In December 1939, Edwin Sutherland introduced the term “white-collar crime” in his Presidential Address to the American Sociological Association to distinguish crimes committed by professionals, celebrities, public officials, and those in the upper echelons of society.
The term was befitting since white-collar crimes did not involve violence or threats of violence. Instead, the accused were often individuals who held some form of trust or employment that made them privy to sensitive information, which they capitalized.
And until the Great Depression in the 1930s, legislation prohibiting exploitative business activities had been reactionary rather than preemptive. After Sutherland’s speech, legislators began to enact laws to restrict privileged individuals from exploiting their position for personal gains.
Since 1939, several legislations have built up the crescendo to prevent and enforce the prosecution of white-collar crimes. Notable laws include:
1933 — Securities Act
- Regulated how corporations could issue securities.
- Required investors to be given prospectuses.
- Mandated filing requirements before corporations accessed securities.
1933 — Banking Act (Glass-Steagall Act)
- Revoked the license of banks to act as brokerage firms.
- Established the Federal Deposit Insurance Corporation.
- Repealed and replaced by the Gramm-Leach-Bliley Act.
1934 — Securities Exchange Act
- Created the Securities and Exchange Commission.
- Empowered the agency to oversee security exchanges and impose rules and fines on white-collar market manipulators.
1970 — Securities Investor Protection Act
- Protects investors when a brokerage firm goes bankrupt.
1970 — Racketeer Influenced and Corrupt Organizations Act
- Makes it unlawful for individuals employed or associated with any private or public enterprise to collect debts illegally.
- Clamps down on organized crime in the United States.
1984 — Insider Trading Sanctions Act
- Made individuals convicted of insider trading forfeit up to three times the fraudulent profits in fines.
1999 — Gramm-Leach-Bliley Act
- Allowed banks to operate as security brokerages.
- Required all financial institutions to explain their information-sharing practices to their customers.
- Required financial institutions to safeguard sensitive data about customers.
2006 — Stolen Valor Act
- Prevents public fraud.
- Preserves the reputation and meaning of military service medals.
- Makes it a federal crime to fraudulently claim to be a recipient of military decorations or medals for personal gain.
Range of White-Collar Crimes
These include crimes committed by professionals, leaders, public officials, and those in the upper echelons of society, including:
- Bank fraud
- Blackmail
- Bribery (Giving and Taking)
- Computer fraud
- Counterfeiting
- Credit card fraud
- Currency schemes
- Embezzlement
- Environmental schemes
- Forgery
- Health care fraud
- Insider trading
- Insurance fraud
- Investment schemes
- Kickback (unlike bribery, when a seller pays back a portion of the purchase price to the buyer).
- Money laundering
- Racketeering
- Securities fraud
- Tax evasion
- Telemarketing fraud