How can the use of competition law in the enforcement of financial crime aid regulators in the United Kingdom and United States of America?

Johnson, Diana

Abstract

This paper examines the different regulatory approaches used in the United States of America (US) and the United Kingdom (UK) towards the enforcement of corporate financial crime. In particular, the paper considers how a ‘hybrid’ approach consisting of competition law and/or financial regulation could achieve better outcomes for regulators when tackling financial crime. Law enforcement and regulatory agencies in the US have used anti-trust, or competition, laws to penalise corporations for financial crimes including the actions of banking cartels as seen in the LIBOR and FX benchmark rate fixing scandals. However, in the UK for these market manipulation offences, corporations were sanctioned using civil financial regulations and individual traders were prosecuted, rather than a law specifically designed for participation in the cartels set up by traders to manipulate the benchmark rates. The outcomes of these different approaches will be critically analysed in order to outline proposals for future regulatory approaches towards corporate financial crime. The paper considers the merits of regulators using criminal enforcement powers against companies involved in financial crime, such as the criminal liability imposed for the breach of competition law in the US for the FX benchmark manipulation. One advantage of regulators being able to impose corporate criminal liability for financial crime is that an additional enforcement tool, the Deferred Prosecution Agreement (DPA). The paper examines the merits of the use of DPAs instead of the imposition of criminal penalties on a company. The level of deterrence offered by DPAs when compared to a criminal conviction will be considered, as will the significance of the imposition of civil vs criminal penalties on a company for financial crime.

• Presentation Conference Type: Presentation / Talk
• Conference Name: Institute of Advance Legal Studies
• Start Date: Oct 7, 2021
• Deposit Date: Sep 20, 2023
• Public URL: https://uwe-repository.worktribe.com/output/11129268