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> examined the characteristics of more than 250 U.S. public corporations that were involved in financial securities fraud identified in Securities and Exchange
by jefftk 6y ago
> examined the characteristics of more than 250 U.S. public corporations that were involved in financial securities fraud identified in Securities and Exchange Commission filings from 2005-2013. They were then compared to a control sample of firms that were not named in SEC fraud filings.
Alternatively, the SEC might be more interested in looking into larger companies.
- abakker 6y agoThis seems very likely to be the case. It also ignores that big companies have more employees who can both commit crimes or act as whistleblowers. Small scale corporate crime is likely easier to keep secret. Also, there is a lot of detection lag. Enron committed crimes for quite a while before they got caught. So did MCI.
- dundarious 6y agoPossibly true. However, while the IRS is not really analogous to the SEC, they do appear to audit EITC claimants (low income) at a very high rate relative to high income individuals. I have no evidence either way, but I wouldn't be surprised if the dollar value of tax fraud is skewed to higher incomes. https://www.propublica.org/article/earned-income-tax-credit-irs-audit-working-poor https://www.propublica.org/article/earned-income-tax-credit-...
- jefftk 6y agoExcept audit rates do rise with income, especially at the extremely high levels that are analogous to Fortune 500 companies: $0: 2.04% <$25k: 0.69% <$50k: 0.48% <$75k: 0.54% <$100k: 0.45% <$200k: 0.44% <$500k: 0.53% <$1M: 1.10% <$5M: 2.21% <$10M: 4.21% >$10M: 6.66% Per https://www.nolo.com/legal-encyclopedia/what-are-the-odds-being-audited.html https://www.nolo.com/legal-encyclopedia/what-are-the-odds-be... (Your article concurs: "Only households with income above $1 million were examined at significantly higher rates.")