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The frequency of corporate misconduct: public enforcement versus private reality

Eugene Soltes (Department of Business Administration, Harvard Business School, Boston, Massachusetts, USA)

Journal of Financial Crime

ISSN: 1359-0790

Article publication date: 7 October 2019

1084

Abstract

Purpose

Perceptions about the frequency of misconduct – among the public, academics and even regulators – have largely been formed by examining enforcement statistics, which rely on the detection and sanctioning of the misconduct. This study aims to illuminate the real occurrence of corporate misconduct, much of which escapes public detection.

Design/methodology/approach

By examining confidential firm records describing misconduct within organizations, the author shows that public enforcement statistics significantly underestimate the amount of serious malfeasance that arises within firms.

Findings

Through analyzing records for several large multinational firms, the author finds that there are, on average, more than two instances of internally substantiated misconduct per week per firm.

Originality/value

Ultimately, this analysis illustrates the challenge of addressing corporate malfeasance within large organizations.

Keywords

Acknowledgements

I would like to thank Jihwon Park, Alexa Scherf, Grace Liu, participants at the Cambridge International Symposium on Economic Crime and students in Corporate Criminal Investigations at Harvard Law School for helpful feedback on earlier drafts.

Citation

Soltes, E. (2019), "The frequency of corporate misconduct: public enforcement versus private reality", Journal of Financial Crime, Vol. 26 No. 4, pp. 923-937. https://doi.org/10.1108/JFC-10-2018-0107

Publisher

:

Emerald Publishing Limited

Copyright © 2019, Emerald Publishing Limited

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