White Collar Crime in Trinidad and Tobago. The Collapse of CL Financial Ltd

Master's Thesis, 2014

103 Pages


Table of Contents

Chapter 1
Problem Statement
Significance of the study

Chapter 2
Defining White Collar Crime
Theoretical arguments
Rational Choice
Strain and anomie control
Opportunity and Motivation
Violation of trust theory

Chapter 3
Conceptual Framework
Data Collection Method

Chapter 4
Findings, Analysis and Discussion
Accounting and Transparency
Excessive Inter-group Transactions
CIB account issues
Executive Flexible Premium Annuity
Corporate Governance
Oversight and Regulation
Rational Choice
Strain and anomie control
Opportunity and Motivation

Chapter 5


Terms of Reference

CLICO Investment Bank (CIB) - Synopsis of Ernst & Young report – As Prepared by Counsel to the Commission

Chapter 1


At the dawn of the twenty first century, academics and policy makers experienced a significant shift in the way they viewed crime. Increasing attention was now placed on conceptualizing and understanding an emergent area in criminology, white-collar crime. Although not new, it represented a radical shift in the studies attempting to understand the criminal mind. To early criminologists, crime was associated with the activities of the lower class offenders who populated the courts and prisons (Croall 2001), rather than the elite classes.

The extant theories and research conducted at that time sought to identify the causes of crimes that presumably belonged in the pathologies of the offenders, that of poverty and deprivation. Criminologists and those investigating crime within biological, psychological or sociological traditions were more interested in studying street crime and delinquency than the crimes of those in business organizations (Paternoster and Simpson 1996). This concept was challenged by American criminologist Edwin Sutherland, who in 1939 at a presidential address to the American Sociological Association first coined the term ‘white collar crime’, by declaring that such crime was not an isolated phenomenon but a significant part of the landscape of criminal behaviour. (Shapiro 1990) argued that the concept of white-collar crime emanated from Sutherland’s attempt to liberate traditional criminology and the thinking from the “cognitive misbehaviour” reflected in the spurious correlation between poverty and crime.

Despite Sutherland’s recognition of the importance of the white-collar crime category, it never achieved the centrality and prominence in criminological study that he proposed (Weisburd and Waring 2001). This has since changed, as worldwide, there have been significant strides to address the issue with legislative and regulatory frameworks being implemented, enhanced oversight and monitoring mechanisms to ensure transparency and that culpable persons and organizations being held accountable for their actions, receive jail time.

Today, white-collar crime is an evolving field with an ever-broadening scope, which has a staggering impact on society. Sutherland’s concept was not intended to be definitive but to draw attention to crimes not ordinarily included in traditional criminology. He condemned social scientists for their apparent class bias and their exclusive focus on crimes committed by the less fortunate. Sutherland (1983, 7) defines white-collar crime a as “crime committed by a person of respectability and high social status in the course of his occupation.” This definition was class based, the preoccupation being with whom the alleged perpetrator was rather than with the offence that was committed (Baker 2004). Sutherland (1983) placed significant emphasis on the social position of the perpetrators and on the illegal acts of businessmen, professionals and politicians that are notably absent in the blander designations, such as occupational crime and economic crime that sometimes are employed to refer to the same kinds of law-breaking (Baker 2004).

Sutherland as quoted in Price and Norris (2009) posited that "situations and social bonds within an organization" attributes to the creation of the climate and environment for the encouragement of white-collar crime. He opined that persons of the upper socio economic class engage in much criminal behaviour and it departs from that of the lower classes because of the administrative procedures used in dealing with offenders. He highlighted that a power differential existed between the victims and perpetrators, perpetrators and legislators were generally similar in background and social status.

Sutherland (1949) argued that white-collar crime costs society several times more than street crimes in terms of financial losses. While his estimates maybe dated in today’s reality, the fact remains that white-collar offences cause larger financial losses to victims than a street crime would. Taking this into account, it is no surprise that monetary estimates from the Federal Bureau of Investigation and the Association of Certified Fraud Examiners approximate the annual cost of white-collar crime as being between $300 and $660 billion.

