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Corporate Crime and Corporate Culture in Financial Institutions: An Australian Perspective

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White Collar Crime and Risk

Part of the book series: Palgrave Studies in Risk, Crime and Society ((PSRCS))

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Abstract

Recent financial market failures and corporate collapses have led to a loss of faith in many traditional legal regulatory tools used to control financial markets. The failure to successfully pursue criminal actions against senior officers in banks and financial institutions following the global financial crisis has raised questions regarding the utility of criminal prosecutions. A number of explanations for the declining use of criminal prosecutions and the use of other remedies, such as commercial settlements, have been given; this has often shifted the regulatory burden to shareholders and the community from company officers. This failure has led to a significant loss of trust in banking and financial institutions. Over the last decade, we have seen a renewed interest in the idea of corporate culture as a regulatory tool. Many financial regulatory authorities have sought to draw upon this idea in the regulation of financial institutions, although the fuzziness of the concept of culture has made it difficult to use as a prosecutorial tool. Despite some strident efforts to develop a legal model of corporate culture, it has yet to be applied widely and not at all to the financial services industry. It is unlikely to provide the “quick fix” that some market regulators had hoped for.

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Notes

  1. 1.

    The London Interbank Offer Rate.

  2. 2.

    Trotman, B, “UK investors could start forex lawsuits after banking trio settle for $1bn in US”, The Telegraph, 22 October 2015.

  3. 3.

    Rexrode, C and Glazer, E, “Tough act tracing billions in bank fines”, The Australian, 11 March 2016 at p. 25.

  4. 4.

    See further, Glazer, E and Rexrode, C, “Well boss grilled over bank’s accountability”, The Australian, 22 September 2016 at p. 25.

  5. 5.

    Chappell, Bill, “‘You Should Resign’: Watch Sen. Elizabeth Warren Grill Wells Fargo CEO John Stumpf,” National Public Radio, 20 September 2016. Available at: http://www.npr.org/sections/thetwo-way/2016/09/20/494738797/you-should-resign-watch-sen-elizabeth-warren-grill-wells-fargo-ceo-john-stumpf

  6. 6.

    Ibid.

  7. 7.

    Glazer and Rexrode, above at p. 25.

  8. 8.

    McCallister, D, “Well Fargo CEO Discusses Secret-Accounts Scandal in Senate Hearings”, National Public Radio, 20 September 2016; available at: http://www.npr.org/sections/thetwo-way/2016/09/20/494680201/wells-fargo-ceo-to-address-accounts-scandal-before-senate-panel

  9. 9.

    Ibid.

  10. 10.

    McCallister, above at p. 3.

  11. 11.

    As to why Australia managed to survive the GFC see further: Sykes, T, Six Months of Panic – How the Global Financial Crisis Hit Australia, Crows Nest, Allen & Unwin, 2010; Hill, JG, “Why did Australia fare so well in the global financial crisis?”, (pp. 203–300) in Ferran, E, N Moloney, JG Hill and JC Coffee, The Regulatory Aftermath of the Global Financial Crisis, Cambridge, Cambridge University Press, 2012.

  12. 12.

    See further, Garnaut, R with Llewellyn-Smith, D, The Great Crash of 2008, Melbourne, Melbourne University Press, 2009, at p. 48. For a Federal Court case which subsequently dealt with these transactions see: Wingecarribee Shire Council v Lehman Brothers Australia Ltd. (in liq) [2012] FCA 1028.

  13. 13.

    Financial Systems Inquiry, Final Report, December 2014; see further at: http://fsi.gov.au/publications/final-report/chapter-5/recommended-actions/

  14. 14.

    Quoted by White, A, “Banks face rising risk from conduct breach, says Fitch”, The Australian, 8 April 2016 at p. 22.

  15. 15.

    For a discussion of this point see: Bartholomeusz, S, “Labor politicians should curb the urge to bash banks”, The Australian, 13 April 2016.

  16. 16.

