Using financial incentives and income contingent penalties to detect and punish collusion and insider trading

Bruce Chapman*, Richard Denniss

*Corresponding author for this work

    Research output: Contribution to journalReview articlepeer-review

    9 Citations (Scopus)

    Abstract

    Collusion and insider trading, being white collar crimes, are often characterised as being victimless crimes. The absence of identifiable victims makes the detection of these crimes particularly difficult. This paper proposes that, in order to increase the flow of information about collusion and insider trading, parties engaged in these crimes should be offered financial incentives to provide evidence against their co-conspirators. In order to provide greater certainty that rewards will be paid, and also to increase the probability that any fines are paid, it is also proposed that an income-contingent fine collection mechanism be utilised. The paper presents two case studies to illustrate how the fine collection mechanism could be used.

    Original languageEnglish
    Pages (from-to)122-140
    Number of pages19
    JournalAustralian and New Zealand Journal of Criminology
    Volume38
    Issue number1
    DOIs
    Publication statusPublished - Apr 2005

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