The Federal Bureau of Investigation (FBI) estimates, routinely suggest that far more is lost to white-collar crimes than to traditional property crimes such as larceny, robbery, and burglary. For example, corporate malfeasance has been the foundation for some of the United States costliest misdeeds with the revelations at Enron and World-Com unearthing the two largest bankruptcies in U.S. history. The United States government’s response to both scandals resulted in the enactment and strengthening of legislation and a myriad of charges (including conspiracy, securities fraud, wire fraud, bank fraud, insider trading, and money laundering) being brought against high-ranking officials who were subsequently incarcerated. The precedent that was set sent a strong message worldwide and forced nations to take heed.

The Caribbean region has not been exempt from incidents of white-collar crime. Despite the worldwide shift, white-collar crime has still not been afforded the status of a high priority social problem by Caribbean societies. The region has been quite delinquent in addressing white-collar crimes issues. As such, the true extent of the problem regionally and locally remains largely unknown. Although investigative journalists have done some work in the region, very little academic research on white-collar crime has as yet been undertaken. This can be attributed to the region’s high level of violent crimes, which have predominated the region’s agenda for years. According to figures from the United Nations Office of Drugs and Crime (UNODC) and Interpol, the overall Caribbean murder rate of 30 per 100,000 is higher than for any other region of the world . The region’s preoccupation with violent crimes is therefore understandable as they represent an immediate and real threat to the lives of citizens and carry a greater fear factor. Yet one should understand that violent crimes, pale in comparison to the devastating effects of white collar crime such as financial failures caused by mismanagement, corporate malfeasance and criminal intent.

In Trinidad and Tobago, white-collar crime exists in many forms at all levels in society though often ignored. Allegations of wrongdoing are hardly reported or even investigated, thus the chances of any criminal liability is virtually non-existent. The main reported form of white-collar crime is fraud although since its inception the Financial Intelligence Unit of Trinidad and Tobago (FIUTT) has reported increasing numbers of Suspicious Transfer Reports (STRs) and Suspicious Activity Reports (SARs). Despite the high presence of questionable activity reported to the FIUTT of people misusing the financial systems to launder money, only one person was arrested and charged for engaging in fraudulent behaviour in 2012. To date, there are no prosecutions to show Trinidad and Tobago’s effectiveness in dealing with white-collar crime. The general perception held by most citizens is that white-collar crime is corruption. However, the collapse of CL Financial (CLF) represents the most glaring example of white-collar crime, which also served to enlighten citizens, the consequences of which may extend far beyond monetary costs to cause the death of some investors.

Problem Statement

The CL Financial Group represented the largest trans-regional financial enterprise and was a prime example of regional integration of companies in the Caribbean region The business model employed by the group, relied on a highly-leveraged intra-group activities, funds were acquired through the offer of unusually high interest rates by its financial subsidiaries. According to the former Central Bank Governor Ewart Williams (2009) CLICO became the guarantor for the group’s assets and was a major source of cash to finance investments for the other entities in the group. The evidence presented suggests that the Group also practiced regulatory arbitrage across CARICOM member States, and within States, exploiting loopholes in the regulatory structure between banks and non-bank financial institutions, and between regulatory structures across the sub region (ECLAC 2009).

CLICO’s imposing presence across the region along with its business success made it the entrepreneurship flagship of the Caribbean (Soverall 2012). This meant that the corporate collapse of the CL Financial group (CLF) represented the worst financial tremor to be experienced by the region to date. The failure of CLF and its insurance subsidiaries, posed a systemic threat to the financial sector of the country and the region, given the group’s long and many tentacles. It endangered not only the financial system but placed at risk of severe depreciation, the life savings of thousands of citizens who had invested substantial sums of money totaling billions in the group.

The Central Bank of Trinidad and Tobago (CBTT) and the Trinidad and Tobago government cognizant of the contagion risk associated with a collapse of an institution as large as CLF intervened in an attempt to minimize the impact on the region. The Bank surmised that the financial difficulties being faced by CIB and Clico resulted from: “Excessive related-party transactions which carry significant contagion risks; an aggressive high interest rate resource mobilization strategy to finance equally high risk investments; Very high leveraging of the Group’s assets, which constrains the potential amount of cash that could be raised from asset sales”.[1] CLF operations revealed several inadequacies in the legislative and regulatory framework of the CBTT which in 2009 still lacked the legislative authority to conduct onsite supervision, share information with other regulatory bodies or even demand that changes be made to ensure compliance (Soverall 2012).

