Weakened regulatory oversight breeds fraud and exploitive management

Evidence

In broadening the supervisory responsibility, Mahony created advisory and oversight boards to superintend the protection of children. However, resistance to litigation over the release of church documents continued. The archdiocese was accused of withholding many documents and removing the names of church officials who had supervisory responsibility (Goodstein & Medina, 2013). The church lawyers resisted the release, arguing that they would have to reexamine thousands of redacted documents. — Albert Bandura, Moral Disengagement, 526 (#complicates, via linked claim)

Many securities swindles use this ruse (Bennett 1985; “How Bank of America” 1985). Those seeking investments in a relatively unknown company represent to potential investors that funds will be insured by “Fidelity Fiduciary Guaranteed Trust Insurance, Inc.” (with a corporate logo that closely resembles that of the FDIC). In reality, this guardian of trust is a straw company with no assets, frequently run by the stock swindlers themselves or by their associates. This added feature often convinces many investors that the prospect is safe and induces their commitment. It is curious that even the most cautious in conferring trust can be easily taken in by trusttrusteeship scams. — Shapiro, Susan P., The Social Control of Impersonal Trust, 125 (#complicates, via linked claim)

Categorization

• XREF: connects to: Federal safety nets are weak enough to excuse some fraud as a survival bid — Anna Merlan, Republic of Lies, 677; Regulatory agencies drift toward the interests of the firms they regulate — Lawrence M. Friedman, A History of American Law, 2588; Fraudsters exploit trust in overseers by forging faux regulators — Shapiro, Susan P., The Social Control of Impersonal Trust, 125 (+11 more)

Broader Connections

• De-regulation created a criminogenic environment allowing mass financial wrongdoing #corroborates (0.95)
• Formal oversight structures can coexist with continued suppression of evidence. #complicates (0.80) — Albert Bandura, Moral Disengagement, 526
• Fraudsters exploit trust in overseers by forging faux regulators #complicates (0.72) — Shapiro, Susan P., The Social Control of Impersonal Trust, 125