    Eyers, J, “Shorten uses Westpac ‘cowboys’ to justify royal commission call”, The Age, 17 May 2016, p. 7.

  17. 17.

    See for example, Williams, P, “Ex-CBA chief Norris backs bank culture”, The Australian Financial Review, 2 May 2016 at p. 17.

  18. 18.

    Patten, S, “Trust in financial planners still falling”, The Australian Financial Review, 27 May 2016.

  19. 19.

    In many ways the collapse of HIH may be seen as Australia’s Enron.

  20. 20.

    Financial Systems Inquiry, “Strengthening Australian Securities and Investments Commission’s funding and powers” available at: http://fsi.gov.au/publications/final-report/chapter-5/strengthening-asic/

  21. 21.

    McCauley, D et al., “Policing the bank ‘will cost more than $127 million’ consumer advocates warn”, news.com.au, 20 April 2016, available at: http://www.news.com.au/finance/business/banking/policing-the-banks-will-cost-more-than-127-million-consumer-advocates-warn/news-story/b2243dd1482fea205a5b253d9f4aafba

  22. 22.

    Treasury Committee, House of Commons, The Run on the Rock, Fifth Report of Session 2007–08, Volume I at p. 12. Available at: https://www.publications.parliament.uk/pa/cm200708/cmselect/cmtreasy/56/56i.pdf

  23. 23.

    See further, King, M, The End of Alchemy – Money, Banking and the Future of the Global Economy, London, Little Brown, 2016 at pp. 23–24. Also see generally, Augar, P, The Death of Gentlemanly Capitalism – The Rise and Fall of London’s Investment Banks, London, Penguin Books, 2000; and Poser, NS, International Securities Regulation – London’s “Big Bang” and the European Securities Markets, New York, Little, Brown & Co, 1990.

  24. 24.

    See generally, Australian Securities and Investments Commission, “Culture, conduct and conflicts of interest in vertically integrated businesses in the funds-management industry”, Report 474, March 2016; available at: http://asic.gov.au/regulatory-resources/find-a-document/reports/rep-474-culture-conduct-and-conflicts-of-interest-in-vertically-integrated-businesses-in-the-funds-management-industry/. In regard to Chinese Walls, see generally: Tomasic, R, “Chinese Walls, Legal Principle and Commercial Reality in Multi-Service Professional Firms”, (1991) 14 University of New South Wales Law Journal 46–72.

  25. 25.

    This change came about as a result of the passage of the Gramm-Leach-Bliley Act of 1999.

  26. 26.

    See generally, Tett, G, Fool’s Gold: How Unrestrained Greed Corrupted a Dream, Shattered Global Markets and Unleashed a Catastrophe, London, Little Brown, 2009 at pp. 117–122. Also see Securities and Exchange Commission, “Summary Report of Issues Identified in the Commission Staff’s Examinations of Select Credit Rating Agencies”, SEC, July 2008, www.sec.gov/news/studies/2008/craexamination070808.pdf

  27. 27.

    See for example, Rickards, J, “Repeal of Glass-Steagall Caused the Financial Crisis”, US News & World Report, 27 August 2012; available at: http://www.usnews.com/opinion/blogs/economic-intelligence/2012/08/27/repeal-of-glass-steagall-caused-the-financial-crisis. Others have argued that the reform of the Glass-Steagall Act was only one of many causes of the GFC; see for example, Zarroli, J, “Fact Check: Did Glass-Steagall Cause The 2008 Financial Crisis?”, National Public Radio, 14 October 2015; available at: http://www.npr.org/sections/thetwo-way/2015/10/14/448685233/fact-check-did-glass-steagall-cause-the-2008-financial-crisis

  28. 28.

    Stiglitz, JE, The Price of Inequality, London, Allen Lane, 2012, at p. 90. Also see comments by Stiglitz at p. 387.

  29. 29.

