White-collar and corporate crime are categories of crime where financial gain is sought against the law under the guise of business.

Although corporate crimes are non-violent in nature, they have severe consequences and are a lot more common than you might think. 

For instance, a 2022 PwC survey found that over 46% of surveyed organisations reported economic crimes, fraud, or corruption within their business in the last two years.

In this guide, we’ve discussed the categories of white-collar crime and corporate crime in Australia, as well as the regulatory bodies responsible for investigating them. 

What Is White Collar Crime?

According to the experts at LY Lawyers, white-collar crime is a non-violent crime committed by a person of high social status in a responsible position to gain a financial advantage. 

Examples of white-collar crime include mortgage fraud, securities fraud, tax evasion, and more. White-collar criminals are generally strongly financially motivated, well-educated, and highly positioned in the corporate world. 

White Collar Crime vs. Corporate Crime

Corporate crime generally falls within the domain of white-collar crime. The key difference is that while white-collar offences (such as embezzlement) are committed by influential individuals against companies, corporate crime refers to violations committed by companies against members of the public, investors, the environment, or corporate competitors. 

Corporate crime involves individuals within an organisation misusing their authority and power to engage in criminal activity for financial or competitive advantage for the company as a whole. 

This includes commodities fraud, falsifying information, insider trading, conspiracy to launder money, manipulating financial marketing, account schemes, and more. 

While there is substantial overlap between white-collar crime and corporate crime, corporate crime might also refer to:

• False advertising
• Non-payment of worker entitlements
• Causing environmental harm
• Cartel conduct

Charges for corporate crimes are brought against the company/organisation, while white-collar charges are directed at the particular individual(s) thought responsible. In many cases, corporate offences can result from deliberate criminal activity, but they can also arise from negligence, inattention to detail, or recklessness within an organisation. 

How Is The Defendant Company Tried In Criminal Proceedings?

There are many differences in criminal proceedings involving individuals versus those against a corporate body. 

As a company is an artificial entity, it cannot be required to give evidence as an individual witness except through the company officers/representatives. There is no need to convict an individual member in order to prosecute a corporation — criminal action against a company is generally conducted as a separate proceeding. 

A corporation also does not have the benefit of privilege against self-incrimination. Australian law provides individuals with immunity against submitting any documents or information that can be self-incriminating, but a corporation does not have this privilege. 

This means any company charged with a corporate crime is bound to comply with requirements to produce any documents or information, even if the information will incriminate the corporation. 

What Is Cartel Conduct?

Cartel conduct falls under the category of corporate crime. A “cartel” occurs when businesses privately agree to act together instead of competing with each other to increase profits for cartel members. 

The Competition and Consumer Act 2010 prohibits cartels. Under this Act, businesses and individuals participating in cartels can be charged with both civil and criminal offences.

Cartel conduct may include:

• Output restrictions: Controlling the number of goods and services available to buyers.
• Price fixing: Competitors agreeing on the market price of a particular product.
• Sharing markets: Competitors agreeing to divide or allocate customers and markets among themselves 
• Rigging bids: Suppliers agree on who will win and at what price.

Australian Law Enforcement And Regulatory Bodies

The investigation of white-collar and corporate crime offences is typically carried out by The State Police or the Australian Federal Police. Other specialised agencies can be involved, including: 

• Australian Tax Office (ATO)
• Australian Transaction Reports and Analysis Centre (AUSTRAC)
• Independent Commission Against Corruption (ICAC)
• Commonwealth DPP (CDPP)
• Australian Competition and Consumer Commission (ACCC)
• Australian Securities and Investments Commission (ASIC)

The Role Of ASIC

The Australian Securities and Investments Commission (ASIC) is an important body responsible for regulating many aspects of Australia’s corporate, market, and financial sectors. 

The Australian Securities and Investments Commission Act 2001 (Cth) gives ASIC the authority to investigate allegations of white-collar crime. It can exercise its powers to prevent and deter unlawful conduct and also recover financial losses in some instances. 

The ASIC is responsible for investigating contraventions of the Corporations Act 2001. The common types of offending behaviour the ASIC investigates and prosecutes include: 

• Offences against the stock market, such as insider trading and market manipulation
• Falsification of company records
• Company directors committing fraud upon the company
• Carrying on financial services without a licence

The ASIC is given extensive investigative powers, much broader than the Australian police. ASIC’s powers include the ability to conduct compulsory hearings where those being questioned cannot legally refuse to answer any questions. The ASIC can also issue notices requiring persons to provide information and documents relevant to their investigations. 

Failing to comply with a direction to answer ASIC’s questions or produce relevant documents is considered a serious offence, which can be punished with jail time or hefty fines. 
However, there are certain defences available against these charges. Any corporation that has received a notice from the ASIC or is subjected to a corporate criminal investigation of any sort must immediately contact a lawyer. Corporate crimes are often highly complex and multi-faceted, and it is imperative that you seek legal advice from an expert corporate lawyer.