Posted by Megan Kerrigan.
Today, the world is unpredictable and changing rapidly. We see a new president, a worldwide pandemic, a lack of jobs for Americans, and the changing of our everyday lives. With COVID-19, we see the world dealing with large business and financial disruption. Since the shutdown the government started pumping large sums of money into the global economy in the hope this will improve the financial issues families are having. With all these factors coming into play, we see that corruption and fraud are most likely to occur with people working from home and the lack of regularity. “Now, there is likewise understandable concern that the significant public health and economic impacts of the pandemic, including in connection with the substantial governmental expenditures, will further fuel white-collar offenses” (Debevoise). Individuals are struggling due to the pandemic with a lack of income and financial stability and that will promote white color crimes to take place. Americans will have a strong motive to support their families in a time like this. The intent to act on crimes will be stronger than ever.
We see most companies today having to work from home to slow the spread of the virus. Working from home is the only option for businesses and American to make money and survive. Due to the lack of communication in the office and lack of materials with everyone working from home, we will see certain types of white-collar crimes slow down. This is because of the lack of fast interaction between one another and response times. Enforcement agencies are prioritizing safety with individuals who are working remotely. People might think that the agencies are not being as strict with the current dilemma, but they are mistaken.
“Enforcement agencies in the United States and Europe have stated that their objective is vigorously to prosecute violations of anti-fraud and anti-corruption laws, particularly in the context and aftermath of COVID-19” (Debevoise). These agencies have a list of top priories to look at as well as known challenges they understand they will be facing. The top is fraud and corruption. The Organization for Economy Cooperation and Development said that this pandemic and the disruption in the economy will create an environment almost too easy for corruption to occur. The healthcare sector has a large opportunity for bribery and corruption. “The scope for potential corruption is wide-ranging, including in procurement, product development, and dissemination, as well as medical fraud. This is exacerbated by the urgency of securing medication, ventilators, and PPE amidst global scarcity concerns” (Debevoise). People are going to do whatever they possibly can to make sure they are safe, even if it breaks the law. Enforcement is taking action and have taken a proactive approach to these issues.
Another area where white-collar crimes are more than ever going to be circulating is the abuse in regulated financial markets. Due to the extreme market volatility with his pandemic we see a large increase in market abuse. Businesses are still required to meet standards despite the disruption with the pandemic, but agencies also understand they need to provide some relief by deferring reporting deadlines. This gives businesses time to get information together without penalties. SEC has not slowed down the cases and is still working on cases and prosecuting new ones but also delayed reporting requirements due to the CARES ACT terms.
COVID-19 has affected restaurants, gyms, hotels, family-owned businesses, auto industries, airlines, corporations, individuals, enforcement agencies, and many more. Everyone is still trying to adapt to the constant changes while keeping up with making sure illegal acts are not occurring. Enforcement agencies are continuing to investigate and prosecute white-collar crimes and misconduct because they know that economic and financial crime will increase in the wake of the pandemic. I personally feel that Americans need to be aware of this to try to defer any act of fraud or corruption that is motivated by a lot of individuals due to this pandemic.
Megan is a master’s in accounting student at the Feliciano School of Business, Montclair State University.
https://www.debevoise.com/insights/publications/2020/05/white-collar-crime-and-covid-19-enforcement-in-a (Links to an external site.)