    Garnaut, R with Llewellyn-Smith, D, The Great Crash of 2008, Melbourne, Melbourne University Press, 2009, at p. 23. Garnaut (at pp. 45–46) echoed critical comments made by Stiglitz regarding the effect of the relaxation of the Glass-Steagall Act.

  30. 30.

    Ibid. at p. 39.

  31. 31.

    See generally, Fukuyama, F, Trust – The Social Virtue & the Creation of Prosperity, New Yok, Free Press, 1995; Kramer, RM (ed.), Organizational Trust, Oxford, Oxford University Press, 2006; and Mayer, C, Firm Commitment – Why the corporation is failing us and how to restore trust in it, Oxford, Oxford University Press, 2013.

  32. 32.

    See further, Tomasic, R and Akinbami, F, “The Role of Trust in Maintaining the Resilience of Financial Markets”, (2011) 11(2) Journal of Corporate Law Studies 369–394; and Tomasic, R, “The Failure of Corporate Governance and the Limits of Law: British Banks and the Global Financial Crisis”, (pp. 50–74) in Corporate Governance and the Global Financial Crisis: International Perspectives (ed. by W Sun et al.), Cambridge, Cambridge University Press, 2011.

  33. 33.

    ASIC v Chemeq Limited [2006] FCA 936 at para 86. See also French, RS, “The Culture of Compliance – A Judicial Perspective”, paper presented at the Australian Compliance Institute, Sydney, 3–5 September 2003.

  34. 34.

    “Leaders turn to culture as key management tool”, The Australian, 23 March 2016 at p. 23.

  35. 35.

    See for example, Colvin, JHC and J Argent, “Corporate and personal liability for ‘culture’ in corporations?”, (2016) 34 Company & Securities Law Journal 30–47.

  36. 36.

    See further, Mitchell, S, “Australia ‘paradise’ from white-collar criminals, says ASIC chairman Greg Medcraft”, The Sydney Morning Herald, 21 October 2014; available at: http://www.smh.com.au/business/australia-paradise-for-whitecollar-criminals-says-asic-chairman-greg-medcraft-20141021-119d99.html; and R Williams and G Wilkins, “Trouble in paradise: Greg Medcraft’s white-collar crime comments get people hot under the collar”, The Sydney Morning Herald, 25 October 2014, available at: http://www.smh.com.au/business/trouble-in-paradise-greg-medcrafts-white-collar-crime-comments-get-people-hot-under-the-collar-20141024-11bdva.html

  37. 37.

    Mitchell, S, “Australia ‘paradise’ for white-collar criminals, says ASIC chairman Greg Medcraft”, The Sydney Morning Herald, 21 October 2014; Williams, R and G Wilkins, “Trouble in paradise: Greg Medcraft’s white collar crime comments get people hot under the collar”, The Sydney Morning Herald, 25 October 2014.

  38. 38.

    Fisse, B and J Braithwaite, Corporations, Crime and Accountability, Cambridge, Cambridge University Press, 1993.

  39. 39.

    See for example, Medcraft, G, “Culture shock”, Speech delivered to the ASIC Annual Forum 2016 in Sydney, 21 March 2016 at p. 4.

  40. 40.

    Ibid. at p. 4.

  41. 41.

    Kell, P, “Why are we talking about culture?”, Opening remarks at AFR Banking & Wealth Summit 2016 (Sofitel Wentworth, Sydney) 5 April 2016; Available at: http://asic.gov.au/about-asic/media-centre/speeches/why-are-we-talking-about-culture/

  42. 42.

    Speech by Davidson, J, Director of Supervision, Financial Conduct Authority, “Getting culture and conduct right – the role of the regulator”, 13 July 2016, available at: https://www.fca.org.uk/news/speeches/getting-culture-and-conduct-right-role-regulator

  43. 43.

    Ibid. at p. 1.

  44. 44.

