Investigating and Prosecuting White-Collar Criminals

The Differential Management of Financial Illegalisms: Assigning Responsibilities in the Libor Scandal

“…Thinking of "cheating" or "rigging Libor" on its own would not be sufficient for criminal charges, but it is still an essential requirement. The principle of mens rea-"guilty mind"-is indeed a central component of criminal responsibility in common law countries, especially in white-collar cases (Dervan and Podgor 2016). In prosecutors' demonstrations, both objective responsibility-actions to manipulate-and subjective responsibility-state of mind inclined toward benefiting from this manipulation-are required to impute a motive on a defendant.…”

“…In criminal trials, the burden of proving a defendant guilty beyond reasonable doubt is strongly linked to the focus on mens rea— criminal intent—that prevails in white‐collar cases (Dervan and Pogdor : 575). The predominance of the criminal intent logic leads to a strong focus on the defendant's state of mind (Dervan and Podgor ; Mann ). However, evidence that could prove that illegal practices took place are not necessarily the same as evidence that could prove that the defendant had knowledge of the illegal character of his practices.…”

“…On the contrary, agreements that organizations enter into are not tied by the same requirements concerning burden of proof, and publicly available agreements do not make it possible to fully capture the extent of fraud—while negotiations with prosecutors on such agreements remain private. Furthermore, when entering into such agreements, organizations are often required to provide evidence to the government related to individual wrongdoings of their own employees (Dervan and Podgor : 573), which once more reinforces the opposition between individual and corporate responsibility. While important research has shown that the common law standard is strongly biased toward an individualist conception of liability (Sutton 2011)—a bias that makes it difficult to resolve certain social problems (Pedriana and Stryker )—this orientation is especially relevant to financial cases.…”

“…An important difference between these devices lies in the burden of proof they each require. In criminal trials, the burden of proving a defendant guilty beyond reasonable doubt is strongly linked to the focus on mens rea— criminal intent—that prevails in white‐collar cases (Dervan and Pogdor : 575). The predominance of the criminal intent logic leads to a strong focus on the defendant's state of mind (Dervan and Podgor ; Mann ).…”

“…While the former points to conduct undertaken to benefit the perpetrator, the latter points to conduct undertaken to benefit the organization. This distinction is important with regard to the assignment of responsibility, and even structures the prosecuting process itself (Dervan and Podgor ). However, it implies that the benefit of the misconduct can be attributed to one or the other, which is an especially difficult task considering that some acts can benefit both levels (Wheeler and Rothman : 405).…”