White collar crimes in the United States are governed by federal laws such as:
- the Securities Exchange Act of 1934;
- the Foreign Corrupt Practices Act (FCPA);
- the Racketeer Influenced and Corrupt Organizations Act; and
- fraud statutes under 18 USC §§ 1341 and 1343.
The Sarbanes-Oxley Act and the Dodd-Frank Act impose corporate governance and whistleblower protections. State laws complement federal enforcement by addressing crimes such as embezzlement and tax evasion.
The United States relies on bilateral mutual legal assistance treaties (MLATs) and multilateral agreements such as the United Nations Convention Against Corruption. These facilitate cross-border investigations, evidence sharing and extradition for crimes such as money laundering and bribery.
Key enforcers include:
- the Department of Justice (DOJ);
- the Securities and Exchange Commission (SEC); and
- the Federal Trade Commission.
The DOJ leads criminal prosecutions, using tools such as grand juries and subpoenas. The SEC handles civil enforcement in securities cases, employing administrative orders and litigation. Agencies such as the Office of Foreign Assets Control enforce financial sanctions.
These bodies collaborate domestically and internationally using agreements such as MLATs.
Authorities emphasise deterrence through:
- aggressive prosecutions;
- significant penalties; and
- corporate accountability.
Voluntary disclosures, self-reporting and robust compliance programmes can result in leniency via deferred prosecution agreements or non-prosecution agreements.
Yes, individuals and companies can be prosecuted. Under the doctrine of respondeat superior, employees’ actions are attributable to companies when they are:
- performed within the scope of employment; and
- intended to benefit the company, even partially.
Yes, foreign companies are subject to laws such as the Foreign Corrupt Practices Act (FCPA) if their conduct impacts on US markets or financial systems. For example, using US banks for transactions can establish jurisdiction.
Yes, successor liability applies when one company acquires another, particularly if the acquisition aims to shield the predecessor from liability. Due diligence during mergers is critical.
Yes, US laws such as the FCPA and wire fraud statutes have extraterritorial reach. Conduct abroad that affects US markets or involves US citizens can trigger jurisdiction.
Crimes include:
- securities fraud;
- insider trading;
- wire and mail fraud;
- bribery;
- tax evasion; and
- money laundering.
These typically involve:
- deception;
- abuse of trust; or
- manipulation for financial gain.#
Predicate offences are foundational crimes – such as bribery or obstruction of justice – that enable broader crimes, such as money laundering or Racketeer Influenced and Corrupt Organizations Act violations.
Thresholds such as monetary limits or restrictions to specific entities (eg, federally insured banks for fraud) apply in some cases. These ensure proportionality in enforcement.
Directors and officers can face liability for:
- securities fraud;
- insider trading;
- false certifications under Sarbanes-Oxley; and
- failures in oversight or compliance implementation.
Compliance programmes are not mandatory but are essential for mitigating liability. They should include:
- risk assessments;
- internal controls;
- training;
- whistleblower protections; and
- third-party monitoring.
Yes, inadequacy:
- can increase liability under sentencing guidelines; and
- may result in regulatory penalties or enhanced fines for violations.
Due diligence is required to assess legal, financial and ethical risks, particularly under:
- the Foreign Corrupt Practices Act (FCPA); and
- anti-money laundering laws.
This includes vetting high-risk jurisdictions and entities.
The FCPA and the Sarbanes-Oxley Act mandate accurate books and records to:
- prevent fraudulent accounting; and
- ensure transparency in financial operations.
Effective practices include:
- periodic audits;
- continuous training;
- risk-based monitoring; and
- the establishment of a strong ethical culture from leadership down.
Yes, public companies must report material irregularities under Securities and Exchange Commission rules. Voluntary disclosure to enforcement agencies can mitigate penalties.
Authorities consider:
- risk identification;
- the effectiveness of controls;
- leadership commitment; and
- the programme’s adaptability to evolving risks.
Investigations often begin with:
- whistleblower complaints;
- suspicious activity reports filed by financial institutions;
- regulatory audits; or
- referrals from other enforcement bodies.