    Dixon, O, “Corporate Criminal Liability: The Influence of Corporate Culture”, (pp. 251–268) in Integrity, Risk and Accountability in Capital Markets – Regulating Culture (ed. by O’Brien J and Gilligan, G), Oxford, Hart Publishing, 2013 at p. 267.

  45. 45.

    Davidson, above at p. 3.

  46. 46.

    Ibid.

  47. 47.

    Ibid. at p. 4.

  48. 48.

    Bennet, M and R Gluyas, “Leading by example key to healthy corporate culture”, The Australian, 23 March 2016 at p. 23.

  49. 49.

    Medcraft, G, “Corporate Culture and corporate regulation”, Speech to Business Law Section of the Law Council of Australia, Melbourne, 20 November 2015 at p. 2. Available at: http://asic.gov.au/about-asic/media-centre/speeches/corporate-culture-and-corporate-regulation/

  50. 50.

    Medcraft, G, “Corporate Culture and corporate regulation”, above at 5.

  51. 51.

    Medcraft, G, “Why Culture Matters” Speech delivered at BNP Paribas Conduct Month, Sydney, 24 May 2016 at p. 2. Available at: http://asic.gov.au/about-asic/media-centre/speeches/why-culture-matters/

  52. 52.

    Ibid. at p. 3. Medcraft went on to echo these views in another speech, “ASIC’s focus on culture – digging into the detail”, delivered to the Corporate Governance Forum of the Governance Institute of Australia on 24 May 2016.

  53. 53.

    Haines, F, “Crime? What Crime? Tales of the Collapse of HIH”, (pp. 523–539) in International Handbook of White-Collar and Corporate Crime, (ed. by Pontell, HN and Geis, G), New York, Springer, 2007 at 524.

  54. 54.

    Ibid. at p. 533.

  55. 55.

    Ibid. at p. 4.

  56. 56.

    See generally, Senior Managers Regime, Financial Conduct Authority, London, 2016, available at: https://www.fca.org.uk/publication/corporate/applying-smr-to-fca.pdf

  57. 57.

    Davidson, “Getting culture and conduct right – the role of the regulator”, above at p. 5.

  58. 58.

    Ibid. at p. 4.

  59. 59.

    See generally, Black, J, “The Rise, fall and fate of principles-based regulation”, (Chap. 1) in Alexander, K and Moloney, N (eds), Law Reform and Financial Markets, Edward Elgar, 2011; and Tomasic, R, “Beyond ‘Light Touch’ Regulation of British Banks after the Financial Crisis”, (pp. 103–122) in MacNeil, I and O’Brien, J (eds.), The Future of Financial Regulation, Richard Hart, 2010.

  60. 60.

    See generally, Sorkin, AR, Too Big to Fail – Inside the Battle to Save Wall Street, London, Allen Lane, 2009.

  61. 61.

    Medcraft, G, “Corporate Culture and corporate regulation”, above at 5.

  62. 62.

    Medcraft, G, “Why Culture Matters” Speech delivered at BNP Paribas Conduct Month, Sydney, 24 May 2016 at p. 2. Available at: http://asic.gov.au/about-asic/media-centre/speeches/why-culture-matters/

  63. 63.

    See further, ASIC, Culture, Conduct and Conflicts of Interest in Vertically Integrated Businesses in the Funds-management Industry, ASIC Report no 474, 2016; White, A and L Shanahan, “ASIC report firm on fund manager failings”, The Australian, 23 March 2016 at p. 21.

  64. 64.

    Ferguson, A, “ASIC to launch rate-rigging case”, The Australian Financial Review, 8 February 2016 at p. 40; Shanahan, L, “Corporate cop accuses ANZ of rigging rates”, The Weekend Australian, 5–6 March 2016 at p. 256; Eyers, J, “Rate-rigging trials will test case management”, The Australian Financial Review, 10 June 2016 at p. 21; Thompson, S, J Whyte and A Macdonald, “NAB set to face claims of rate-rigging”, The Australian Financial Review, 3 June 2016 at p. 17; Shapiro, J, “Inside the big banks’ BBSW power struggles”, The Australian Financial Review, 27 May 2016.

