Sanctioning Corporate Crime in the Financial Markets

• In Event: White-Collar Crime at 75: International Perspectives and Financial Markets

Abstract

Administrative or regulatory penalties remain to be the most widely used response to corporate crime in the financial markets. As such they represent a powerful social control mechanism, yet the factors surrounding their imposition have been less examined.
This paper examines the dynamics of the regulatory sanctioning process in the UK financial services industry with a particular focus on the negotiated settlements between the UK regulator – the Financial Conduct Authority (FCA) - and powerful financial institutions. It uses qualitative and quantitative data from observations of administrative practices, enforcement decisions and interviews with regulators, lawyers, regulated offenders, and compliance officers to examine the factors surrounding this negotiated system of justice, amongst other:
1) The pressures on the regulatory agency to produce bigger and quicker outcomes in the aftermath of the 2008 financial crisis;
2) The resources deployed by corporations to bargain a favourable outcome;
3) The deterrent effects of negotiated penalties in an industry that is highly sensitive to reputational damages.
The findings are analysed through a social constructivist approach: corporate crime in the financial services industry is shaped and produced partly through the enforcement practices of the financial regulator and its interactions with the subjects to enforcement.

Author

• Aleksandra Jordanoska, Queen Mary, University of London