Authorities – including the Department of Justice and the Securities and Exchange Commission – can:
- issue subpoenas;
- conduct interviews;
- execute search warrants;
- freeze assets; and
- use tools such as wiretaps or surveillance where legally permissible.
Yes, subpoenas compel the production of documents. Searches and seizures require a court-issued warrant based on probable cause, unless the company consents voluntarily.
Yes, cooperation occurs via mutual legal assistance treaties and international organisations such as Interpol. US authorities request evidence or conduct joint investigations with foreign regulators.
They are protected by constitutional rights, including against:
- self-incrimination (Fifth Amendment); and
- unreasonable searches (Fourth Amendment).
Legal counsel can represent them during interviews and companies may challenge overbroad subpoenas.
Attorney-client privilege protects confidential legal communications, but it does not apply if the communications further illegal activities under the crime-fraud exception.
Authorities consider factors such as:
- the harm caused;
- the strength of the evidence;
- intent;
- cooperation; and
- the effectiveness of the company’s compliance programme.
Federal courts handle most white collar crimes, with cases starting in district courts. Appeals are heard by circuit courts and cases of national importance may reach the US Supreme Court.
Yes, defendants have a constitutional right to a jury trial under the Sixth Amendment unless they waive this in favour of a bench trial.
The statute of limitations is typically five years, but may extend to 10 years for:
- crimes such securities fraud; or
- violations involving financial institutions.
Yes, voluntary disclosure and cooperation can result in:
- reduced penalties;
- deferred prosecution agreements (DPAs); or
- non-prosecution agreements (NPAs).
While not a full defence, an effective compliance programme can:
- mitigate penalties; and
- demonstrate the company’s commitment to lawful practices.
Defences include:
- lack of intent;
- insufficient evidence;
- procedural errors; and
- reliance on expert legal advice.
Yes, plea bargains, DPAs and NPAs are common, allowing resolution without trial while requiring remedial actions or penalties.
Penalties include:
- fines;
- restitution;
- imprisonment;
- probation; and
- asset forfeiture.
Additional penalties are also possible, such as:
- debarment;
- loss of professional licences; and
- corporate dissolution.
Defendants can appeal convictions or sentences based on:
- errors in law;
- procedural misconduct; or
- constitutional violations.
Appeals are heard by state or federal appellate courts.
Alternatives include:
- deferred prosecution agreements;
- non-prosecution agreements;
- civil enforcement actions; and
- administrative penalties, such as fines or licensing restrictions.
Authorities negotiate settlements that may require:
- admissions of wrongdoing;
- financial penalties;
- implementation of compliance measures; or
- external monitoring.
Factors include:
- the extent of cooperation;
- the harm caused;
- prior compliance efforts; and
- the likelihood of future compliance.
Alternatives are increasingly common due to their efficiency and focus on remediation. Greater enforcement resources and corporate accountability initiatives could further drive their use.
Yes, private actions such as shareholder derivative suits or class actions can be filed in civil courts. These follow standard litigation processes, including discovery and trial.
Relief includes:
- monetary damages;
- restitution;
- injunctive relief; and
- in some cases, punitive damages.
Awards depend on the harm proven and judicial discretion.
Yes, decisions can be appealed in state or federal appellate courts, focusing on procedural or substantive issues.
Cyber laws address:
- online fraud;
- identity theft; and
- cyber-enabled money laundering.
Agencies often pursue violations under both white collar and cybersecurity statutes, such as the Computer Fraud and Abuse Act.
Best practices include:
- implementing cybersecurity measures;
- monitoring insider threats;
- safeguarding sensitive data; and
- complying with data protection laws such as:
-
- the General Data Protection Regulation; and
- the California Consumer Privacy Act.
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- Tailor compliance programmes to specific risks.
- Ensure leadership buy-in.
- Conduct regular training.
- Avoid:
-
- neglecting third-party risks;
- failing to address whistleblower reports; or
- underestimating the need for constant updates to regulatory changes.
