigations. FBI special
agents work closely with partner law enforcement and regulatory agencies such as the Securities
and Exchange Commission, the Internal Revenue Service, the U.S. Postal Inspection Service, the
Commodity Futures Trading Commission, and the Treasury Department's Financial Crimes
Enforcement Network, among others, targeting sophisticated, multi-layered fraud cases that
harm the economy. Major Threats & Programs Corporate Fraud Corporate fraud continues to be
one of the FBI's highest criminal priorities-in addition to causing significant financial losses to
investors, corporate fraud has the potential to cause immeasurable damage to the U.S. economy
and investor confidence. As the lead agency investigating corporate fraud, the Bureau focuses its
efforts on cases that involve accounting schemes, self-dealing by corporate executives, and
obstruction of justice. The majority of corporate fraud cases pursued by the FBI involve
accounting schemes designed to deceive investors, auditors, and analysts about the true financial
condition of a corporation or business entity. Through the manipulation of financial data, the
share price, or other valuation measurements of a corporation, financial performance may remain
artificially inflated based on fictitious performance indicators provided to the investing public.
The FBI's corporate fraud investigations primarily focus on the following activities: Falsification
of financial information - False accounting entries and/or misrepresentations of financial
condition; - Fraudulent trades designed to inflate profits or hide losses; and - Illicit transactions
designed to evade regulatory oversight. Self-dealing by corporate insiders - Insider trading
(trading based on material, non-public information); Kickbacks; - Misuse of corporate property

2. for personal gain; and - Individual tax violations related to self-dealing. Fraud in connection with
an otherwise legitimately operated mutual hedge fund - Late trading; - Certain market timing
schemes; and - Falsification of net asset values. These are not victimless crimes. A single scam
can destroy a company, devastate families by wiping out their life savings, or cost investors
billions of dollars (or even all three). Today's fraud schemes are more sophisticated than ever,
and the FBI is dedicated to using its skills to track down the culprits and stop scams before they
start. The FBI's white-collar crime work integrates the analysis of intelligence with its
investigations of criminal activities such as public corruption, money laundering, corporate
fraud, securities and commodities fraud, mortgage fraud, financial institution fraud, bank fraud
and embezzlement, fraud against the government, election law violations, mass marketing fraud,
and health care fraud. The FBI generally focuses on complex investigations - often with a nexus
to organized crime activities - that are international, national, or regional in scope and where the
FBI can bring to bear unique expertise or capabilities that increase the likelihood of successful
investigations. FBI special agents work closely with partner law enforcement and regulatory
agencies such as the Securities and Exchange Commission, the Internal Revenue Service, the
U.S. Postal Inspection Service, the Commodity Futures Trading Commission, and the Treasury
Department's Financial Crimes Enforcement Network, among others, targeting sophisticated,
multi-layered fraud cases that harm the economy. Major Threats & Programs Corporate Fraud
Corporate fraud continues to be one of the FBI's highest criminal priorities - in addition to
causing significant financial losses to investors, corporate fraud has the potential to cause
immeasurable damage to the U.S. economy and investor confidence. As the lead agency
investigating corporate fraud, the Bureau focuses its efforts on cases that involve accounting
schemes, self-dealing by corporate executives, and obstruction of justice. The majority of
corporate fraud cases pursued by the FBI involve accounting schemes designed to deceive
investors, auditors, and analysts about the true financial condition of a corporation or business
entity. Through the manipulation of financial data, the share price, or other valuation
measurements of a corporation, financial performance may remain artificially inflated based on
fictitious performance indicators provided to the investing public. The FBI's corporate fraud
investigations primarily focus on the following activities: Falsification of financial information -
False accounting entries and/or misrepresentations of financial condition; - Fraudulent trades
designed to inflate profits or hide losses; and - Illicit transactions designed to evade regulatory
oversight. Self-dealing by corporate insiders - Insider trading (trading based on material, non-
public information); Kickbacks; - Misuse of corporate property for personal gain; and -
Individual tax violations related to self-dealing. Fraud in connection with an otherwise
legitimately operated mutual hedge fund - Late trading; - Certain market timing schemes; and -
Falsification of net asset values. Obstruction of justice designed to conceal any of the above-
noted types of criminal conduct, particularly when the obstruction impedes the inquiries of the
U.S. Securities and Exchange Commission (SEC), Commodity Futures Trading Commission
(CFTC), other regulatory agencies, and/or law enforcement agencies. The FBI has formed
partnerships with numerous agencies to capitalize on their experience in specific areas such as
securities, taxes, pensions, energy, and commodities. The Bureau has placed greater emphasis on
investigating allegations of these frauds by working closely with the SEC, CFTC, Financial
Industry Regulatory Authority, Internal Revenue Service, Department of Labor, Federal Energy
Regulatory Commission, and the U.S. Postal Inspection Service. Questions 1. Describe how does
White Collar Crime relate to Business. 2. How it can impact the corporate organization and what
are the area of impact? 3. Why are white-collar criminals more difficult to control than other

3. ethical misconducts? 4. What are most White Collar Criminals still employed and making
money? 5. What can the corporate organization be done to prevent white collar crime?