  65. 65.

    Ibid. at p. 3. Medcraft went on to echo these views in a speech, “ASIC’s focus on culture – digging into the detail”, delivered to the Corporate Governance Forum of the Governance Institute of Australia on 24 May 2016.

  66. 66.

    Haines, F, “Crime? What Crime? Tales of the Collapse of HIH”, (pp. 523–539) in International Handbook of White-Collar and Corporate Crime, (ed. by Pontell, HN and Geis, G), New York, Springer, 2007 at 524.

  67. 67.

    Ibid. at p. 533.

  68. 68.

    Braithwaite, J, “White Collar Crime” (pp. 116–41) in Geis, G Meier, R and Salinger, I (eds.), White-Collar Crime: Classic and Contemporary Views, 3rd ed, The Free Press, London, 1995 at p. 129.

  69. 69.

    Ibid.

  70. 70.

    Sutherland, EH, White Collar Crime – The Uncut Version, New Haven Yale University Press, 1983 at pp. 45–62.

  71. 71.

    Stone, CD, Where the Law Ends – The Social Control of Corporate Behavior, New York, Harper & Row, 1975.

  72. 72.

    Tomasic, R, “Corporations as private governments in the shadow of the State: The boundaries of autonomy”, (2014) 29(3) Australian Journal of Corporate Law, pp. 275–294.

  73. 73.

    Fisse, B and J Braithwaite, Corporations, Crime and Accountability, Cambridge, Cambridge University Press, 1993 at p. 170.

  74. 74.

    Ibid. at pp. 170–171.

  75. 75.

    Ibid. at p. 196.

  76. 76.

    See generally: Cohan, WD, “How Wall Street’s Bankers Stayed Out of Jail”, The Atlantic, September 2015. Available at: http://www.theatlantic.com/magazine/archive/2015/09/how-wall-streets-bankers-stayed-out-of-jail/399368/

  77. 77.

    Ibid. at p. 2.

  78. 78.

    MacNeil, I, “Enforcement and Sanctioning”, (pp. 280–306) in Moloney, N, Ferran, E and Payne, J (eds), The Oxford Handbook of Financial Regulation, Oxford, Oxford University Press, 2015 at p. 290.

  79. 79.

    Ibid. at p. 3.

  80. 80.

    See for example, Apel, R and Paternoster, R, “Understanding ‘Criminogenic’ Corporate Culture: What White Collar Crime Researchers can learn from Studies of the Adolescent Employment-Crime Relationship”, (pp. 15–33) in The Criminology of White Collar Crime, (ed. by SS Simpson and D Weisburd), New York, Springer, 2009.

  81. 81.

    See further, Gobert, J and Punch, M, Rethinking Corporate Crime, London, Butterworths LexisNexis, 2003.

  82. 82.

    Fisse, B and J Braithwaite, Corporations, Crime and Accountability, Cambridge, Cambridge University Press, 1993 at pp. 140–145.

  83. 83.

    Snider, L, “The sociology of corporate crime: An obituary”, (1994) 49(2) Theoretical Criminology 169–206 at p. 172.

  84. 84.

    Adams, JR, The Big Fix: Inside the S. and L. Scandal – How an Unholy Alliance of Politics and Money Destroyed America’s Banking System, John Wiley n& Sons, 1989; also see Day, K, S&L Hell: The People and the Politics behind the $1 Trillion Savings and Loan Scandal, WW Norton & Co, 1994.

  85. 85.

    See further Calavita, K, Pontell, HN and Tillman, R, Big Money Crime – Fraud and Politics in the Savings and Loan Crisis, Berkeley, University of California Press, 1999.

  86. 86.

    The New York Times, “Two Financial Crises Compared: The Savings and Loan Debacle and the Mortgage Mess”, The New York Times, 13 April 2011, available at: http://www.nytimes.com/interactive/2011/04/14/business/20110414-prosecute.html?_r=0

  87. 87.

