Risky Business Revisited: White-Collar Crime and the Orange County Bankruptcy

1998 ◽  
Vol 44 (3) ◽  
pp. 367-387 ◽  
Author(s):  
Susan Will ◽  
Henry N. Pontell ◽  
Richard Cheung
Keyword(s):  
High Risk ◽  
Fear Of Falling ◽  
Orange County ◽  
White Collar Crime ◽  
White Collar ◽  
Financial Difficulties ◽  
Savings And Loan ◽  
Financial Scandals ◽  
Derivative Market ◽  
Risky Business

Orange County's bankruptcy is the largest governmental bankruptcy in U.S. history. Initial reports blamed the county's financial difficulties on the county treasurer's gambling with taxpayer dollars in the high-risk derivative market. This article forwards the argument that it was not simply “risky business” that caused the bankruptcy; rather, fraud and other forms of white-collar crime played a significant role in the $2 billion debacle. Using concepts and theories from the literature on white-collar crime and drawing comparisons with other financial scandals, most notably the savings and loan crisis, the authors argue that the financial downfall of Orange County was due to a “criminogenic environment” that allowed for concerted ignorance among officials who were motivated by a fear of falling from their positions of power.

The Savings and Loan Debacle of the 1980s: White-Collar Crime or Risky Business?

Law & Policy ◽  
1995 ◽  
Vol 17 (1) ◽  
pp. 23-55 ◽  
Author(s):  
WILLIAM K. BLACK ◽  
KITTY CALAVITA ◽  
HENRY N. PONTELL
Keyword(s):  
White Collar Crime ◽  
White Collar ◽  
Savings And Loan ◽  
Risky Business

“Heads I Win, Tails You Lose”: Deregulation, Crime, and Crisis in the Savings and Loan Industry

1990 ◽  
Vol 36 (3) ◽  
pp. 309-341 ◽  
Author(s):  
Kitty Calavita ◽  
Henry N. Pontell
Keyword(s):  
Corporate Crime ◽  
White Collar Crime ◽  
Manufacturing Sector ◽  
White Collar ◽  
Congressional Hearings ◽  
Savings And Loan ◽  
Thrift Industry ◽  
Savings And Loan Industry ◽  
Finance Capitalism

This study examines fraud in the savings and loan industry as a case study of white-collar crime. Drawing from extensive government reports, Congressional hearings, and media accounts, the study categorizes three types of savings and loan crime and traces them to the competitive pressures unleashed by deregulation in the early 1980s, within the context of a federally protected, insured industry. In addition, the study delineates the limitations of the enforcement process, focusing on the ideological, political, and structural forces constraining regulators. Although savings and loan crime is in many respects similar to corporate crime in the manufacturing sector, a relatively new form of white-collar crime, referred to as “collective embezzlement,” permeates the thrift industry. The study links the proliferation of collective embezzlement and other forms of thrift crime, as well as the structural dilemmas that constrain the enforcement process, to the distinctive qualities of finance capitalism.

Financial crime – is there any way out of the theoretical deadlock?

2017 ◽  
Vol 24 (4) ◽  
pp. 529-540
Author(s):  
Paul Eisenberg
Keyword(s):  
Design Methodology ◽  
State Of The Art ◽  
White Collar Crime ◽  
White Collar ◽  
The State ◽  
Financial Crime ◽  
Content Type ◽  
The Past ◽  
Financial Scandals ◽  
Research Questions

Purpose This paper aims to approach fundamental topics of financial crime and the law. What does constitute financial crime? Which field of law is best suited to address the threats of transgression by financial executives? What does motivate highly rewarded financiers to become white collar criminals? Design/methodology/approach To answer these research questions, contemporary theories of criminology in general and of white collar crime in particular, as well as theories on motivation, are critically discussed. Benefits and limitations of the theories in use are exemplified on the background of the London Interbank Offered Rate (LIBOR) scandal. Findings The paper criticises that the state-of-the-art theories are not able to embrace financial criminality in its entirety. A provoking pace for further research might be that of psychopathic disorders among white collar criminals. Thus, white collar crime maintains its challenging character. Originality/value This paper provides a thorough testing of multidisciplinary theories that emerged over the past decades against the recent LIBOR scandal. The research questions addressed and the methodologies applied provide a framework for the assessment of the prevailing theories against other financial scandals.

Trust: the unwritten cost of white-collar crime

2015 ◽  
Vol 23 (1) ◽  
pp. 87-101 ◽  
Author(s):  
Thomas E Dearden
Keyword(s):  
White Collar Crime ◽  
Strong Predictor ◽  
Empirical Studies ◽  
White Collar ◽  
Washington Post ◽  
Content Type ◽  
High Profile ◽  
Savings And Loan ◽  
Financial Consequences ◽  
Using Data

Purpose – The purpose of this study is to empirically assess the theorized importance of trust and resource removal following white-collar crime. Design/methodology/approach – Two studies are conducted using data from the Washington Post and ABC News Poll following the savings and loan scandal and the dotcom bust. The first examines trust in corporate contexts, and the second examines direct resource withdrawal from financial institutions. Findings – Results of a series of logistic regressions suggest that trust is impacted by high-profile white-collar crime. Models 1 and 2 find evidence that trust is a strong predictor of belief in investing in a given industry. Models 3 and 4 provide evidence that high-profile trust breaches lead to resource withdrawal, adding to the economic damages incurred directly from white-collar crime. Social implications – This study provides evidence that white-collar crime can create much larger financial consequences than immediate losses. Originality/value – Despite considerable theoretical ties between white-collar crime and trust, little empirical evidence exists to support this notion. This study provides two empirical studies that address the theoretical link.

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