White Collar Crime Penalty Enhancement

Abstract

The last few years have seen some major scams and corporate collapses across the globe. A key aspect that is being debated in the corridors of India is whether we need major regular changes to improve corporate governance, or whether improved standards of corporate governance could be achieved through adoption of principle based standards of conduct. Perhaps the most vital corporate governance legislation in recent years is the Sarbanes-Oxley Act, 2002 of US which is becoming a global benchmark for internal best practices in corporate governance. The inclusion of White Collar Crime Penalty Enhancement Act, 2002 in the corporate reform package creates new substantive offenses, significantly enhances financial and incarceration penalties, and relaxes some procedural evidentiary requirements for prosecutors. White Collar Crime is not only a crime but a very serious crime with wide and often gory repercussions. Its seriousness can be gauged from the fact that effect of even a few White Collar Crimes on the economic fabric of society can be far more devastating. This paper outlines that it is high time for the Indian corporate sector to draw lessons from the experience of the functioning of the Act in US in order to cope up with the ongoing global reforms in corporate sector, regulatory framework and governance practices.