    Hays, K and Driver, A, “Former Enron CEO Skilling’s sentence cut to 14 years”, Reuters, 21 June 2013; available at: http://www.reuters.com/article/us-enron-skilling-idUSBRE95K12520130621

  88. 88.

    See further, Steffy, L, “An End to the Enron Saga (Updated)”, Forbes, 21 June 2013; available at: http://www.forbes.com/sites/lorensteffy/2013/06/21/an-end-to-the-enron-saga/#47d456203ea5

  89. 89.

    Ibid. at p. 3.

  90. 90.

    See generally, Haines, F, “Crime? What Crime? Tales of the Collapse of HIH”, (pp. 523–539) in Pontell, HN and Geis, G (eds.), International Handbook of White-Collar and Corporate Crime, New York, Springer, 2007.

  91. 91.

    See further the more detailed discussion by Morgenson, G and Story, L, “In Financial Crisis, No Prosecutions of Top Figures”, The New York Times, 14 April 2011; available at: http://www.nytimes.com/2011/04/14/business/14prosecute.html

  92. 92.

    Steffy, Forbes, above at p. 5.

  93. 93.

    Carvajal, A and Elliot, J, “The Challenge of Enforcement in Securities Markets: Mission Impossible”, (2009), IMF Working Paper 09/168; available at: https://www.imf.org/external/pubs/ft/wp/2009/wp09168.pdf

  94. 94.

    Ibid.

  95. 95.

    See further: Arvedlund, E, Too Good to be True: The Rise and Fall of Bernie Madoff, New York, Portfolio, 2009; Henriques, DB, The Wizard of Lies – Bernie Madoff and the Death of Trust, New York, Times Books, 2011; Le Bor, A, How American fell for Bernard Madoff’s $65 billion investment scam, London, Weidenfeld & Nicholson, 2009; and Markopolos, H, No One would Listen: A True Financial Thriller, Hoboken, John Wiley & Sons, 2010.

  96. 96.

    Quoted by Morgenson, and Story, “In Financial Crisis, No Prosecutions of Top Figures” above. The research upon which Pontell’s statement is based can be found in articles such as: Calavita, K and Pontell, H “‘Heads I Win, Tails You Lose’: Deregulation, Crime, and Crisis in the Savings and Loan Industry,” (1990) 36(3) Crime and Delinquency, and Calavita, K and Pontell, H, “‘Other People’s Money’ Revisited: Collective Embezzlement in the Savings and Loan and Insurance Industries”, (1991) 38(1) Social Problems 94–112.

  97. 97.

    See generally, Charles Ferguson’s film, Inside Job. See further YouTube, “Its a Wall Street Government” available at: https://www.youtube.com/watch?v=eKHKfcT9pCI. Also see generally, Morris, CR, The Trillion Dollar Meltdown, New York, Public Affairs, 2008 at p. 155.

  98. 98.

    Cearns, K and Ferran, E, “Non-enforcement-led Public Oversight of Financial and Corporate Governance Disclosure and of Auditors”, (2008) Journal of Corporate Law Studies 191; Also see generally, McBarnet, D and Whelan, C, Creative Accounting and the Cross-Eyed Javelin Thrower, John Wiley & Sons, 2001.

  99. 99.

    MacNeil, I, “Enforcement and Sanctioning”, (pp. 280–306) in Moloney, N, Ferran, E and Payne, J (eds), The Oxford Handbook of Financial Regulation, Oxford, Oxford University Press, 2015 at pp. 303–304.

  100. 100.

    Ibid. at pp. 296–297.

  101. 101.

    See further the UK’s Financial Services (Banking Reform) Act 2013, section 36.

  102. 102.

