White collar crime

What is really a white collar crime?

Well you won’t find this term being defined anywhere. It is usually used as a broader term to commit any offense which has a financial motivation and also it’s not a crime that involves physical violence

History behind this term:

The term white collar crime was coined in 1930’s by criminologist and sociologist Edwin Sutherland. He used the phrase to describe the types of crimes commonly commited by person of respectability people who recognise as possessing high status.

What are its types?

Insider trading : using that sensitive information of a company to buy or sell stocks.

Corruption : Taking illegal gratification as a public servant to favour a particular entity

Ponzi scheme : Named after Charles ponzi the original perpetrator of such scheme. A Ponzi scheme is an investment scam that offers investors extremely high return.

Money laundering : money laundering is a service essential to the needs of criminals who deal with large amount of cash.

Cheating, forgery, data theft, all of these offences are white collar crimes only if the motive is financial.

Classifying white collar crimes

(i) Individual crimes : a financial crime committed by an individual or a group of individual
For example : ponzi scheme

(ii) corporate crimes : some crimes occur in corporate level.

Blue collar crime vs white collar crime
The difference between the white collar crime and blue collar crime stems from the different type of criminal activity that the criminal has access to engage in.

Blue collar crime because of more limited means of people committing it tends to be more straight on roberry.

In contrast white collar criminals are more often in position as being a loan officer in bank. To commit white spread and complex fraud schemes.

Why they do it?


Criminal is not made. Criminal is born.

There are certain people who commit offences and they are genetically pre disposed to comit offences.

And there is also Bermuda triangle of presure opportunity and rationalisation

Who should be punished and how?

White collar crime is committed by not taking a knife in your hand. They are committed by changing a number in a spreadsheet, singing a document, or else.

Doctrine of attribution
& Doctrine of identification

When a company’s minds and acts are identified with the acts of its most important included members.

If there is a director or a functionary of a company who is done an act or committed an offense in the course of his employment or in the scope of his duty that act can be attributed on the company.

Decision of supreme court in Sunil Bharti Mittal vs CBI

Court examines in detail on how a directors act can make a company liable .

The ministry of co-operate affairs came out with a circular which says the registrare of a company that you should not prosecute non executive nominee independent directors at a drop of a hat.

Section 149 sub section 12 of company’s act says :

Normally non executive directors are non liable unless you can prove that they had the knowledge of the criminality.


Edwin Sutherland a sociologist and criminologist invented the term white collar crime.

White collar crime may be perpetuated by individual or at a corporate level.