Regulatory crime
Regulatory crime refers to violations of rules established by government regulatory agencies that oversee various sectors, including trade, finance, occupational safety, and environmental protection. These offenses, which can include practices such as bid rigging and price-fixing, are typically managed by agencies like the Federal Trade Commission and the Securities and Exchange Commission. Unlike traditional criminal cases, regulatory crimes operate under different standards, allowing for easier prosecution without the need to prove intent or provide overwhelming evidence of guilt. Regulatory enforcement tends to emphasize compliance and cooperation, often opting for nonpunitive measures such as fines, consent decrees, and cease-and-desist orders. While these sanctions can induce a sense of shame among offenders, they do not carry criminal penalties that could lead to imprisonment or the dissolution of a business. Significantly, regulatory agencies can escalate serious infractions to criminal authorities if warranted, indicating a pathway for more severe accountability. Furthermore, regulatory crimes are not limited to domestic law; they also intersect with international regulations concerning trade and environmental standards, particularly in addressing pollution issues that cross borders.
Regulatory crime
Definition: Business practices banned under regulatory law instead of criminal law or civil law
Significance: Laws governing regulatory crimes may be the most effective means of forcing compliance from companies because their nonpunitive nature tends to promote future corporate cooperation through persuasion.
The most common of crimes are violations of rules set by various government regulatory agencies. Among the most important federal regulatory agencies are the Federal Trade Commission, the Securities and Exchange Commission, the Occupational Safety and Health Administration, the Equal Employment Opportunity Commission, the Environmental Protection Agency, and the Federal Communications Commission. Some examples of regulatory crimes that they oversee are bid rigging, price-fixing, and failures to uphold inspection standards.
The processing of regulatory cases requires lesser standards for prosecution than in criminal and civil cases. For example, prosecutors do not need to prove guilt beyond a reasonable doubt and the matter of intent (mens rea) is generally irrelevant. Regulatory law is generally much flexible and proactive and involves agencies that have closer and more continuous contacts with offenders than is the case with most criminal agencies.
Regulatory law consists mainly of injunctions, consent decrees, and cease-and-desist orders. While there is no criminal aspect to punishments for offenses, regulatory sanctions may nevertheless place some degree of shame on offenders. However, the main problem with regulatory cases is that formal sanctions consist merely of fines. No such thing as a “smoking gun” that might put a grossly offending corporation out of business or send a company to prison is possible. However, gross violations can be referred to criminal authorities when regulatory agencies conclude that further investigations are warranted.
Bibliography
Rosoff, Stephen, Henry Pontell, and Robert Tillman. Profit Without Honor: White-Collar Crime and the Looting of America. Upper Saddle River, N.J.: Prentice Hall, 2002.
Simpson, Sally S. Corporate Crime, Law, and Social Control. New York: Cambridge University Press, 2002.
Sutherland, Edwin H. White Collar Crime: The Uncut Version. New Haven, Conn.: Yale University Press, 1983.
Wells, Joseph. Corporate Fraud Handbook: Prevention and Detection. Hoboken, N.J.: John Wiley & Sons, 2004.