In light of the above, this study examines white-collar crime in Trinidad and Tobago exploring why the CL Financial institution failed. It intends to generate an understanding of the reasons behind the collapse of the insurance giant utilizing a qualitative research method. An analysis of existing documents and evidence tendered in the recently concluded Commission of Enquiry will be conducted to answer the following research questions:

What factors contributed to the financial failure of CLF?

How can criminological theories explain what occurred at CLF?

What role could the state have played to prevent the collapse of CLF?

How important is regulation and oversight to a financial sector?

Significance of the study

The Caribbean region has not been exempt from incidents of white-collar crime. Despite the worldwide shift, it still has not been afforded the status of a high priority social problem by Caribbean societies. This can be attributed to the fact that high crime rates have predominated the region’s agenda for years, according to figures from the United Nations Office of Drugs and Crime (UNODC) and Interpol, the overall Caribbean murder rate of 30 per 100,000 is higher than for any other region of the world . The region’s preoccupation with violent crimes is understandable as they represent an immediate and real threat to the lives of citizens and carry a greater fear factor. Whilst white collar crimes are difficult to detect, not often understood by most and is perceived as being committed by persons from the upper classes. Violent crimes, pale in comparison to the devastating effects that financial failures caused by mismanagement, corporate malfeasance and criminal intent.

In March 2011 the government of Trinidad and Tobago initiated a commission of enquiry into the collapse of the CL Financial group. The commission was mandated to report on the causes of the costly failures, make recommendations for possible prosecutions and the regulatory or systemic changes required to avoid further collapses. This speaks to the significance of this research since efforts are being undertaken to address the issue of white collar crime, in addition there lacks any academic research utilizing existing criminological theory to explain white collar crime in Trinidad and Tobago. Although investigative journalists have done some work in the area, very little academic research on white-collar crime has as yet been undertaken. White-collar crime is an evolving field with an ever-broadening scope, which has a staggering impact on society and thus any study, which addresses concerns about this impact on society, should be considered as important.

Chapter 2


Defining White Collar Crime

Edwin Sutherland has been credited with defining the concept of ‘white collar crime.’ To him, it is ‘crime committed by a person of respectability and high social status in the course of his occupation’ (Sutherland 1983). Whilst his definition served to call attention to crimes of the upper socio economic classes, it received heavy criticism. Some academics held the view that it dismissed the traditional “mens rea requirement and the presumption of innocence, thus creating legal quagmires and contravened the fundamental legal maxim in criminal law.[2] Tappan (1947) severely criticised Sutherland’s definition citing that it departed from the legal definition and described the development as “a seductive movement to revolutionise the concepts of crime and the criminal.”

Despite Tappan and other critics’ views, Sutherland’s influence remained and emerging academics modified his definition to suit the changes in society. For this study, Friedrichs (1997) definition will be used. He defines white collar crime as “a generic term for the whole range of illegal, prohibited and demonstrably harmful activities involving a violation of a private or public trust, committed by institutions and individuals occupying a legitimate, respectable status and directed toward financial advantage or the maintenance and extension of power and privilege.” The researcher selected this definition as it comprehensively defines the concept, encompasses all possible areas where white-collar crime can occur whilst being applicable to Trinidad and Tobago.

Several explanations can be proffered to account for the existence and occurrences of white-collar crimes and the demise of insurance giant CL Financial (CLF). However, white-collar crime is field that is so highly controversial, complex, and multifaceted, that difficulties arise even in locating suitable explanations, in one singular theory. It is not an autonomous discipline; instead it most assuredly interdisciplinary combining individuals from multiple disciplines and professions such as accountants, attorneys, auditors, investigators and law enforcement. White-collar crime is a difficult area to investigate and research particularly as it departs from traditional criminal offences even though they cost more to society. The invisibility, complexity and diffusion of responsibility render detection difficult, in addition to the low rates of prosecution and limited official statistics. As a result, this has often led researchers to rely on disparate and often less reliable forms of data.

