A deadly termite called white collar crime
A recent high-profile episode that has come to light in a well-known mutual fund is yet another addition to the long list of white-collar crimes that have occurred in India over the past two decades. Stars on the list include Harshad Mehta, Satyam, Ketan Parekh, Saradha Chit Fund, PMC Bank and Punjab National Bank.
Sociologists and criminologists define white-collar crime as “a crime committed by people who enjoy high social status, high reputation and respectability in their profession”. The reason is that human beings are inherently greedy. White-collar crime harms society more than other normal crimes, primarily because of the financial loss gullible innocents suffer because of it. The irony and tragedy is that most people don’t understand that they are victims of crime. They say ignorance is bliss. Moreover, it destroys the moral fiber of society,
The United States Federal Bureau of Investigation describes the term white-collar crime as synonymous with the full range of fraud committed by business and government professionals. These crimes are characterized by deception, concealment or breach of trust and do not rely on the application or threat of physical force or violence. The motivation behind these crimes is financial – to obtain or avoid losing money, goods or services or to gain personal or business advantage. These are not victimless crimes. A single scam can destroy a business, devastate families by wiping out their savings, or cost investors billions of dollars (or even all three).
White collar employees have always been “shirt and tie” people, occupying office jobs and managerial functions. They oppose blue collar the workers, who traditionally wore blue shirts and worked in the workshops of factories and mills.
The types of white collar crime are varied and numerous and they occur in all segments and professions of society. The range of white-collar crimes has expanded dramatically with the advent of technology and complex financial products and arrangements. These days, almost everyone comes across scam emails allegedly sent by friends and relatives stating that they are in distress and asking for urgent financial assistance of a substantial amount.
These are crimes where the perpetrators do not necessarily come face to face with the victims and their identity therefore remains veiled or shrouded in secrecy. They are much more harmful to society because these are the same people who should ideally be held up as a moral example and role model for others due to the fame and fame attached to their alma mater. They are the ones who are supposed to behave responsibly, but unfortunately commit such crimes and pollute society. These crimes have virtually no eyewitnesses, evidence is hard to come by as they are committed mostly sitting in the cool, behind closed doors of the fancy rooms of modern corporate offices. They are committed silently and non-violently but in cold blood.
The Supreme Court of India in the State of Gujarat v Mohanlal Jitamalji Porwal and Anr observed very poignantly that “the cause of the community deserves equal treatment from the court in the exercise of its judicial functions. The Community or the State is not a non grata person whose cause can be treated with disdain. The whole Community is harmed if the economic delinquents who ruin the economy of the State are not brought to the books. Murder can be committed in the heat of the moment when passions are aroused. Economic crime is committed with cold calculation and deliberate intent for personal gain, regardless of the consequences for the Community. A disregard for the interest of the Community can only come at the cost of the Community’s loss of trust and confidence in the system for administering justice impartially without fear of criticism from those quarters which view white-collar crimes with a permissive eyes oblivious to the damage done to the national economy and the national interest”.
The trend of white collar crimes in India poses a threat to the economic development of the country and has the potential to tarnish its image in the concert of nations affecting its credibility as a preferred investment destination. It therefore requires immediate and serious intervention on the part of the government, not only by enacting stricter laws but also by ensuring that it is properly and strictly applied.
Going back to the leading episode of a mutual fund, one has to keep in mind that given the fact that mutual funds use money from “not so knowledgeable” common investors , the Department of Finance and SEBI need to look at acts of embezzlement and embezzlement by key mutual fund employees much more seriously. The disease is serious enough to require surgery and the simple act of sticking a bandage on would be a mockery.
The affected employee should be subject to criminal prosecution under applicable criminal law and SEBI should also deregister the affected broker and exclude him, his family members and associates from any activity related to the securities market. capital after following due process. This is necessary to deter others and prevent such events from happening in the future.
With the rapid development of technology and commerce across the world, the types and types of white collar crimes such as cyber crimes will increase. These crimes are such that they can be committed across the border of any country. The “ease of committing” such crimes has made this sophisticated breed of criminals gluttonous and bolder. Security and law enforcement agencies need to pull up their socks to step up surveillance and preventative measures to combat this threat.
The opinions expressed above are those of the author.
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