She applied the “Page 99 Test” to her new book, Myths and Misunderstandings in White-Collar Crime, and reported the following:
White-collar crime is a frustrating problem. It’s frustrating because it always seems to be with us. Pick up a newspaper or magazine and you will inevitably read a story about the corrupt politician, the CEO who lied to the public, even the manager or small-business owner who destroyed documents to avoid a fine or short-circuit expensive regulatory requirement. Everyone cheats, and too many people seem to get away with it.Learn more about Myths and Misunderstandings in White-Collar Crime at the Cambridge University Press website.
That is, for most people, the standard narrative of white-collar crime and its enforcement. The government is perhaps tough on rank-and-file employees and ordinary citizens and allows the famous and the powerful to escape liability. This narrative is compelling – but it does not tell the whole story.
The aim of my book is to illuminate a series of myths and misunderstandings that hamper our understanding of white-collar crime and its enforcement. A series of pathologies – in lawmaking, enforcement and discourse – oversimplify the problem and undermine our ability to redress white-collar crime. The book is divided into chapters that focus on the ways we generate and craft criminal statutes, the ways we enforce (or fail to enforce) those statutes, and the ways we talk about our statutes and (more often) our failed efforts at enforcement.
Page 99 of my book falls in the middle of one of the lawmaking chapters. Criminal law is often said to be a “statutory” subject, meaning that it is the product of democratically elected legislatures who codify prohibitions in lengthy criminal codes. The federal criminal code is no exception, except that it is poorly put together, bundles numerous conceptually distinct crimes into single, umbrella-like statutes, and uses opaque terms that no ordinary person could easily understand. It therefore falls to other institutions – the judiciary, prosecutors, regulatory agencies – to “make” criminal law by interpreting statutory language and creating shadow rules alongside the written law. The aim of Chapter 4 (which includes page 99) is to demonstrate that “outsourcing” itself has many flavors. Some types of outsourcing – such as corporate criminal liability –are truly unilateral in that one institution (in this case, the Department of Justice) creates a quasi-legal system and no other institution (not even the courts) has the ability to impose any checks or balances. Other types of outsourcing – such as the judiciary and SEC’s joint creation of insider trading liability – reflects a sequential back-and-forth involving multiple agencies and many checks and balances. Thus, the aim of page 99 is to show readers that “outsourcing” as a label reflects different types of lawmaking. As I say in the middle of the page:The insider trading and corporate crime examples teach us something about legislative outsourcing. Both doctrines rely heavily on the common law’s lawmaking modality, on administrative agencies (assuming one treats the DOJ as a quasi-administrator in the corporate crime context), and both concepts can be traced to profoundly underwritten rules.Then I go on to say, “From a functional perspective, this is where the commonalities end.” My point is that insider trading’s trajectory looks a lot different -and frankly, a lot less threatening where rule of law values are concerned – than corporate criminal liability. And on the next page, I go on to argue that many of the common criticisms lobbed at outsourcing (it renders lawmaking “too easy” and creates an “imperial” unchecked prosecutor) cash out differently depending on the type of outsourcing. “[S]ay what you will about insider trading, but its evolution as a body of law could not be fairly be described as ‘easy’ or solely in service of prosecutorial power.” (p. 101).
So, the aim here, as in the rest of the book, is to teach readers that some of the behaviors that concern us, such as the legislature’s “outsourcing” criminal lawmaking, can produce “divergent outcomes” depending on context (p. 104). And we owe it to ourselves to explore those different contexts and outcomes if we are serious about reforming white-collar crime and identifying outsourcing’s drawbacks.
The chapter closes by highlighting a particular drawback that the rest of the book takes up in later chapters – namely, that by leaving our statutes underwritten, and thereby relying on other agencies to define their meaning, our legislature abandons any attempt to subdivide crimes into better and worse versions. That is, we spend so much time trying to figure out what is and is not “insider trading,” that we forego the attempt to create laws that describe and forbid different variations of “insider trading” from bad to worse. I thus end the chapter on page 106 with this critique:We almost certainly would prefer a series of insider trading laws that recognize distinctions between insiders, misappropriators, and gift tippers and tippees. But we instead rely on courts to interpret a single, undifferentiated fraud statue to encompass all insider trading. A reflective legislature would ask why these activities are wrong, how much harm they cause collectively, and relative to one another, and how much culpability they reflect, as both an absolute and relative matter. A well-designed legislative code wouldn’t punt these distinctions to a prosecutor’s office or a sentencing judge; it would incorporate these principled distinctions into the code itself, signaling to both citizens and legal actors alike that these distinctions matter… That’s a far better world than the one we currently have.Interested in how I try to resolve these issues and come up with a better code? Buy the book! And do be sure to take a look at several of the later chapters.
--Marshal Zeringue
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