This researcher encountered some degree of difficulty in acquiring suitable literature for use in this discourse particularly since almost all research found has its underpinnings in the United States and United Kingdom. Instances of white-collar crime in the Caribbean region are a relatively new phenomenon although financial crises are not. Browne (2011) attributes this to the relative weakness of the money and capital markets in the developing world, where there are limited policy options; the failure of a large institution can have significant repercussions.

In 1991, there was the Bank of Credit and Commerce International (BCCI) debacle, where several Caribbean islands offshore financial centres were entangled in high profile scandals; nations were forced to reform their financial sector and institute policies of good corporate governance (Pussey 2007). Then in 1997, the Jamaican financial crisis. Although the 2001, collapse of Enron, WorldCom, Adelphia and others were highly publicised scandals worldwide, little attention was paid until 2009 when regional conglomerate CL Financial collapsed. The CL Financial collapse is significant both for citizens of Trinidad and Tobago and by extension the region, for many, this was their first real example of white-collar crime.

Despite some of the challenges encountered, the researcher was able to identify criminological theories and other probable explanations for the collapse of CL Financial. For this study, the following criminological theories have been selected; rational choice, strain/ anomie, opportunity theory and the “trust” factor theories, as they are the few in the researcher’s opinion that are most applicable.

Theoretical arguments

Rational Choice

Rational choice theory has become one of the most used explanations for white-collar crime. Coleman (1987) building on Sutherland’s initial definition argued that all white-collar crimes are by definition violations of the law committed in the course of a legitimate occupation or financial pursuit by persons who hold respected positions in their communities. He argued that all types of white-collar crimes are rational calculating crimes, not crimes of passion. Rational choice theory operates on the premise that the choice to engage in criminal activity is preceded by a decision making process where individuals weigh costs and they pay particular attention to paying to potential aversive consequences like the possibility of arrest and punishment (Shover and Hochstetler 2006)

Coleman forwarded that the goal of the vast majority of white-collar criminals is economic gain or occupational successes that may lead to economic gain. Although white-collar crime causes more far more deaths and injuries than other types of crime (Coleman 1985), this violence is an always a by-product of the offence not the immediate goal, as it is in assault or murder. Even though organizational crime is generally treated more leniently than occupational crime, the justice system shows greater leniency to all types of white-collar offenders than to those who have committed common crimes of equal severity.

This theory is relevant to this research study as, rational conscious decisions had to have been taken by executives of CL Financial to act in the manner they did. Inherent in this theory is the decision-making element, which is critical to explaining why certain decisions were taken. This theory has been touted as one of the most suited to explain the causation of crime. It is logical, simple, has a broad scope and is easily proven by the decisions taken by perpetrators through the types of offences, selection of victims, where, when and how offences are committed. Despite its obvious utility, this theory tends to exaggerate individual choice thus ignoring other societal factors such as family background, economic deprivation, and living conditions, without these a proper determination of the causes of crime cannot be provided. Although, those factors are not applicable to white-collar crime in Sutherland’s sense, they ought not to be discounted.

Strain and anomie control

Nelken (1994) argued that strain theories of corporate crime are founded upon Merton’s concept of anomie, which is quite applicable to white-collar crime; suggests that a high crime rate is related to a society's strong emphasis on the individual's material success at the expense of no economic institutions that exert social control, such as family, education, and commitment to the public welfare (Schoepfer and Leeper-Piquero 2006). White-collar crime occurrences can be categorized and viewed as “an innovative response” on the part of the organization or particular roles as middle or senior management to the strain of confirming to cultural prescriptions to maintain profits even in difficult circumstances (Vaughn 1996; Slapper and Tombs (1999) as quoted in Huisman and Vande Walle (2010). Executives are placed under intense pressure to perform, produce and meet quotas even in periods of economic downturn. Some, rather than properly analyze the situation and in an effort to fulfil their tasks and obligations to the organization hierarchy would attempt to do so by any means necessary, legitimate or illegitimate.

Anomie theory posits that offenders are so motivated by the fear of losing their high-status positions and their economic security that they will engage in illegal activity. It is also possible that these corporate offenders may harbour high expectations of power, and material success and aspire to individual wealth; as such they experience strain in their inability to achieve such; and are unable to relieve that strain without resorting to crime. High profile accounts of securities fraud and accounting scandals suggest that contractions in the market and other pressures to maintain profits led executives of firms such as Enron, Tyco, and WorldCom to begin using illegal and fraudulent accounting techniques to hide the fact that their firms were losing money while enriching themselves (Gerber and Jenson 2007). These companies operated in an industrial environment where innovative means were encouraged as a means to make money similarly with CLF.