    Walker, Sir David, A review of corporate governance in UK banks and other financial industry entities – Final recommendations, HM Treasury, London, 26 November 2009 at para 2.23 and para 5.38; available at: http://webarchive.nationalarchives.gov.uk; //http://www.hm-treasury.gov.uk/d/walker_review_261109.pdf

  103. 103.

    See for example, Cheffins, BR, “The Stewardship Code’s Achilles Heel”, (2010) 73(6) The Modern Law Review 1004–1025; Reisberg, A, “The UK Stewardship Code: On the Road to Nowhere?”; (2015) 15(2) Journal of Corporate Law Studies, 217–253; and Chiu, IHY, “Stewardship as a Force for Governance: Critically Assessing the Aspirations and Weaknesses of the UK Stewardship Code”, (2012) 9(1) European Company Law, 5–11.

  104. 104.

    Parliamentary Banking Standards Commission, “Banking Commission publishes report on changing banking for good”, 19 June 2013; see at http://www.parliament.uk/business/committees/committees-a-z/joint-select/professional-standards-in-the-banking-industry/news/changing-banking-for-good-report/

  105. 105.

    Parliamentary Banking Standards Commission, Changing Banking for Good, First Report, Volume 1, London: The Stationery Office Limited, 2013 at p. 8; available at: http://www.parliament.uk/documents/banking-commission/Banking-final-report-volume-i.pdf

  106. 106.

    Ibid. at p. 10.

  107. 107.

    Ibid.

  108. 108.

    Shanahan, L, “Call for tough US-style penalties”, The Australian, 17 March 2016 at p. 21. See further O’Brien, J, “The Sword of Damocles: Deferred Prosecutions and the Search for Accountability”, (pp. 161–178) in Integrity, Risk and Accountability in Capital Markets – Regulating Culture (ed. by O’Brien J and Gilligan, G), Oxford, Hart Publishing, 2013.

  109. 109.

    MacNeil, above at pp. 303–304.

  110. 110.

    US Department of Justice, “Goldman Sachs Agrees to Pay More than $5 Billion in Connection with Its Sale of Residential Mortgage Backed Securities”, Justice News, 11 April 2016; available at: https://www.justice.gov/opa/pr/goldman-sachs-agrees-pay-more-5-billion-connection-its-sale-residential-mortgage-backed SALE OF RESIDENTIAL MORTGAGE BACKED SECURITIES.

  111. 111.

    See discussion in Reynolds, I, “Where to now for negotiated settlements?”, Clayton Utz, 16 April 2013; available at: https://www.claytonutz.com/knowledge/2013/april/where-to-now-for-negotiated-settlements

  112. 112.

    See for example the decision of ASIC v Ingleby [2013] VSCA 49.

  113. 113.

    Parliamentary Banking Standards Commission, Changing Banking for Good, above at p. 15.

  114. 114.

    Westbrook, DA, “The Culture of Financial Institutions: The Institution of Political Economy”, (pp. 3–20) in Integrity, Risk and Accountability in Capital Markets – Regulating Culture (ed. by O’Brien J and Gilligan, G), Oxford, Hart Publishing, 2013 at p. 6.

  115. 115.

    Campbell, D and Loughrey, J, “The Regulation of Self-interest in Financial Markets” (pp. 65–90) in Integrity, Risk and Accountability in Capital Markets – Regulating Culture (ed. by O’Brien J and Gilligan, G), Oxford, Hart Publishing, 2013 at p. 66.

  116. 116.

    See further, Awrey, D, Blair, W and Kershaw, D, “Between Law and Markets: Is There a Role for Culture in Financial Regulation?”, (2013) 38(1) Delaware Journal of Corporate Law 191–246.

  117. 117.

    Westbrook, above at p. 7.

  118. 118.

    Ibid. at p. 9

  119. 119.

    Campbell and Loughrey, above at 89.

  120. 120.

    Ibid.

  121. 121.

