1 Legal and enforcement framework
1.1 Which legislative and regulatory provisions govern white collar crime in your jurisdiction?
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.
1.2 Which bilateral and multilateral instruments of relevance to white collar crime have effect in your jurisdiction?
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.
1.3 Which bodies are responsible for enforcing the applicable laws and regulations? What powers do they have?
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.
1.4 What is the general approach of the authorities in enforcing the applicable laws and regulations?
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.
2 Scope of application
2.1 Can both individuals and companies be prosecuted under the white collar crime laws? Under what circumstances are employees' actions attributable to the company?
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.
2.2 Can foreign companies be prosecuted under the white collar crime laws?
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.
2.3 Can successor companies be prosecuted under the white collar crime laws?
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.
2.4 Do the white collar crime laws have extraterritorial reach?
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.
3 Offences
3.1 What types of white collar crimes are recognised in your jurisdiction and what do they involve?
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.#
3.2 How are predicate offences defined in your jurisdiction?
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.
3.3 Do any restrictions or thresholds (eg, in terms of parties, asset type or transaction value) serve to limit the types of activities that constitute white collar crimes?
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.
3.4 What are the most common offences for which company directors and officers can be held personally liable?
Directors and officers can face liability for:
- securities fraud;
- insider trading;
- false certifications under Sarbanes-Oxley; and
- failures in oversight or compliance implementation.
4 Compliance
4.1 Is the implementation of a compliance programme a regulatory requirement in your jurisdiction? If so, what should this cover?
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.
4.2 Does failure to implement an adequate compliance programme constitute a regulatory and/or criminal violation in your jurisdiction?
Yes, inadequacy:
- can increase liability under sentencing guidelines; and
- may result in regulatory penalties or enhanced fines for violations.
4.3 What due diligence requirements apply in relation to customers, partners, suppliers etc?
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.
4.4 What books and records requirements apply in this context?
The FCPA and the Sarbanes-Oxley Act mandate accurate books and records to:
- prevent fraudulent accounting; and
- ensure transparency in financial operations.
4.5 What other compliance best practices should a company implement to mitigate the risk of white collar crime?
Effective practices include:
- periodic audits;
- continuous training;
- risk-based monitoring; and
- the establishment of a strong ethical culture from leadership down.
4.6 Must companies report financial irregularities or actual or potential violations?
Yes, public companies must report material irregularities under Securities and Exchange Commission rules. Voluntary disclosure to enforcement agencies can mitigate penalties.
4.7 What factors will the authorities consider in assessing the adequacy of a compliance programme?
Authorities consider:
- risk identification;
- the effectiveness of controls;
- leadership commitment; and
- the programme's adaptability to evolving risks.
5 Investigations
5.1 How are investigations typically commenced in your jurisdiction?
Investigations often begin with:
- whistleblower complaints;
- suspicious activity reports filed by financial institutions;
- regulatory audits; or
- referrals from other enforcement bodies.
5.2 What investigative powers do the authorities have?
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.
5.3 Can the authorities demand that a company under investigation produce documents? When can the authorities search the premises and seize documents of a company under investigation
Yes, subpoenas compel the production of documents. Searches and seizures require a court-issued warrant based on probable cause, unless the company consents voluntarily.
5.4 Do the authorities typically cooperate with their foreign counterparts in conducting an investigation? If so, what is the process for doing so?
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.
5.5 What rights do companies and their directors and officers have during an investigation (eg, in relation to interviews/privacy and data protection)?
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.
5.6 What rules govern attorney-client privilege in your jurisdiction and what are their implications in the context of white collar crime investigations?
Attorney-client privilege protects confidential legal communications, but it does not apply if the communications further illegal activities under the crime-fraud exception.
5.7 What factors will the authorities consider in assessing whether to bring charges?
Authorities consider factors such as:
- the harm caused;
- the strength of the evidence;
- intent;
- cooperation; and
- the effectiveness of the company's compliance programme.
