Recent high profile cases in the areas of foreign corruption, price fixing, deceptive marketing, insider trading, fraud and sexual assault in the workplace are examples of financial crimes. This course examines the ways in which criminal, regulatory and administrative law prevent harm in the conduct of commercial affairs. Cases such as SNC-Lavalin have demonstrated the intersection of alleged financial crimes with politics.
The role of media in covering financial crimes is studied in each lecture, which includes short film clips of movies that portray true crimes. Hollywood movies such as “The Wolf of Wall Street” (2013), may neglect to tell the story about the impact on victims. Documentaries such as “Trust No One: The Hunt for the Crypto King” (2022), “Downfall: The Case Against Boeing (2022), “The Talented Mr. Rosenberg” (2022), and “Madoff: The Monster of Wall Street” (2023), portray byzantine schemes. Hollywood movies based on true financial crime stories range from “Catch Me If You Can” (2002) to “The Laundromat” (2019). Gender and diversity in corporate compliance is highlighted in films such as “The Inventor: Out for Blood in Silicon Valley” (about Theranos Founder Elizabeth Holmes (2019), “Inventing Anna” (2022), and “She Said” (2022).
A core concept of this course is that risk management and compliance will lead to higher financial rewards. The priorities inherent in risk management must be related to a theory of justice which is formulated from behind a conceptual veil of ignorance where persons do not know their own wealth, position, gender, race or attributes (Rawls A Theory of Justice). Curiously, the issue of gender and racial diversity has not been in the forefront of most writing about risk management, compliance, or white collar crime. This course attempts to address that gap by encouraging dialogue and research about the link between compliance and both gender and racial equality in each of the eight conceptual parts.
The course is designed to cover both litigation skills in the area of financial crimes and corporate compliance skills with respect to risk, governance and mergers.
Part I, “Risk Management and Justice” explores the relation between risk, profit, and corporate scandals. An example is the case against Boeing where investigators reveal how Boeing’s alleged priority of profit over safety could have contributed to two catastrophic crashes within months of each other. Risk assessment and compliance is now mandated by statute in areas such as money laundering and prevention of terrorism funding. A mathematical risk matrix is developed which balances “precautions taken to avoid the event” versus “potential gravity of impact”.
Part II, “Models of Governance and Regulation” considers corporate governance as defined by the BCE case and the revised CBCA section 122(1.1). The expansion of administrative monetary penalties and the role of regulatory offences in addition to true financial crimes is explored within a pyramid model based on burdens of proof ranging from beyond a reasonable doubt (99%), clear and convincing evidence (75%) and the balance of probabilities standard (50.1%).
Part III, "Levels of Responsibility: Corporate versus Individual” reviews corporate liability concepts using case studies such as SNC-Lavalin and Global Fuels. The philosophical rationale for corporate liability is discussed with questions such as should corporations be criminally liable for offences arising from corporate culture?
Part IV, “Types of Financial Crimes and Violations” examines specific types of financial crimes including foreign corrupt practices such as bribery in relation to nuclear safety (Nordion 2016), facial recognition technology (Barra 2021) and e-services (Arapakota 2023), the general criminal offence of fraud (Debono and Debit Direct 2022), competition offences such as price fixing (Loblaws bread pricing) and wage fixing (2023) and securities offences such as insider trading and trading in securities while prohibited (Tiffin 2020). Students are encouraged to tailor make the course to their own areas of interest by choosing a topic for the research paper in that area.
Part V, “Compliance and change behavior” uses behavioral research to effect change at operational levels. Compensation models including paid whistleblower awards are analyzed.
Part VI, “Zone of non-discovery, internal investigations and deferred prosecution agreements” deals with internal investigations in the “zone of non-discovery by government”. The Nordion investigation is used as a case study of internal investigations and SNC-Lavalin is used as a case study of deferred prosecutions.
Part VII, “Inspections, Investigations, and Rights” reviews Charter rights as they may apply in relation to dawn raids, search warrants, privilege claims, and interviewing potential suspects.
Part VIII, “Remedies and Sentencing” is the last topic which is the mirror side of risk management. This topic is linked to the earlier study of the causes of crime and non-compliance.
