Securities fraud and regulatory compliance: why alternative means of control are necessary?

Abstract

This article is based on an accumulation of much information and analysis of security frauds and regulatory compliance since the Wall Street Financial Implosion of 2008. Its objective is not about controlling high-risk securities frauds through improved identification and enhanced enforcement of existing (or new) administrative, civil, and/or criminal laws. On the contrary, it is about demonstrating the futility of these strategies and revealing the structural necessities for developing other means of social control. The article proceeds by locating financial global capital within the world economy so as to relate discussions of crime control within the framework of capitalist development. To advance my argument, I begin by describing the contradictory forces of free-market capitalism as well as the failures of securities law to deter Wall Street like financial frauds. I then turn to an appraisal of the inefficacies and noncontrols of state-legal interventions into high-stakes financial frauds. Finally, consistent with the building of a globally sustainable ecosystem, I present an array of policy prescriptions that could make a difference in the struggle against securities frauds.