Most common crimes committed by Corporations

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In White collar crime, Corporate Crime is also classified as Organizational or Occupational Crime. The offence committed by the Corporation, as a separate legal body, varies from that of a normal individual, and the Corporation is responsible and guilty for the act.  Corporations have now become an integral part of our society, and with the growth of businesses, they have become a critical player in our economy. However, our society runs the risk of being abused by these corporations, and they must be prevented as well. The issue of corporate crime is peculiar and complex for a number of reasons, the first of which is the existence of the corporate form. The expansion of vicarious liability to cover mens rea violations culminated in the rise of corporate criminal liability. The current article evaluates the past, existence, and forms of corporate crime.


A company can only act through human beings and a human being who commits an offence on account of or for the benefit of a company will be responsible for that offence himself. The importance of incorporation is that it makes the corporate itself liable in sure circumstances, further because the human beings.-Glanville Williams

 In simple term, corporation means a group of persons coming together to carry a business. Corporation is a business recognised by law. The evolution of the concept of corporate crime which was characterised by the judiciaries to overcome the problems of assigning criminal blame to fictional entities. The main principle of corporate crime is based on the doctrine of respondent superior. Corporations are the most important part of our society.

 When a corporation or an individual maliciously alters and conceals confidential information in attempt to make it look healthier, this is referred to as corporate crime or fraud. Companies use a variety of techniques to commit corporate frauds, such as misrepresentation in prospectuses, accounting record manipulation, debt concealment, and so on. Corporations are managed by natural people, and these individuals’ acts can be illegal in nature, but they may also result in economic and human losses to society. As a consequence, knowing the past, existence, and types of corporate crimes is important for a better understanding of the issue.

History of Corporate crime 

The corporation, an organisational form which was established in the 14th century and it was created and granted only by the crown or by an act of the parliament. The crown attempted to build up the ideas and it encouraged organisations to become legally authorised. Corporations grew up in the sixteenth and seventeenth centuries as hospitals, colleges, and other related organisations that were adapted to the corporate form. The business grew as a joint stock company by the end of this era. This joint stock company was particularly beneficial in promoting new industries. Corporations started out as non-profit organisations, but by the seventeenth century, they had directed their focus to profit. During the end of the seventeenth century, incorporated companies were formed on a large scale, but most of companies were run for the benefits of the investors as well as the benefit of the employee profit and most of them had a short span of life.

Since the investors lost money in the company and were complicit in the misdeeds. The British parliament, on the other hand, passed special laws for corporate activities. The basic rule of criminal liability revolves round the basic Latin maxim actus non facitreum, inconclusive mens sit re. t implies that in order to hold anyone accountable, it must be shown that an act or omission was committed that was unlawful under the law and was performed with a guilty mind. Within the first half of the twentieth century, courts started to hold businesses reprehensibly responsible in a number of places where social regulation was obstructed although there was no corporate liability. Indeed, courts were soon willing to hold the company criminally responsible for all wrongdoings except rape, murder, and other crimes.

Nature and Types of crimes

Corporate crimes are known to be general forms of white collar crimes, and this concept is often extended to activity crimes. The distinction between corporate crimes and the occupational crimes is that the corporate crimes refers to the criminal act of the corporate managers for the benefit of the corporation, the occupational crimes refers to the individual employees who is against the corporation itself. 

Theft, money laundering, and other workplace crimes, for example. When it comes to “corporate crime,” the wrongs committed by managers or workers for the benefit of the company as well as for personal gain are referred to as “actions against the business.” Independently committed offences are not the same as those committed by corporations. As a consequence, there is no special division for the crimes committed by companies. Corporate crime comes in a variety of ways. Major types of corporate crimes are bank fraud, bribery, , embezzlement ,counterfeiting and blackmail etc. 

Various frauds Include 

Securities fraud: The Securities and Exchange Board of India Act, 1992 (SEBI Act) and Rules framed thereunder address, among other things, fraudulent buying, selling, or dealing in securities; and using or employing any manipulative or deceptive device or contrivance in connection with the issue, purchase, or sale of a security listed or proposed to be listed in violation of the Act or the Rules. Any act, gesture, omission, or concealment committed by a person with his connivance or by an agent to trade in securities, whether or not in a dishonest manner (whether or not there is any wrongful benefit or avoidance of any loss), as well as a knowing misrepresentation of the truth or concealment of material fact, is called fraud. The Board constituted under the SEBI Act has the authority to prohibit deceptive or unfair trade practises in the securities markets. Failure to supply details, failure by any agent to enter into any arrangement with clients, failure to address investors’ grievances, result in penalties.