Friedrichs posits that greed a reported motivator of white-collar crime, flourishes in a culture that emphasizes potently the pursuit of the “American Dream” of material success. Caribbean society shares similar cultural values, as persons also endeavour to achieve similar success goals. There is also unequal distribution of wealth, resources and access. As people aspire to attain particular goals and lifestyles, there is additional pressure placed on persons holding particular positions in society to conform and maintain the status quo and image.

Crime or deviant behaviour ensues when social structure restricts or completely closes a person’s access to the approved modes of reaching these goals. Corporate fraud, insider trading and criminal breach of trust are some notable examples. In relation to this, Neil Shover (1998) states that some white-collar crimes are committed as a result of the pressure to meet Self-defined or externally imposed standards of successful performances. Box (1983) as quoted in Passas (1990) proffered his own interpretation, arguing that ‘the goal seeking structure of profit maximization, combined with uncertain economic conditions ‘thus made a corporation inherently criminogenic.

His theory makes sense in that in reality, executives are routinely faced with economic contractions, uncertain environment, pressures to reduce costs, individuals this seek alternative means to make money such as avoidance, evasion or blatant violations of ethics or laws.

Alternatively, white-collar crime can promote anomie whilst reflecting it. Passas (1990) as quoted in Freidrichs (2009) argued that the commission of crimes by the privileged in society coupled with their broader immunity to prosecution contributes significantly to an anomic climate in society. This now confuses the less privileged in society as they become more cynical and blurs the lines about what rules really obtains for a lawful society. This can have substantial far reaching consequences for society due the message it conveys and may contribute to further discord, disparity and disenchantment among citizens particularly in countries like Trinidad and Tobago where there is unequal distribution of wealth. The critical aspects of strain and anomie theories which accounts for its suitability to explain white collar crime include, greed, pressure to attain or meet particular targets in the face of declining economic growth and profits, and the desire for material success.

Opportunity and Motivation

This theoretical argument is relevant to this research study because in small, developing societies such as Trinidad and Tobago, where there is inadequate legislation, lack of proper enforcement, poor regulation, corruption and nepotism, increased role of multinational companies and aggressive competition, opportunities and motivations to commit some form of white collar offence is abound. Coleman (1987) developed an integrated theory premised upon the correlation of appropriate motivation and opportunity. He hypothesized that criminal behaviour results from such a coincidence.

He defines motivation, as a set of symbolic constructions defining certain kinds of goals and activities appropriate and desirable and others as lacking those qualities. Opportunity is seen as a potential course of action made possible by a particular abuser of social conditions, which has been symbolically incorporated into an actor’s repertoire of behavioural possibilities (Coleman 1987). In other words, a potential course of action only becomes an opportunity when someone becomes aware of its existence. Coleman (1987) argues that the motivation for law breaking generated in a culture where there is emphasis on the following: “possessive individualism, competition, materialism, justifies rationalization and removes unified restraining influences.”

Friedrichs however posits that an inherent opportunity structure renders white-collar crime both less vulnerable to legal controls and sanction and open to a variety of attractive possibilities for disregarding or violating the laws already in existence. This is partially due to the disproportionate power of the elites involved in the formulation and enforcement of the said legislation and policies. This argument is true to form, as CL Financial executives held unwieldy influence over the government of the day thus allowing them the flexibility to engage in corrupt practices free from interference.

In the private sector, attractiveness for illicit opportunities increases as profitability declines. The organizational practice of condemning illegal acts conflict with the conditions that promotes such activity, as there is diffusion of responsibility, deniability and lack of authentic objections. Enron had a policy where all employees who were ranked in the lowest 15% of their group were replaced each year (Moohr 2003). Thus creating an environment where employee refused to object to and voice concerns for fear of victimization or dismissal. Several other factors exist that can make an organization more susceptible to illegality such as the opportunity structure, the complexity of the organization and the nature of the financial remuneration.

