definition of white collar crime in malaysia:
Sutherland (1949:9) first coined the term “white-collar crime”. According to
him, white-collar crime may be defined approximately as a crime committed by a person of respectability and high social status in the course of his or her occupation’. He went on to say that white-collar crime referred to crime committed by business managers and executives.
there were several influential attempts by criminologists to expand the definition beyond a narrower focus on the high- status criminals. Edelhertz (1970: 3) suggested that Sutherland’s definition was far too restrictive. In his definition, Edelhertz not only dropped any reference to social status, but also the restriction that these offences must occur in an occupational setting. He defined white-collar crime as ‘an illegal act or series of illegal acts committed by non-physical means and by concealment or guile, to obtain money or property, to avoid the payment or
loss of money or property, or to obtain business or personal advantage’.
The most influential attempt to distinguish among different forms of white-collar crime has been that of Clinard and Quinney (1973: 188). They divided white-collar crime into 2 types: occupational crime and corporate crime. Occupational crime consists of offences committed by individuals for themselves in the course of their occupations and offences of employees against their employers. Corporate crime, on the other hand, is defined as the offences committed by corporate officials for their corporation and the offences of the corporation itself’.
Terms like economic crime, commercial crime and business crime are used interchangeably to denote a variety of white-collar offences, though they are rarely defined. However, economic crime has been defined by the Interpol to cover business and commercial crime and in fact, all
fraudulent operations conducted to the detriment of individuals or society in general, and constitutes a form of crime which seriously affects the economy of many countries.
CRIMINOLOGICAL THEORIES AND WHITE-COLLAR CRIME:
When Sutherland first wrote about white-collar crime, he maintained that it was best explained by his theory of differential association. For Sutherland, the law-breaking behaviour of businessmen, professionals and politicians (as well as all other law violators) was the product of a learning process. Violators encountered examples of law-breaking among those with whom
they worked and they drifted or jumped into such patterns of behaviour as part of their routine indoctrination into the requirements of their job. In time, they found that the definitions they encountered favourable to violation of the law overruled those encouraging law-abiding behaviour (Brown et al. 2004:533).
There are some empirical supports for Sutherland’s argument, in respect of corporate crime. Geis (1967) examined evidence given during hearings of illegal price-fixing activities of The Heavy Electrical Equipment Antitrust cases in 1961 in America, and found that people taking up new posts tended to find price-fixing to be an established practice, and picked it up themselves as part of learning their job. Baumhart (1961) found that businessmen’s unethical behaviour was influenced by superiors and peers. Both studies suggest that learning process is reinforced by rewards and punishments, which are the characteristics of corporate culture.
Some criminologists have tried to explain white-collar crime in terms of the concept of “anomie’ of Merton (1949) which stated that the disjuncture between cultural goals of success and legitimate means to achieve these goals as a possible source of crime. The cultural system of
society enjoins upon all men to strive for goals by means of normatively regulated or approved forms of behaviour. However, opportunities to reach these goals through socially approved means are unequally distributed. Crime or deviant behaviour ensues when social structure restricts or completely closes a person’s access to the approved modes of reaching
these goals. Corporate fraud, insider trading and criminal breach of trust are some notable examples. In relation to this, Neil Shover (1998) states that some white-collar crimes are committed as a result of the pressure to meet self-defined or externally imposed standards of successful performances. When medical scientists experience pressure to produce research
breakthroughs, or when business owners see their profits decline, the odds are increased that they will resort to criminal resolutions.
The “Techniques of Neutralization” described by Sykes and Matza (1957) can also be used to explain white-collar crime. The criminals may claim that no one was actually harmed, either physically or financially, to rationalize their acts. Embezzlers typically insist that they were only
borrowing the money and that they intended to repay it after they dealt with other financial demands that were vexing them. Antitrust violators may maintain that they are seeking to stabilize an out-of-control market situation when they conspire with others to fix prices. Rarely will there appear a white-collar offender with the refreshing honesty to admit: “I was deliberately engaged in crooked business dealings” (Brown, 2004: 528). Rather, they blame their violations on personal problems such as alcoholism, drug addiction, financial speculations or marital difficulties.
CAUSES OF WHITE-COLLAR CRIME
According to Dr. Yusof Nook (1993) and Joseph Eby Ruin (1996), there are 3 main causes of white-collar crime:
him, white-collar crime may be defined approximately as a crime committed by a person of respectability and high social status in the course of his or her occupation’. He went on to say that white-collar crime referred to crime committed by business managers and executives.
there were several influential attempts by criminologists to expand the definition beyond a narrower focus on the high- status criminals. Edelhertz (1970: 3) suggested that Sutherland’s definition was far too restrictive. In his definition, Edelhertz not only dropped any reference to social status, but also the restriction that these offences must occur in an occupational setting. He defined white-collar crime as ‘an illegal act or series of illegal acts committed by non-physical means and by concealment or guile, to obtain money or property, to avoid the payment or
loss of money or property, or to obtain business or personal advantage’.
The most influential attempt to distinguish among different forms of white-collar crime has been that of Clinard and Quinney (1973: 188). They divided white-collar crime into 2 types: occupational crime and corporate crime. Occupational crime consists of offences committed by individuals for themselves in the course of their occupations and offences of employees against their employers. Corporate crime, on the other hand, is defined as the offences committed by corporate officials for their corporation and the offences of the corporation itself’.
Terms like economic crime, commercial crime and business crime are used interchangeably to denote a variety of white-collar offences, though they are rarely defined. However, economic crime has been defined by the Interpol to cover business and commercial crime and in fact, all
fraudulent operations conducted to the detriment of individuals or society in general, and constitutes a form of crime which seriously affects the economy of many countries.