Also Read  Sarla Verma & Ors. v. Delhi Transport Corporation & Anr. (2009)

Accounting fraud: Forgery, falsification of accounts, and professional misconduct such as failure to disclose a material fact that is not reported in a financial statement or failure to reveal a material misstatement that is to appear in a financial statement are all forms of accounting fraud. The Central Government has the right to inspect a company’s books of accounts, direct special audits, order inquiries, and bring criminal charges under the Companies Act of 1956. Forgery and falsification of records are punishable under the Indian Penal Code.

Insider trading Insider trading is prohibited under the SEBI Act. When in possession of unpublished price-sensitive information, no “insider” shall (directly or indirectly) trade in shares of a publicly traded firm. Furthermore, an insider is forbidden from contacting, informing, or procuring unpublished price sensitive information to others. SEBI brings criminal charges against insider trading in shares. The fine may be as much as USD 5 million, or three times the profit gained from insider trading, whichever is greater. SEBI also notified the Prohibition of Insider Trading Laws, 2015, in order to effectively curb malpractice in the stock market and provide a fair playing field for investors, as part of its anti-insider trading stance. The concept of a “insider” or “related person” has been greatly extended as a result of the Regulations. As a consequence, if he is supposed to have access to or possess unpublished price-sensitive information, any person, whether or not related to the company, may be subject to the Regulations. The new Regulations characterize trading more clearly and mandate a more rigorous disclosure regime. The Regulations require certain groups of individuals in a company whose shares are listed on a stock exchange to make initial and continuing reports, as well as public disclosure requirements for the company. Furthermore, every publicly listed company’s board of directors is required to establish and publish a code of practises and procedures for the disclosure of unpublished price-sensitive information.

Embezzlement Embezzlement is described as a fraudulent breach of trust or a dishonest misappropriation of property under the IPC. The person entrusted with such property should have either dishonestly misappropriated or converted it to his own use, or used and disposed of it in a way that was unlawful. The punishment for the crime is either a two-year jail sentence or a fine, or both.

Bribery of government officials The Prevention of Corruption Act of 1988 is the legislation that deals with bribery of government officials. The following public servant/other individual crimes are illegal under the Act: I Receiving gratification in exchange for an official act other than legitimate remuneration. (ii) Gaining gratification by dishonest or unlawful means in order to sway a public official. (iii) Gaining gratification through the use of personal influence over a public official. (iv) A public servant receiving valuable objects without the permission of the person involved in the proceedings or business undertaken by the public servant. The Act further makes abetment by a public official punishable, whether or not the offence has been committed. Acceptance, or agreement to accept or seek to receive such gratification, is sufficient to constitute an offence for any of the above offences. A public official can also be charged with criminal wrongdoing if he or she uses his or her position to obtain an economic reward for himself or others. Other rules, like the Indian Penal Code, the Benami Transactions (Prohibition) Act, and the Prevention of Money Laundering Act, are also used to prosecute activities including bribery of government officials.

Criminal anti-competition The Indian anti-competition laws do not envisage any criminal prosecution.

Cartels and other anti-trust laws: In India, remedies for cartel and other competition offences are civil in nature, meaning they can take the form of a cease-and-desist order, a fine, or both. However, deliberate violation of these orders or failure to pay the penalty will result in a sentence of up to three years in prison or a fine of up to Rs 250 million. The Magistrate has the authority to take cognizance of the offence if the complaint is lodged by the Competition Commission or a person approved by it. 

