Why Do Companies Prosecute White Collar Crimes?

The first reason is that companies may have to allocate precious resources of their own if they were to prosecute white-collar criminals within the company. Prosecutions can be time and money consuming when comes to investigating the case to hiring lawyers to settle down the matter in court. This might interfere with the daily operations of the company and holds back their efficiency as part of their manpower and resources are used up in litigations of white-collar crimes. In addition to that, companies are less likely to prosecute if the perpetrator admits his or her mistake early or agreed to pay back the stolen amount, which often leads to the dismissal of the perpetrator. With the perpetrator being dismissed and the stolen money returned, there is one less headache for the company to look into and a prosecution might not be
This is because the news of prosecutions will be revealed and speeded easily by the use of social media. Furthermore, as white-collar crimes causes financial damage to a company, investors might have an impression that their invested funds are being misused and will consider to pull back their shares. Additionally, other stakeholders such as customers and suppliers might cease to carry out business with the company. This can potentially tarnish the reputation of the company and the company’s value will drop which will affect its business performance. Indirectly, prosecuting a white-collar criminal within a company signifies potential weaknesses or loopholes in the internal control system. Observant individuals in the company might look out for these weaknesses or loopholes and exploit it for their own interest. This can attract and provide the wrong incentives to carry out a fraud before the internal controls are being