CRIMINOLOGICAL THEORIES AND WHITE-COLLAR CRIME:
When Sutherland first wrote about white-collar crime, he maintained that it was best explained by his theory of differential association. For Sutherland, the law-breaking behaviour of businessmen, professionals and politicians (as well as all other law violators) was the product of a learning process. Violators encountered examples of law-breaking among those with whom
they worked and they drifted or jumped into such patterns of behaviour as part of their routine indoctrination into the requirements of their job. In time, they found that the definitions they encountered favourable to violation of the law overruled those encouraging law-abiding behaviour (Brown et al. 2004:533).
There are some empirical supports for Sutherland’s argument, in respect of corporate crime. Geis (1967) examined evidence given during hearings of illegal price-fixing activities of The Heavy Electrical Equipment Antitrust cases in 1961 in America, and found that people taking up new posts tended to find price-fixing to be an established practice, and picked it up themselves as part of learning their job. Baumhart (1961) found that businessmen’s unethical behaviour was influenced by superiors and peers. Both studies suggest that learning process is reinforced by rewards and punishments, which are the characteristics of corporate culture.
Some criminologists have tried to explain white-collar crime in terms of the concept of “anomie’ of Merton (1949) which stated that the disjuncture between cultural goals of success and legitimate means to achieve these goals as a possible source of crime. The cultural system of
society enjoins upon all men to strive for goals by means of normatively regulated or approved forms of behaviour. However, opportunities to reach these goals through socially approved means are unequally distributed. Crime or deviant behaviour ensues when social structure restricts or completely closes a person’s access to the approved modes of reaching
these goals. Corporate fraud, insider trading and criminal breach of trust are some notable examples. In relation to this, Neil Shover (1998) states that some white-collar crimes are committed as a result of the pressure to meet self-defined or externally imposed standards of successful performances. When medical scientists experience pressure to produce research
breakthroughs, or when business owners see their profits decline, the odds are increased that they will resort to criminal resolutions.
The “Techniques of Neutralization” described by Sykes and Matza (1957) can also be used to explain white-collar crime. The criminals may claim that no one was actually harmed, either physically or financially, to rationalize their acts. Embezzlers typically insist that they were only
borrowing the money and that they intended to repay it after they dealt with other financial demands that were vexing them. Antitrust violators may maintain that they are seeking to stabilize an out-of-control market situation when they conspire with others to fix prices. Rarely will there appear a white-collar offender with the refreshing honesty to admit: “I was deliberately engaged in crooked business dealings” (Brown, 2004: 528). Rather, they blame their violations on personal problems such as alcoholism, drug addiction, financial speculations or marital difficulties.
CAUSES OF WHITE-COLLAR CRIME
According to Dr. Yusof Nook (1993) and Joseph Eby Ruin (1996), there are 3 main causes of white-collar crime:
1. Opportunities to commit crime,
2. Situational pressures on the individuals, and
3. Issues pertaining to integrity.
2. Situational pressures on the individuals, and
3. Issues pertaining to integrity.
A decision to commit fraud is known to be influenced by the interaction of all these three causes. Opportunities include increasing individual knowledge of a company’s operations, advancing to a position of trust, and becoming the only individual who knows a particular procedure (for example, correcting or modifying a computer programme). An organization could also provide opportunities for its staff to commit fraud by having a complex structure, allowing related party transactions; condoning weak internal control systems policies and procedures; or by frequently
switching its legal or accounting firms.
Situational pressures refer to the immediate pressures a person experiences within his environment, and the most overwhelming of all situational pressures are the unusually high personal debts or financial losses. Situational pressures might also be generated by official directives from leaders in the organization to achieve unrealistic performance objectives at any cost, or even by strong peer group influences. There are times when situational pressures encourage people to perpetrate fraud for their corporation rather than against their corporation such as the threat of losing a business license, delisting from the stock exchange, loss of employment or a cash shortage.
Personal integrity factors refer to each individual’s personal code of ethics. While this element appears to be a straightforward determination of a person’s honesty, the issue is actually more complex than it seems. A person ought to acquire a general definition of honest and dishonest
behaviour, and know which principles to adopt when developing a general trait of honesty. On top of that, a person needs to be consistently reinforced for honest behaviour before internalizing a standard of honesty and being intrinsically rewarded for honest conduct.
source: http://mpk.rmp.gov.my/jurnal/2005/whitecollarcrime.pdf
Supt Lim Hong Shuan
switching its legal or accounting firms.
Situational pressures refer to the immediate pressures a person experiences within his environment, and the most overwhelming of all situational pressures are the unusually high personal debts or financial losses. Situational pressures might also be generated by official directives from leaders in the organization to achieve unrealistic performance objectives at any cost, or even by strong peer group influences. There are times when situational pressures encourage people to perpetrate fraud for their corporation rather than against their corporation such as the threat of losing a business license, delisting from the stock exchange, loss of employment or a cash shortage.
Personal integrity factors refer to each individual’s personal code of ethics. While this element appears to be a straightforward determination of a person’s honesty, the issue is actually more complex than it seems. A person ought to acquire a general definition of honest and dishonest
behaviour, and know which principles to adopt when developing a general trait of honesty. On top of that, a person needs to be consistently reinforced for honest behaviour before internalizing a standard of honesty and being intrinsically rewarded for honest conduct.
source: http://mpk.rmp.gov.my/jurnal/2005/whitecollarcrime.pdf
Supt Lim Hong Shuan
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