Deck 12: White-Collar and Corporate Crime

Question 1

The _________, passed by Congress in 1890, authorized the prosecution of corporations engaged in monopolistic practices.

A) Sherman Antitrust Act
B) Congressional Antitrust Act
C) Sarbanes-Oxley Act
D) Dodd-Frank Wall Street Reform and Consumer Protection Act

Answer 1

Sherman Antitrust Act

Question 2

Which of the following statements is True about white-collar crimes?

A) They are easy to detect.
B) They are extremely difficult to commit.
C) They can be committed by a corporation as well as by an individual.
D) They exclude offenses related to bankruptcy fraud and insider-related fraud.

Answer 2

They can be committed by a corporation as well as by an individual.

Question 3

_________ crimes are crimes committed by individuals for themselves in the course of rendering a service.

A) Corporate
B) Service
C) Occupational
D) Institutional

Answer 3

Occupational

Question 4

The practice of trading a client's shares of stock frequently in order to generate large commissions is known as

A) burning.
B) stock manipulation.
C) insider trading.
D) churning.

Question 5

_________ is the use of material, nonpublic financial information to obtain an unfair advantage in trading securities.

A) Insider trading
B) Churning
C) Stock manipulation
D) Burning

Question 6

Operations run by stock manipulators who, through deception and misleading sales techniques, seduce unsuspecting and uninformed individuals into buying stocks in obscure and often poorly financed corporations are referred to as

A) pink rooms.
B) boiler rooms.
C) steam rooms.
D) scam rooms.

Question 7

Any scam designed to take advantage of loopholes in the bankruptcy laws is known as

A) financial fraud.
B) insider trading.
C) bankruptcy fraud.
D) embezzlement.

Question 8

Which of the following is not one of the four common bankruptcy scams?

A) the similar-name scam
B) the old-company scam
C) the successful-business scam
D) the corporate pirate scam

Question 9

Which of the following scams involves a profitable corporation that is well positioned in the market but is forced into bankruptcy after new owners have bilked the corporation of all of its money and assets?

A) the successful-business scam
B) the corporate pirate scam
C) the old-company scam
D) the new-company scam

Question 10

An important step to curb government contract fraud was taken with the passage of the _________, creating a separate offense of government contract fraud in excess of $1 million.

A) Fraudulent Contract Act
B) Major Fraud Act
C) Sherman Antitrust Act
D) Wedtech Act

Question 11

Which of the following statements is True about insider-related fraud?

A) It uses bait-and-switch advertising techniques to scam customers.
B) It excludes the sale of any confidential information.
C) It involves the use and misuse of one's position for pecuniary gain or privilege.
D) It is an old-company scam that is used by a company when it is losing money in the market.

Question 12

_________ crime is a criminal act committed by one or more employees of a corporation that is attributed to the corporation itself.

A) Organizational
B) Employee
C) Institutional
D) Corporate

Question 13

Which of the following statements is True about switch-and-bait advertising?

A) It is a type of fraud that is carried out by amateur thieves who embezzle huge sums of money from their customers.
B) It is the most common form of telemarketing fraud.
C) It involves offering a consumer an inferior product at a higher price as a substitute for a product that is out of stock.
D) It enables a consumer to buy products at a price below their original selling price.

Question 14

The decision in what 1909 case caused courts to review a wide variety of criminal cases against corporations?

A) People v. The Transcontinental Railroad
B) New York Central Railroad
C) In re People of Hawk's Nest, West Virginia
D) United States v. Ford Motor works

Question 15

An artificial person created by state charter is known as a

A) dummy.
B) mock person.
C) corporation.
D) prosthetic business.

Question 16

In the context of corporate culpability, which of the following models assumes that a corporation is to blame where practices and procedures are inadequate to prevent the commission of a crime?

A) proactive corporate fault
B) reactive corporate fault
C) constructive corporate culpability
D) corporate stock culpability

Question 17

In the context of corporate culpability, when an organization's personality encourages its agents to commit criminal acts, there is liability under a theory of _____.

A) corporate ethos
B) corporate policy
C) organizational steering
D) organizational overutilizing

Question 18

Which of the following statements is True about the Environmental Protection Agency (EPA)?

A) It was created by the Clean Water Act in 2014.
B) It monitors plant discharges all over the United States.
C) It cannot enforce federal statutes relating to the protection of the environment.
D) It cannot take action against private industry or municipal governments.

Question 19

Congressional sentencing guidelines significantly increased sanctions for corporate crime but also allowed companies large reductions in fines where there was evidence of

A) a sincere apology.
B) little real impact of the crime.
C) organizational due diligence.
D) a conspiracy among employees.

Question 20

Some of the problems recognized by governments in fighting corporate crime include which of the following?

A) a broad range of federal and state statutes exist in the area of corporate misconduct
B) the importance of attacking this problem at the international level
C) the lack of disincentives for illegal acts
D) none of these

Question 21

The Sherman Antitrust Act, passed by Congress in 1890, authorized the prosecution of corporations engaged in monopolistic practices.

Question 22

Churning is the use of material, nonpublic financial information to obtain an unfair advantage in trading securities.

Question 23

Business opportunity fraud is not a type of consumer fraud.

Question 24

Embezzlement is the conversion of property or money with which one is entrusted or for which one has a fiduciary responsibility.

Question 25

The world's legal systems include many highly effective laws and mechanisms to curb destruction of the environment.

Question 26

Compare the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Wall Street Reform and Consumer Protection Act. What do both laws accomplish? How do they help, and how might they hurt?

Question 27

The text discusses eight categories of white-collar offenses committed by individuals. Discuss five of these.

Question 28

Discuss the four models of corporate criminal liability.

Question 29

Discuss the issue of environmental crime. Explain why it is so difficult to enforce legislation preventing environmental crime.