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Each of the last three decades has witnessed an intense public reaction to a distinctive type of "white collar" crime. In the early 1960's, public attention was riveted by the Electrical Equipment conspiracy and the image of senior corporate executives of major firms meeting clandestinely to fix prices. In the mid-1970's, the focus shifted to corporate bribery, as the media ran daily stories regarding questionable payments abroad and illegal political contributions at home. The representative white collar crime of the 1980's is undoubtedly "insider trading." The archetype of this new kind of criminal in the public's mind is Ivan Boesky (or perhaps his fictional counterpart, Gordon Gekko, from the movie Wall Street).

In response to each of these scandals, there has been much moralizing, some legislation, and ultimately a few academic voices expressing concern that the legislative response was hasty and overbroad. The phrase "overcriminalization" first entered the lexicon of the criminal law with respect to morals legislation in the late 1950's, but in the wake of the 1960's price-fixing scandals it was extended to apply to economic crimes as well. In particular, Professors Herbert Packer of Stanford and Sanford Kadish of Berkeley suggested that there were unnoticed and significant costs in using the criminal law to enforce economic regulations. They warned that over-reliance on the criminal law would erode its moral authority, misallocate its enforcement resources, and invite discriminatory and selective prosecutions. All these dangers were greatest, they claimed, when the regulated behavior was not generally recognized as immoral by the public at large. The "illegal payments" crisis of the 1970's spawned the Foreign Corrupt Practices Act, and another debate ensued about the role of the law in regulating corporate governance.


Criminal Law | Law | Securities Law