The world is drowning in corporate fraud, and the problems are probably greatest in rich countries – those with supposedly “good governance.” Poor-country governments probably accept more bribes and commit more offenses, but it is rich countries that host the global companies that carry out the largest offenses. Money talks, and it is corrupting politics and markets all over the world. Hardly a day passes without a new story of malfeasance. Every Wall Street firm has paid significant fines during the past decade for phony accounting, insider trading, securities fraud, Ponzi schemes, or outright embezzlement by CEOs. A massive insider-trading ring is currently on trial in New York, and has implicated some leading financial-industry figures. And it follows a series of fines paid by America’s biggest investment banks to settle charges of various securities violations.
From Jeffrey D. Sachs’s recent article The Global Economy’s Corporate Crime Wave. The bad news is that “the close connections of wealth and power with the law, reining in corporate crime will be an enormous struggle”. So how then do we rein in leviathan? Sachs hopes that “rapid and pervasive flow of information nowadays could act as a kind of deterrent or disinfectant. Corruption thrives in the dark, yet more information than ever comes to light via email and blogs, as well as Facebook, Twitter, and other social networks”. That means in a country such as ours where these mediums are yet to find a home, and public media is effectively shackled, it’s a hard road fighting corporate fraud. In Zambia of course we have other bigger problems – that is the huge capture of political players through “campaign finance” and other forms of corruption. We touch on this in the monthly essay - Understanding Corruption in Zambia.