Fraude Corporativo

Other People's Money

Joel S. Newman
Wake Forest University - School of Law



Tax Notes, Vol. 125, No. 1, p. 137, October 5, 2009
Wake Forest Univ. Legal Studies Paper No. 1487530

Abstract:
In informal banking arrangements such as cundinas and tandas, the “banker” will have an unexplained fund of money, which the IRS will presume was acquired in a taxable way. Drug dealers and embezzlers often have the same problem. The informal bankers, with adequate records, can rebut the presumption. However, it is too bad that they have to be analogized to criminals in order to do so.

Accepted Paper Series

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1487530

The SEC and the Madoff Scandal: Three Narratives in Search of a Story

Donald C. Langevoort

Georgetown University Law Center

September 18, 2009

Georgetown Law and Economics Research Paper No. 1475433
Georgetown Public Law Research Paper No. 1475433

Abstract:
This essay, part of a symposium on narrative in corporate law, considers various portrayals of the complicity of the SEC in the Bernard Madoff scandal - including the Commission's own Inspector General's report issued in September 2009. It considers possible explanations (revolving door problems, incompetence and sloth, etc.) but suggests that the story is deeper and more frustrating, arising out of the relative poverty in which the SEC operates, which in turn leads to habits of thought and action that leave too much unnoticed and undone. The interesting question, then: why the poverty? The essay concludes with a political explanation. While by no means meant to excuse the neglect in the Madoff matters, the essay suggests the possibility of a more sympathetic portrayal of the work-a-day world of securities regulation.

Keywords: securities fraud, Madoff, narrative

JEL Classifications: K22

Working Paper Series

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1475433

Fraud in Company: Who Warns?

H. Yeganeh
affiliation not provided to SSRN

V. Oskou
affiliation not provided to SSRN

Reza Daghani Sr.
affiliation not provided to SSRN


Summer 2009


Abstract:
One of the most important issues will be considered in the accounting and auditing financial statements and other auditing, is fraud subject. There is a lot of evidence about the efforts in manipulating accounting accounts and books of companies what interprets "cooking accounts or overlapping". During recent years notoriety and scandal is common and customary and can say" fraud incentive isn’t only political and financial motivation ". As far as TIME magazine in 2002 called "the financial scandal". With attending this case, scandal report as similar as disclosure is method of fraud detection, but sometimes trading based on confidential information to leading to some cases that it will overture. Topics in this article are discussed investigation about fraud, what happens and why, what players have an important role in fraud detection on companies through identification? What people will not reveal the fraud? And how people make manifest the fraud?

Keywords: fraud, market view, enforcement view, international fraud acts

Working Paper Series

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1483588

Corporate Crime: The Need to Increase Enforcement and Compliance

Vanisha H. Sukdeo
Osgoode Hall Law School


June 29, 2009

CLEA 2009 Annual Meeting Paper

Abstract:
This paper argues that corporate crime should be decreased through 3 reform options. The paper will demonstrate that if the reform options are implemented the incidences of corporate crime would decrease and compliance would increase. The author will examine the options available to combat corporate crime and foster compliance.

Keywords: corporate crime, stronger enforcement, compliance

Working Paper Series

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1427508

Internal Corporate Investigations and the Truth

Kevin H. Michels
The College of New Jersey


October 1, 2009

Seton Hall Law Review, Vol. 40, January 2010

Abstract:
In 2008, nearly half of all United States public companies commissioned outside counsel to conduct at least one internal investigation. The corporation, government officials, courts, shareholders and the public rely on investigative reports in assessing matters of unquestioned importance – allegations of material wrongdoing against the corporation. This article asks whether the internal-investigation entails a special commitment to the truth. There is reason for concern. While the American legal system has long presumed that the clash of adversaries is the best guarantor of truth, the investigator stands alone, implicitly asking us to accept her unilateral efforts as trustworthy. The investigator, however, is retained and compensated by the corporation that is the subject of the allegations – raising troubling questions about loyalty, accountability and conflicting objectives.

The article begins by asking which internal investigations pose special concerns about truth and reliability. From the attorney-ethics rules, corporation law and statutory obligations, it develops two categories of investigations that warrant the imposition of special truth standards: the reliance investigation – an investigation delivered to a third party; and a duty investigation – an investigation undertaken to satisfy a corporate duty of inquiry.