The opportunity structure concept is premised on the basis that crime derives from the varying access to, and capacity for exploiting legitimate and illegitimate possibilities of realizing goals that are possessed by groups from different social classes (Cloward and Ohlin (1960) as quoted in Engdahl 2009). Like opportunity structure, the complexity of the organization also enhances chances of illegality and presents the environment for it to occur. Weisburd et al. (1991) as quoted in Engdahl (2009 ) argued that increasing possibility of committing crime in decision-making positions is greatest in environments with high organizational complexity such as conglomerates and multinationals like CL Financial.

In support of Weisburd (1991), Vaughn (1983) quoted in Peltokorpi (2003) elaborates further by proffering the characteristics of such an organization through a linkage of specialization, large quantity of transactions and a division of work .It thus becomes difficult for the groups in the organization to control and assess each other. Engdahl (2009) asserts that in organizations with the aforementioned conditions, the opportunities for crime grow as a result of the creation of uncontrolled spaces and lack of accountability; persons are able to violate rules without detection.

Violation of trust theory

Sutherland in his discourse “Crime and Business” 1941 stated that the most general although not universal characteristic of white-collar crime is the violation of trust. This trust may be delegated or implied in the relationship and in both cases it is accompanied and consummated by misrepresentation. Susan Shapiro has built upon Sutherland’s notion of violation of trust being inherent in white-collar crime and is of the firm belief that upon such basis all white-collar crime studies should begin. These violations may take the form of misrepresentation, theft, misappropriation, self-dealing, corruption, and role conflict. She called for persons to pay greater attention to the increasing necessity and reliance on ‘agents’ thus increasingly vulnerability and exposure to risks and their malpractices.

To understand causation, Shapiro argued that there therefore needs to be a marriage of the systematic understanding of the conditions under which individuals or organizational fiduciaries seize or ignore illicit opportunities (Shapiro 1990). Despite her convincing argument, Shapiro (1990) is realistic and acknowledges the difficulties to be encountered in an attempt to prosecute these violations as they occur behind closed doors and the parties involved are able to manipulate the organizational structure to conceal their misdemeanors . Shapiro’s (1990) theory is practical and calls attention to a critical feature in white-collar crimes that is the violation of trust. Executives at CL Financial directors failed in the exercise of their fiduciary duties and violated the trust of their investors.

The existent research data and theories although useful to providing possible explanations as to why white-collar criminal offences are committed, they do have their limitations. Adaptation wholly to the Trinidad and Tobago society is difficult as it ought not to be forgotten the context under which they were formulated. Both the United States and Great Britain share marked differences from this country; society, size, culture, people, infrastructure among other things. Trinidad and Tobago like other Caribbean islands were subject to structural adjustment programmes imposed by the International Monetary Fund (IMF) and World Bank (WB), which significantly impacted on their domestic economies. Those policies to promote competition, economic regulation, and increased role of the private sector and trade liberalization have served to make the region more vulnerable to white collar offences.

Trinidad and Tobago in particular, boasts of having one of the more developed financial systems in the region, it is quite large and complex. There exist strong ownerships and transactional linkages among insurance companies, banks, securities firms and other sectors. This process has been facilitated by the dominance of internationally active, mixed activities conglomerates, seeking new liquidity sources and investments (IMF 2006). This creates an environment conducive to white-collar crimes, where sharp reversals in equity prices may have adverse effects on the insurance and pension sectors. The connected exposures of some conglomerates like CLF worldwide increased the risk of contagion effects, in addition to acquired reputational and financial risk through the concentration of investments in the Caribbean Community (CARICOM) area (IMF 2006). Prior to its collapse, CLF was highly regarded as a successful financial conglomerate as a prime example of financial and regional integration of companies within the region (Jhinkoo 2013). However, because of the group’s long and many tentacles, its failure has had devastating effects on Caribbean economies, effects of which are still being felt today. A sound understanding of the precipitating factors that caused the collapse is essential to preventing a reoccurrence in the future.

