In Speech at City Bar, DA Vance Calls for Stronger Tools to Fight White Collar Crime

In a speech Tuesday at the New York City Bar Association, Manhattan District Attorney Cyrus R. Vance, Jr. announced that he will call on the New York State Legislature to strengthen the 1921 Martin Act, which he termed “marred by its overly lenient penalties.” “A broker who fraudulently deprives one customer of $500 is subject to the same penalty as a high-level market manipulator who deprives the investing public of hundreds of millions of dollars. And in either case, a state court judge would be authorized to impose a non-incarceratory sentence,” said Vance. The DA said he will ask the Legislature to strengthen the Martin Act “by conforming the penalties for different loss amounts to those in the current Grand Larceny statutes, and by lengthening the statute of limitation for misdemeanor Martin Act violations. Crimes involving $1,000 or more would be a Class E Felony, $3,000 or more would be a Class D Felony, $50,000 or more a Class C Felony and $1 million or more a Class B Felony. Thus, the small-time broker who defrauds his customer of just over $1,000 would be subject to the E Felony maximum of 1 1/3 to 4 years, while the sophisticated perpetrator of a large-scale accounting fraud would be subject to a prison term of up to 8 1/3 to 25 years, with a mandatory minimum state prison term of 1 to 3 years.”

Vance views the fight against white collar crime—a term coined and defined in 1939 by sociologist Edwin H. Sutherland as “crime committed by a person of respectability and high social status in the course of his occupation”—as historically central to his office. “Enforcement of sophisticated frauds and securities laws has traditionally been a local law enforcement function in New York,” Vance said. “District Attorney Joab Banton was bringing securities fraud cases in the 1920s, and the 1938 Thomas Dewey prosecuted Richard Whitney, former president of the New York Stock Exchange, for stealing from clients of his securities firm. That same year, District Attorney Dewey established a specialized Frauds Bureau in the Manhattan District Attorney’s Office.” The Frauds Bureau has been absorbed into the new Major Economics Crime Bureau in the DA’s office, but the mission remains the same. “[L]ike many of my predecessors, I recognize that the very legitimacy of law enforcement depends upon demonstrating that the powerful, the wealthy, and the privileged enjoy no immunity from prosecution as a consequence of their status.” Read DA Vance’s speech here.