6 Enforcement
6.1 What is the structure of the criminal courts in your jurisdiction?
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.
6.2 Are white collar crimes tried by jury in your jurisdiction?
Yes, defendants have a constitutional right to a jury trial under the Sixth Amendment unless they waive this in favour of a bench trial.
6.3 What is the statute of limitations for prosecuting white collar crime in your jurisdiction?
The statute of limitations is typically five years, but may extend to 10 years for:
- crimes such securities fraud; or
- violations involving financial institutions.
6.4 Can parties that voluntarily report white collar crime or cooperate with investigations benefit from leniency in your jurisdiction?
Yes, voluntary disclosure and cooperation can result in:
- reduced penalties;
- deferred prosecution agreements (DPAs); or
- non-prosecution agreements (NPAs).
6.5 Can the existence of a compliance programme constitute a defence to charges of white collar crime?
While not a full defence, an effective compliance programme can:
- mitigate penalties; and
- demonstrate the company's commitment to lawful practices.
6.6 What other defences are available to parties charged with white collar crime?
Defences include:
- lack of intent;
- insufficient evidence;
- procedural errors; and
- reliance on expert legal advice.
6.7 Can parties negotiate a pre-trial settlement through plea bargaining, settlement agreements or similar?
Yes, plea bargains, DPAs and NPAs are common, allowing resolution without trial while requiring remedial actions or penalties.
6.8 What penalties can be imposed for white collar crime? How are these determined? Can non-exhaustive penalties be imposed for such violations (eg, exclusion from public procurement, exclusion from entitlement to public benefits or aid, disqualification from the practice of certain commercial activities, judicial winding up)?
Penalties include:
- fines;
- restitution;
- imprisonment;
- probation; and
- asset forfeiture.
Additional penalties are also possible, such as:
- debarment;
- loss of professional licences; and
- corporate dissolution.
6.9 What rights of appeal are available?
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.
7 Alternatives to prosecution
7.1 What alternatives to criminal prosecution are available where the authorities find evidence of white collar crime?
Alternatives include:
- deferred prosecution agreements;
- non-prosecution agreements;
- civil enforcement actions; and
- administrative penalties, such as fines or licensing restrictions.
7.2 What procedures are involved in concluding an investigation in this way?
Authorities negotiate settlements that may require:
- admissions of wrongdoing;
- financial penalties;
- implementation of compliance measures; or
- external monitoring.
7.3 What factors will determine whether such alternatives to prosecution are to be offered to those who have been involved in white collar crime?
Factors include:
- the extent of cooperation;
- the harm caused;
- prior compliance efforts; and
- the likelihood of future compliance.
7.4 How common are these alternatives to prosecution? What, if anything, could lead to an increase in their use?
Alternatives are increasingly common due to their efficiency and focus on remediation. Greater enforcement resources and corporate accountability initiatives could further drive their use.
8 Private enforcement
8.1 Are private enforcement actions for white collar crims available in your jurisdiction? If so, where are they brought and what process do they follow?
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.
8.2 What types of relief may be sought and what types of relief are most commonly awarded? How is the relief to be awarded determined?
Relief includes:
- monetary damages;
- restitution;
- injunctive relief; and
- in some cases, punitive damages.
Awards depend on the harm proven and judicial discretion.
8.3 Can the decision in a private enforcement action be appealed? If so, how?
Yes, decisions can be appealed in state or federal appellate courts, focusing on procedural or substantive issues.
9 Cyber issues
9.1 How do the white collar crime laws dovetail with cyber laws in your jurisdiction?
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.
9.2 What specific considerations, concerns and best practices should companies be aware of with regard to white collar crime prevention in the cyber sphere?
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.
10 Trends and predictions
10.1 How would you describe the current white collar crime enforcement landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?
No answer submitted for this question.
11 Tips and traps
11.1 What are your top tips for the smooth implementation of a robust compliance programme and what potential sticking points would you highlight?
- 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.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
