The recent trends in white-collar crime have not been without cause. They coincide with a massive global pandemic that has created uncertainty, social isolation, and unemployment for millions. Because of these conditions, people have turned to other means to support themselves. And some of these means opened doors to the world of white-collar crime.
Identifying white-collar crime
It is not always easy to recognize white-collar crime when engaging in it. This is because these types of crimes do not rely on violence to commit. Rather, they are crimes of deceit and fraud. White-collar crime includes an assorted and extremely large number of offenses.
Because of their non-violent nature and diversity of offenses, many people are not aware their actions are illegal until law enforcement visits them.
GameStop stock surge
Recently, the media covered a GameStop stock surge is which now undergoing a criminal probe by the federal government. The government wants to know if GameStop participated in a market manipulation scheme. (Market manipulation is a type of securities fraud, white-collar crime.) The feds are investigating the company and the conduct of the investors who drove the price surge.
The event under investigation centers around two weeks in January 2021 when GameStop stock prices rose from $20 to $483. The stock prices rose after hedge funds began predicting GameStop stock prices would fall.
As news of that prediction spread, several gamers took to the social media platform Reddit. They began encouraging others to buy GameStop stock through the Robin Hood app. These discussions led to action, creating a snowballing effect that pushed the stock prices up.
When investors started selling off their stocks, Reddit stopped trading for 30 days. But by then, many investors had suffered heavy losses.
Ignorance of the law
Considering these traders were amateurs, it is unlikely that they knew discussing stock actions online was illegal. Many had never bought a stock before in their life. And Robin Hood offered little support in educating users on their app.
Some traders involved will likely choose to speak freely to law enforcement inquiring about their activities. They’ll reason they had no intention of breaking the law, so everything should turn out fine. But this would be a horrible mistake.
Law enforcement is only interested in establishing that a crime was committed. If a person is found guilty of committing a white-collar crime, the severity of the sentencing increases if at least one person comes to financial harm. The punishment for these crimes can range from home confinement (in rare cases) to prison sentences up to 30 years and/or $10,000 in fines.
If you are ever contacted by law enforcement for white-collar crime, stop. Whether you did it or not, or acted innocently or not, does not matter. Never offer to give law enforcement “your side of the story.” Always seek out the advice or counsel of a lawyer before talking to law enforcement about anything.