The Most Common Business Crimes

May 17, 2021
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One thing is common among business crimes; it is usually a violation of trust for financial gain. The consequences of business crimes can be disastrous because it usually results to significant financial losses, damage to the reputation and threat to the organization’s existence. Companies must take a firm stance against business crimes by assessing their risks and taking the necessary security measures.

Different types of business crimes

Securities fraud – the most common type of security fraud is insider trading. Someone inside the company usually has information about the company and its investments and decides to trade on the information. For example, an executive who possesses confidential information about upcoming company earnings may decide to sell a chunk of his shares of stock for financial gain. His action can be considered as securities fraud.

Another type of securities fraud occurs when somebody seeks investment to a company but knowingly misstates his prospects, health and finances. The investor is lured to put up some money based on false and misleading information.

Embezzlement – is a common crime where an employee improperly takes money from someone to whom he owes some type of duty. The employee embezzles the money of his employer by siphoning some of the company’s money to his personal account. On the other hand, it is not only employees who can embezzle a company. Lawyers that are improperly using their client’s funds also commit embezzlement including investment advisers who improperly use their client’s money that they have been entrusted to protect.
Business espionage – is also called industrial espionage. The crime involves the theft of ideas, knowledge, technical know-how or data. Technology-based companies are the common victims of industrial espionage particularly those involved in software and hardware, aerospace, telecommunications and machine technologies. If a trade secret is stolen, it can level the playing field or even tip it in favour of a competitor. Business espionage is a threat to companies that are dealing with information. A dissatisfied employee can steal information and sell it a competitor for financial gain or to discredit the company.
Money laundering – is a criminal act where illegally obtained money is filtered through a series of transactions that aims to make the money appear legitimate. Dirty money is deposited to a financial institution like a bank or brokerage and then it is separated from its illegal origin through a series of complex transactions. Afterwards, the freshly cleaned money is mixed with legally obtained money by using it to purchase assets.

Numerous regulations have been enacted to stop business crimes but sometimes the business crime goes undetected for years. The effects of business crimes can be devastating and long-lasting and can force a company to file for bankruptcy. Months are invested into detailed investigations to discover the perpetuators and prosecute them in court.

Experienced lawyers can represent the business and its interests in the court of law. There are state and federal laws on business crimes including a wide range of possible punishments. A lawyer can help a company navigate any potential criminal liability using the right defences.