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The frequency of corporate misconduct: public enforcement versus private reality

Author

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  • Eugene Soltes

Abstract

Purpose - Perceptions about the frequency of misconduct – among the public, academics and even regulators – have largely been formed by examining enforcement statistics, which rely on the detection and sanctioning of the misconduct. This study aims to illuminate the real occurrence of corporate misconduct, much of which escapes public detection. Design/methodology/approach - By examining confidential firm records describing misconduct within organizations, the author shows that public enforcement statistics significantly underestimate the amount of serious malfeasance that arises within firms. Findings - Through analyzing records for several large multinational firms, the author finds that there are, on average, more than two instances of internally substantiated misconduct per week per firm. Originality/value - Ultimately, this analysis illustrates the challenge of addressing corporate malfeasance within large organizations.

Suggested Citation

  • Eugene Soltes, 2019. "The frequency of corporate misconduct: public enforcement versus private reality," Journal of Financial Crime, Emerald Group Publishing Limited, vol. 26(4), pages 923-937, October.
    • Handle: RePEc:eme:jfcpps:jfc-10-2018-0107
    DOI: 10.1108/JFC-10-2018-0107
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    Citations

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    Cited by:

    1. Marco Meyer & Chun Wei Choo, 2024. "Harming by Deceit: Epistemic Malevolence and Organizational Wrongdoing," Journal of Business Ethics, Springer, vol. 189(3), pages 439-452, January.
    2. Dennis W. Campbell & Ruidi Shang, 2022. "Tone at the Bottom: Measuring Corporate Misconduct Risk from the Text of Employee Reviews," Management Science, INFORMS, vol. 68(9), pages 7034-7053, September.

    More about this item

    Keywords

    Fraud; Bribery;

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