Tax crimes Under the Income Tax Act, 1961, the Customs Act, 1962, the Central Sales Tax Act, 1956 & VAT, and the Central Excise Act, 1944,

Market manipulation in connection with the sale of derivatives : The Securities Contracts (Regulation) Act, 1956 (SCR Act) and the Securities and Exchange Board of India Act, 1992 (SEBI Act), as well as the Laws, Regulations, and Circulars issued thereunder, regulate the selling of derivatives. The use of misleading and fraudulent devices, insider trading, and significant acquisition of shares are all prohibited under Section 12 A of the SEBI Act. It states that no person shall, among other things, use or employ any manipulative or deceptive device or contrivance in connection with the issue, purchase, or sale of any securities listed or proposed to be listed on a recognised stock exchange in violation of the SEBI Act or the Rules or Regulations made thereunder. Infringement on these provisions is punishable under section 24 of the SEBI Act, which carries a penalty penalty to ten years in prison (with a fine which may extend to Rupees 250m or both).

Also Read  Sarla Verma & Ors. v. Delhi Transport Corporation & Anr. (2009)

Money laundering or wire fraud

Money laundering offences are charged under the provisions of the Prevention of Money Laundering Act of 2002. (PMLA). In 2009, the PMLA was revised, and then again in 2012. The offences are mentioned in the Act’s Schedule. The Act imposes responsibilities on reporting agencies (banking firms, financial institutions, and intermediaries), including record-keeping, information confidentiality, and so on. The Financial Intelligence Unit – India is expected to collect information from reporting entities (a central national agency responsible for processing, analysing and disseminating information relating to suspect financial transactions). Only authorities appointed by the Central Government, such as the Directorate of Compliance, may launch an investigation (DOE). The Act provides a list of officers, such as police officers and Reserve Bank officers, that will assist the authorities in implementing the Act. The Act creates arrangements with foreign countries in order to promote information exchange. It states that the Central Government can enter into an agreement with the government of any country outside of India for the purposes of: (a) implementing the Act’s provisions; or (b) sharing information for the prevention of any offence under the Act or the corresponding law in force in that country, or an investigation of cases relating to any offence under this Act. If convicted of money laundering, the PMLA provides for a maximum term of seven years in jail.

Cybersecurity law

The Information Technology Act, 2000 (“Act”) and the Amendment Act, 2008 were passed by the Indian Parliament to deal with technology in the fields of e-commerce and e-governance, as well as to prescribe penalties for breaches of the Act. The Act applies to any person who commits an offence or contravention outside of India if the act or conduct that constitutes the offence or contravention includes a device, computer system, or computer network in India. The Act stipulates penalties for a variety of crimes, including cyber-terrorism, identity theft, privacy infringement, and sending offensive messages, among others. The Amendment Act of 2008 defined corporate responsibility for data safety, providing that if a body corporate is negligent in enforcing fair security procedures, causing unfair benefit or harm to any person, the body corporate shall be liable to pay damages by way of compensation to that person. Forgery of electronic documents, destruction of electronic evidence, and other offences are now punishable under the Indian Penal Code, 1860 (as amended by the Act). Section 43 of the Act lists a variety of crimes for which a person can be held liable to pay damages to the person who has been injured. Infusing viruses into a computer network, destroying a computer network, or refusing access to a computer system are among the offences. The Act’s quasi judicial bodies, namely adjudicating officers established under Section 46, adjudicate these offences. The Cyber Appellate Tribunal will hear the first appeal. A second appeal can be lodged with the High Court of Justice, which has jurisdiction. In addition, Section 66 of the Act imposes criminal penalties for computer-related crimes that come under Section 43, such as cyber-terrorism, identity fraud, and so on.


The conduct of a company or workers working on behalf of a corporation that is prescribed or punishable by statute is referred to as corporate crime. As a consequence, corporate crimes are committed for the benefit of the corporation or to injure another individual or organisation. Such crimes are committed in a peaceful environment. These are often known as general categories of white-collar crimes. Corporate crimes are actions that are socially injurious or blameworthy and cause financial, physical, or environmental damage, as well as harm to employees and the general public. Corporate criminal activity is believed to be the product of a learning process associated with corporate operations. This conduct has also been related to important social and moral changes. These acts have also been related to important social and moral changes. It is likely that illegal means may be used in order to achieve objectives or goals. There’s also the neutralisation principle, which attempts to explain actions in particular situations. Inadequate supervision can also facilitate illegal activity .In corporate control, there is criminality on the part of the company as well as liability on the part of the responsible individuals, which can be fixed vicariously. In this case, the law ought to be more explicitly defined.

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