Deviant Legitimacy — A Theory of Financial Crime
| DOI | https://doi.org/10.1108/eb025749 |
| Published date | 01 March 1996 |
| Pages | 7-16 |
| Date | 01 March 1996 |
| Author | Rowan Bosworth‐Davies |
| Subject Matter | Accounting & finance |
Journal of Financial Crime — Vol. 4 No. 1 — Analysis
ANALYSIS
Deviant Legitimacy — A Theory of Financial Crime
Rowan Bosworth-Davies
INTRODUCTION
In this article, the author begins by restating the
theory of criminogenesis which he first examined
in an earlier article that dealt with the activities of
the futures and derivatives markets. He then
extends the theory of criminal potential by exam-
ining the conduct of those who work within the
Life Assurance and Pensions industry, with par-
ticular emphasis on the marketing of personal pen-
sions,
and attempts to show that such activity can
properly be defined as 'organised crime'.
THE MEANING OF CRIMINOGENESIS
'It was a filthy profession, but the money was
addicting, and one addiction led to another, and
they were all going to hell.'1
In August 1994, the author published an article
examining the theory of criminogenesis,2 by which
was meant the propensity for defined groups of
individuals to behave in a way that, while not nec-
essarily being immediately criminal in
itself,
possessed all the requisite characteristics to become
criminal, by legal definition, if the prevailing cir-
cumstances in which such behaviour was practised
changed. For those who will not have read the
earlier paper, the main thrust of the argument is
paraphrased below. When talking about the pre-
vailing cultural environment in which the futures
market traders and practitioners operated, it was
asserted:
'Psychologically, many of these men and women
can be defined as being "regulatorily resistant".
Theirs is a primarily deviant, norm-evasive, crimi-
nogenic culture, not much given to the willing
acceptance of regulatory control. Such an
uncomprising statement should not be immedia-
tely interpreted to mean that these practitioners are
committing wholesale overt criminal acts. It simply
means that their risk-taking culture, itself the
antithesis of the traditional perception of the risk-
reduction function of these markets; coupled with
the highly competitive environment within which
they work, whose new traditions give all the
impression of flouting traditional, "old market"
norms; predispose them to break the rules more
readily than practitioners in other commercial sec-
tors.
These are the traders to whom the com-
pliance officer is generally seen as "the business
prevention officer" and the traders tend to view
each new regulatory notice as an irritating incon-
venience standing in the way of increasingly inno-
vative trading. Each new regulatory requirement is
looked upon as a challenge to the ingenuity of the
traders, and competitions are held by dealers to see
who can get round the controls undiscovered, and
in the most profitable manner. In his article,
"Mavericks at the Casino: Legal and Ethical Inde-
terminancy in the Financial Markets",3 Chris-
topher Stanley identifies the development of this
new phenomenon within the previously ordered
environment of the City of London.
'"The New City reflected the ideological aspira-
tions of
a
system of political administrations which
disrupted the post-war consensus of relations
between polity and economy. It also reflected the
Casino or Disorganisation of Capitalism: 'an inter-
national financial system in which gamblers in the
casino have got out of hand.' The New City was
international, technological and subscribed to the
Enterprise Culture ethos which placed individual
success and self-reliance as the primary indicators
of excellence. The structural changes which the
Government introduced, in terms of trading prac-
tice and regulation, operated with the new finan-
cial products and markets to ensure that the
particular elite of the Old City, which was per-
ceived as a dangerously destabilising hegemonic
Page 7
To continue reading
Request your trial