BA 200 1st Edition Exam 2 Study Guide This exam covers Chapter 8 Business Crime Chapter 9 Business Torts Chapter 19 Employee Discrimination There will be 70 multiple choice true false questions Chapter 8 Business Crime What is Business Crime o Corporate Crime Also Called White Collar Crime Occurs Because of Economic Pressure on Managers and Employees for Results o The state vs person o Intra Business Crime 90 Stealing from employers High cost of insurance and security Includes thefts and kickbacks o Inter Business Crime Stealing from competitors Acting illegally to gain a competitive advantage Electronic eavesdropping Federal violations securities campaign laws antitrust Liability for Crimes o Officers and Directors are Liable o If they authorized the conduct or o If they knew about the conduct and did nothing Federal Laws o Boesky and Milken the Insider Trading and Securities Fraud Enforcement Act of 1988 ITSFEA o Savings and Loan Crisis The white collar kingpin law o Enron et al Sarbanes Oxley o Subprime crisis the Financial Services Reform Act also known as the Dodd Frank Wall Street Reform and Consumer Protection Act o White Collar Kingpin Act Federal Law imposes minimum federal mandatory sentences on corporate officers o Sarbanes Oxley Act 2002 Criminal penalties increased Personal accountability enhanced Falsify financial records o Honest services fraud Action by an officer that deprives the shareholders of that officer s honest services Penalties o Reforming Criminal Penalties o Concerned that they are directed at natural persons and not corporate persons o Alternatives Placing penalties as a percentage of company profits Monitors Prison sentences for officers and directors Use traditional criminal statutes Indictment for common law criminal offenses Shame Punishment Business Crime Elements o Criminal Intent Scienter or Mens Rea State of mind required to commit a crime No intent no wrong doing For corporations prove intention on behalf of directors To prosecute must show individual intent Can establish by showing their knowledge of actions and failure to object o Examples of Crime Theft Intent to take property Actual taking of property for permanent use No authorization to take the property Embezzlement Intent to take property Actual taking of property for use temporary use is still crime By person entrusted with property Walmart employee stealing out of register Criminal Fraud Obtaining money goods services or property through false on misleading statements Requires intent to defraud Racketeering RICO o Pattern of racketeering activity o Must have at least 2 consecutive violations o Offenses that qualify as predicate offenses include pornography murder kidnapping bribery extortion fraud etc USA Patriot Act o Business Crimes and the USA Patriot Act o 10 000 in cash limit o Prior to 2001 Money Laundering Control Act o Post 2001 USA Patriot Act amended Money Laundering Control Act and Bank Secrecy Act o Cannot contract with terrorist groups or funnel cash to them for services Chiquita Consider paying money to someone on the terrorist list Procedural Rights o Fourth Amendment Rights Privacy amendment Search warrant procedures Must be based on probable cause Must be issued by a disinterested magistrate If searches are done improperly evidence is inadmissible at trial Exceptions to warrant requirement Records are being destroyed Plain view exception o Fifth Amendment Rights Protection against self incrimination Given to natural persons not to corporations Corporate officers can assert it to protect themselves but not corporate records Miranda warnings Given when individual is in custody Custody means inability to leave not necessarily jail Right to attorney right to silence notice of evidentiary use of statements o Due Process Protections of Fifth Amendment o Preliminary hearing or grand jury Hearing information issued defendant is present and can cross examine witnesses Grand jury indictment secret proceedings o Arraignment Plea is entered Trial date is set Chapter 9 Business Torts Tort a Civil Wrong That is an Interference With Someone s Person or Property Such That Injury Results o Latin Word Tortus Means Crooked Dubious Twisted Torts vs Crime o Tort is a Private Wrong Injured party seeks remedy Recovers damages from the one who commits the tort o Crime is a Public Wrong Wrongdoer is prosecuted Pays fine to government or is jailed to pay debt to society Type of Torts o Intentional Torts More than an accidental wrong o Tort of Negligence Accidental harms that result from the failure to think through the consequences Still have liability but there are defenses o Strict Tort Liability Absolute standard of liability Used in product liability cases Defamation o Untrue Statement By One Party That is Published To a Third Party o Slander is Oral or Spoken Defamation o Libel is Written and in Some States Broadcast Defamation Elements Statement about a business or person s reputation or honesty that is untrue Statement is directed at business and made with malice and intent to injure Publication someone heard and understood the statement Damages economic losses such as damage to reputation Defenses Truth is a complete defense Privileged speech three types o Absolute privilegeTestimony under oath and legislative debate so long as related to the matter at hand o Opinion Privilege Analysis and op ed articles choice of words and thoughts on conduct or actions calling someone a deadbeat who has in fact not paid his bills are not defamation and enjoy First Amendment protection o Qualified Privilege Media so long as item published without malice which is knowing information is false or with reckless disregard for whether it is true or false Contract Interference o Elements o Third party knew of existing contract between two primary parties o Third party intended to interfere with or cause a breach contract o Original party to the contract is injured by breach of contract induced by the third party Anna Nicole Smith case Creative theory of tortious interference with inheritance She did not prevail in the case False Imprisonment o Custody of Someone Else for any Period of Time Against Their Will o Need Not Establish Physical Damages Just the Fact That They are Detained Establishes Sufficient Damages o Defense of Shopkeeper s Privilege Can detain for reasonable time Must have basis for detaining the individual Invasion of Privacy o Public Disclosure of Private Facts o Appropriation of Another