The article next identifies the core commitment of reliance and duty investigations: to provide as nearly as practicable an accurate account of the facts, the legal standards and their application. This, in turn, raises the question of what it means to be accurate in a legal inquiry, given the interpretative range of most legal matters. The article looks to philosophy, jurisprudence and historiography – disciplines that have struggled with questions about truth and objectivity – to explain and refine the accuracy standard. Accuracy, the article contends, is not only a viable standard to guide the investigation, it warrants commitment to a series of procedural truth standards proposed herein that substantially enhance the prospects of an accurate account – independence, sufficient inquiry, evidentiary reliability, and professional judgment. Despite the emphasis of lawmakers and courts, independence alone is not enough; it is only one of the procedural truth standards that serve the core substantive standard – accuracy.

The truth standards require attention to: conflicts relating to investigator's role, client commitments that blur truth seeking and client protection, the scope and depth of the investigation, the reliability of the evidence gathered, questions of emphasis in developing a narrative account, adherence to professional standards of interpretation in forming legal conclusions, and client-imposed constraints on the reporting of investigation results. The standards also have important implications for the degree of certainty claimed by the report, the obligations of investigators when they cannot satisfy the truth standards, and the tort obligations of investigative counsel. Even more important, a deeper understanding of the investigative role will increase the prospects that those who receive and rely on investigative reports – the corporation, courts, shareholders, the government and the public – will have the benefit of an accurate account.

Keywords: Internal Corporate Investigations, Attorney Ethics, Truth, Objectivity

Working Paper Series

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1481412

Global Anti‐Corruption Regimes: Why Law Schools May Want to Take a Multi‐Jurisdiction Approach

Global Anti‐Corruption Regimes: Why Law Schools May Want to Take a Multi‐Jurisdiction Approach

D. Alison Von Rosenvinge
New York Law School


September 25, 2009

CLPE Research Paper No. 28/09

Abstract:
The legal fight against bribery and corruption has evolved from the solitary effort of the United States with its Foreign Corrupt Practices Act (FCPA) to a global legal endeavor. Corporations are frequently engaged in transnational deals that require them to understand their obligations under a web of anti-corruption regulations with penalties ranging from fines in the tens of millions of dollars to life imprisonment. Although the market for legal services has changed to match client needs, the curriculum at most U.S. law schools has not. This paper explores the relationship between transnational business and legal services and legal education in the United States.

First, the article offers a comparative analysis of the main anti-corruption regimes, including the Foreign Corrupt Practices Act, The Organization for Economic Co-Operation and Development Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, United Nations Convention Against Corruption, The Organization of American States Inter-American Convention Against Corruption, Council of Europe Criminal and Civil Law Conventions on Corruption and The African Union Convention on Preventing and Combating Corruption.

Second, this paper analyzes how the legal market in the United States has responded to the global regulatory environment and provides an empirical study of the what anti-corruption legal services the twenty-five largest U.S. law firms provide their clients.

Finally, the paper presents a rough outline of a possible curriculum change and suggests that U.S. law schools would be well-advised to allow interested students to pursue multi-jurisdictional specialization in certain regulatory practice areas.

Keywords: Legal education, Curriculum change, Anti-corruption regimes

JEL Classifications: K10, K40

Working Paper Series

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1478733

Accounting Discretion of Banks During a Financial Crisis

Luc Laeven
International Monetary Fund (IMF); Centre for Economic Policy Research (CEPR)

Harry Huizinga
CentER, European Banking Center (EBC), Tilburg University; Centre for Economic Policy Research (CEPR)


September 2009

IMF Working Paper No. 09/207

Abstract:
This paper shows that banks use accounting discretion to overstate the value of distressed assets. Banks' balance sheets overvalue real estate-related assets compared to the market value of these assets, especially during the U.S. mortgage crisis. Share prices of banks with large exposure to mortgage-backed securities also react favorably to recent changes in accounting rules that relax fair-value accounting, and these banks provision less for bad loans. Furthermore, distressed banks use discretion in the classification of mortgage-backed securities to inflate their books. Our results indicate that banks' balance sheets offer a distorted view of the financial health of the banks.