Chapter 3


Research is conducted to answer a question (Mc Caslin and Scott 2003). Virtually all forms of enquiry and research are geared toward some form of interpretation of an aspect of the world. Researchers seek to explain, understand or make sense of some aspect that has, in one way or another become problematic. Whilst motivations may vary widely, the process itself is shaped by presuppositions and assumptions coupled with our worldviews, paradigms, perspectives and beliefs

This research is a qualitative exploratory study into white-collar crime in Trinidad & Tobago. It is intended to generate an understanding of why CL Financial collapsed. There have been several articles in the newspaper written by investigative journalists and citizens providing their opinions about what occurred at CL Financial. However, there is a lack of any local academic analysis on the collapse, which is why this study is being undertaken.

Research has three major dimensions, according to Terre Blanch and Durrheim (1999) as quoted in Thomas (2010); they are ontology, epistemology and methodology. Each element influences how research questions are developed, the nature of the enquiry and how it is carried out. Ontological and epistemological opinions inform methodology and method choices (Nagy, Biber and Leavy 2011). Ontology forms the philosophical belief system about the nature of social reality, what can be known and how. Epistemology is concerned with who can be the knower (Guba and Lincoln 1998) as quoted in Carstens (2008). Both the ontology and the epistemology form the philosophical basis of a research project and influence every aspect of the research process.

Methodology is representative of the social reality or some component of the research project that extends further than what has been empirically investigated (Nagy, Biber, and Leavy 2011). The three major methodological approaches in qualitative research: (1) post-positivist, (2) interpretive, and (3) critical. Post-positivism asserts that the world is decorated and that relationships can be revealed and tested via reliable strategies. The interpretive position accepts that the world is constantly being created through group interactions, and thus, social reality can be understood through the activities of social actors. Critical perspectives also view social reality as ongoing but elaborate further to suggest that discourses created in shifting fields of social power shape social reality and the study.

Methods are the fourth dimension of research; it represents the tools used by researchers to collect data, a strategy of enquiry which moves from underlying assumptions to research design and data collection (Myers 2009) as quoted in Thomas (2010). Although there are other distinctions in the research modes, the most common classification of research methods is into qualitative and quantitative (Thomas 2010). At one level, both refer to distinctions about the nature of knowledge: how one understands the world and the ultimate purpose of the research. On the other hand, they refer to research methods, the way in which the data are collected and analysed, the types of generalisations and representations derived from the data.

Quantitative research methods were originally developed in the natural sciences. They were the more familiar tools for explorations, and with the use of numbers and percentages were powerful arguments to drive change, predict events and determine action (Cant 1997). There is a preference by scientists for quantitative research methods; however the findings at times can be misleading because the full picture is not revealed. Qualitative research methods were developed in the social sciences to study social and cultural phenomena. They represent a bigger picture of a situation or issue and can inform in an accessible way. Neither of the methods is intrinsically better, the suitability is determined by the context, purpose and nature of the research study in question. (Domegan and Flemming (2007) as quoted in Otway–Charles (2014) assert that qualitative research is geared toward exploring and discovering issues about a problem because very little is known about the problem, as often there is uncertainty about the dimensions and characteristics of the problem. It helps researchers understand people, the social and cultural contexts in which they live (Myers (2009) as quoted in Goodman (2011).

Stake (2010) identified three major differences in qualitative and quantitative: in the explanation and understanding as the purpose of the inquiry; the personal and impersonal role of the researcher; and the knowledge discovered and constructed. Additionally, qualitative employs inductive data analysis to provide a better understanding and explain the interacting realities and experiences of researcher and participant (Lincoln and Guba (1985) as quoted in Thomas (2010). It allows for a design to evolve rather than having a complete design at the start of the study. Quantitative however, is deductive and needs a hypothesis for research to begin.


[1] [1] Ewart Williams, Governor of CBTT CIB/ Clico remarks January 30 2009

[2] “actus reus non facit reum nisi mens sit rea;” An act does not make a defendant guilty without a guilty mind.

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White Collar Crime in Trinidad and Tobago. The Collapse of CL Financial Ltd
The University of the West Indies, St. Augustine  (Criminology department)
Criminology and Criminal Justice
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white, collar, crime, trinidad, tobago, collapse, financial
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Alexia McKell (Author), 2014, White Collar Crime in Trinidad and Tobago. The Collapse of CL Financial Ltd, Munich, GRIN Verlag, https://www.grin.com/document/337834


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