Exam 42: Opportunity Structures for White-Collar Crime

Correct Answer:

Answered by Examlex AI Copilot

The client may be seen as responsible for enabling the stock fraud to occur in several ways. Firstly, the client may have failed to conduct thorough due diligence on the broker and the investment opportunity, leading to a lack of awareness of potential red flags or warning signs. Additionally, the client may have been overly trusting or complacent, failing to question suspicious behavior or irregularities in their investment accounts. Furthermore, the client may have been motivated by greed or a desire for quick profits, leading them to turn a blind eye to potential risks or warning signs.

On the other hand, the firm must also be seen to shoulder some responsibility for enabling the stock fraud to occur. The firm may have failed to adequately screen and monitor their employees, allowing individuals with a history of misconduct or unethical behavior to operate within the organization. Additionally, the firm may have fostered a culture that prioritized sales and profits over ethical conduct, creating an environment where fraudulent behavior could thrive. Furthermore, the firm may have lacked proper internal controls and oversight mechanisms, allowing for fraudulent activities to go undetected.

In conclusion, both the client and the firm must be seen to share some responsibility for enabling stock fraud to occur. By recognizing and addressing these areas of responsibility, measures can be put in place to prevent similar white collar crimes from happening in the future.