Keywords: Accounting, Asset management, Asset prices, Bank accounting, Bank regulations, Banks, Financial crisis, Housing prices, Investment, Liquidity management, Real estate prices

Working Paper Series

Corruption and Private Law Enforcement: Theory and History

 

Nuno Garoupa
University of Illinois College of Law; Centre for Economic Policy Research (CEPR)

Daniel Klerman
University of Southern California Law School


June 9, 2009

U Illinois Law & Economics Research Paper No. LE09-016
USC CLEO Research Paper No. C09-12
USC Law Legal Studies Paper No. 09-25

Abstract:     
This article analyzes private law enforcement in an environment with corruption. The effect of corruption is studied both under the assumption of monopolistic enforcement by a single private enforcement agency and under the assumption of competitive enforcement by many private enforcers. In addition, the model takes into account the different objectives of a benevolent, social welfare-maximizing group and a self-interested, rent-seeking group, as well as the possibility of a government divided between welfare-maximizing and rent-seeking groups. Among the central results of the paper are (1) corruption is especially problematic under monopolistic enforcement, (2) when governmental decision making is divided, a rent-seeking group which is unable to control the level of fines and rewards usually prefers monopolistic to competitive enforcement. The article demonstrates the plausibility and relevance of the model by examining corruption and private law enforcement in pre-modern England.

Working Paper Series

Cognitive Effects of Decomposition on Fraud-Risk Assessments

Michael Favere-Marchesi
Simon Fraser University - Accounting Area


January 10, 2009

CAAA Annual Conference 2009 Paper

Abstract:     
Regulators and the audit profession have always been concerned that auditors may unduly place a strong emphasis on management's attitude or character cues that indicate a low fraud risk to the detriment of opportunity and incentive cues that may be a sign of high fraud risk, and thus assess a lower overall fraud-risk than warranted. This study examines whether decomposing the assessment of fraud can lead to an increased sensitivity in incentive and opportunity risks in comparison to the categorization elicited by the standards. This study also examines what impact decomposition has on fraud-risk assessments when attitude cues indicate high fraud-risk and whether the decision to modify the audit plan and the extent of testing in response to the fraud risk assessment is significantly influenced by a decomposition of the fraud judgment.

In an experiment with 90 audit managers, auditors who decompose fraud assessments are significantly more sensitive to variations in incentive and opportunity risks than auditors who only categorize fraud-risk factors. This increased sensitivity is observed in both low and high risk settings. Further, auditor's sensitivity to changes in incentive and opportunity risks are even more heightened when fraud-risk factors related to management's attitude reflect a high risk environment. Finally, auditors who assess fraud with decomposition significantly perceive a higher need to revise audit plans and increase the extent of audit testing than do auditors who make categorization judgments alone.

Keywords: Fraud-risk assessments, judgment decomposition

JEL Classifications: M40, M41, M49

Working Paper Series

Bank Secrecy, Illicit Money and Offshore Financial Centers

Bank Secrecy, Illicit Money and Offshore Financial Centers

Pierre M. Picard
Centre de Recherche en Économie Appliquée (CREA); University of Manchester - School of Social Sciences; CESifo (Center for Economic Studies and Ifo Institute for Economic Research); Universite du Luxembourg

Patrice Pieretti
Universite du Luxembourg; Centre de Recherche en Économie Appliquée (CREA)


May 2009

Paolo Baffi Centre Research Paper No. 2009-45

Abstract:     
International and national institutions regularly put pressure on offshore financial centers and their clients to enforce compliance with anti-money laundering regulations and that in spite of the existence of bank secrecy. This paper discusses the winners and losers of such policies. Surprisingly, aggregate proffits and tax revenues can increase under those policies. In addition, we show that offshore banks can be encouraged to comply with rigorous monitoring of the investor's identity and the origin of his/her funds when the pressure creates sufficiently high risk of reputational harm to this investor. Nevertheless, the effcient pressure policy is dichotomous in the sense that a social planner chooses zero pressure or the pressure that just entices offshore banks to comply. By contrast, the implementation of those pressure policies on an onshore institution may be inefficient. Finally, we show that deeper financial integration fosters compliance by the offshore center while it also gives better incentives for delegated organizations to effectively induce compliance.

Keywords: money laundering, offshore banking, compliance

JEL Classifications: F21, K42

Working Paper Series

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1411584