    Allens Arthur Robinson, “‘Corporate Culture’ as a Basis for the Criminal Liability of Corporations”, Prepared by Allens Arthur Robinson for the United Nations Special Representative of the of the Secretary General on Human Rights and Business John Ruggie, February 2008 at p. 11; see further at: http://www.allens.com.au/med/pressreleases/pr30may08.htm

  122. 122.

    Ibid. at pp. 10–11.

  123. 123.

    Ibid. at p. 12.

  124. 124.

    This included: Fisse, B, “Criminal Law: The Attribution of Criminal Liability to Corporations: A Statutory Model” (1991) 13 Sydney Law Review 277. There was however some criticism at the time of the seeming vagueness of the corporate culture concept by Chief Justice Gleeson of New South Wales; in response the Attorney-General’s Department noted that the concept had been successfully used in sentencing in the USA.

  125. 125.

    See further, Belcher, A, “Imagining How a Company Thinks: What is Corporate Culture?”, (2006) 11 Deakin Law Review 1.

  126. 126.

    Colvin, JHC and J Argent, “Corporate and personal liability for ‘culture’ in corporations?”, (2016) 34 Company & Securities Law Journal 30 at 31.

  127. 127.

    Dixon, O, “Corporate Criminal Liability: The Influence of Corporate Culture”, (pp. 251–268) in Integrity, Risk and Accountability in Capital Markets – Regulating Culture (ed. by O’Brien J and Gilligan, G), Oxford, Hart Publishing, 2013 at p. 252.

  128. 128.

    Clough, J and Mulhern, C, The Prosecution of Corporations, Melbourne, Oxford University Press, 2002 at 138.

  129. 129.

    Dixon, above at 252. See also pp. 263–267 for a discussion of prosecution problems in the use of corporate culture.

  130. 130.

    Ibid. at p. 252.

  131. 131.

    See generally, Camerer, C and A Vepsalainen, “The Economic Efficiency of Corporate Culture”, (1988) 9 Strategic Management Journal 115–126; Morgan, MJ, “How Corporate Culture Drives Strategy”, (1993) 26(2) Long Range Planning 110–118; Schein, EH, and P Schein, Organizational Culture and Leadership, 5th ed, John Wiley & Sons, 2017; and Sunder, S, “Management Control, Expectations, Common Knowledge, and Culture”, (2002) Journal of Management Accounting Research 173–187.

  132. 132.

    See for example, Awrey, D, W Blair and D Kershaw, “Between Law and Markets: Is there a Role for Culture and Ethics in Financial Regulation?”, (2013) 38 Delaware Journal of Corporate Law 191–245; and O’Brien J and G Gilligan (eds), Integrity, Risk and Accountability in Capital Markets – Regulating Culture, Oxford, Hart Publishing, 2013.

  133. 133.

    Fisse, B and J Braithwaite, Corporations, Crime and Accountability, Cambridge, Cambridge University Press, 1993 at p. 22.

  134. 134.

    Ibid. at p. 137.

  135. 135.

    Ibid. at pp. 123–132.

  136. 136.

    Ibid. at p. 143.

  137. 137.

    Colvin, JHC and J Argent, “Corporate and personal liability for ‘culture’ in corporations?”, (2016) 34 Company & Securities Law Journal 30 at 40.

  138. 138.

    Ibid. at p. 45.

  139. 139.

    Creighton, A, “Dump complex rules urges ex-Bank of England boss Mervyn King”, The Australian, 21 March 2016.

  140. 140.

    See discussion by Westbrook above at p. 15.

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  1. School of Law, University of South Australia, Adelaide, SA, Australia

    Roman Tomasic

  2. Durham Law School, Durham University, Durham, UK

    Roman Tomasic

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  1. Bristol Law School, University of the West England, Bristol, UK

    Nic Ryder

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Tomasic, R. (2018). Corporate Crime and Corporate Culture in Financial Institutions: An Australian Perspective. In: Ryder, N. (eds) White Collar Crime and Risk. Palgrave Studies in Risk, Crime and Society. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-137-47384-4_11

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