Corruption

AAA

DEFINITION of 'Corruption'

Dishonest behavior by those in positions of power, such as managers or government officials. Corruption can include giving or accepting bribes or inappropriate gifts, double dealing, under-the-table transactions, manipulating elections, diverting funds, laundering money and defrauding investors. One example of corruption in the world of finance would be an investment manager who is actually running a ponzi scheme.

INVESTOPEDIA EXPLAINS 'Corruption'

To prevent corruption in the financial services industry, Chartered Financial Analysts and other financial professionals are required to adhere to a code of ethics and avoid situations that could create a conflict of interest. Engaging in corrupt behavior could result in job loss and revocation of a professional designation, such as the CFA title. Other penalties for being found guilty of corruption include fines, imprisonment and a damaged reputation.

RELATED TERMS
  1. Kickback

    The payment of something of value to an individual with the goal ...
  2. Amakudari

    A Japanese business practice in which senior politicians retire ...
  3. Foreign Corrupt Practices Act

    A United States law passed in 1977 which prohibits U.S. firms ...
  4. Bid Rigging

    A scheme in which businesses collude so that a competing business ...
  5. Racketeering

    Racketeering refers to criminal activity that is performed to ...
  6. Business Ethics

    The study of proper business policies and practices regarding ...
Related Articles
  1. Pages From The Bad CEO Playbook
    Retirement

    Pages From The Bad CEO Playbook

  2. Early Monopolies: Conquest And Corruption
    Personal Finance

    Early Monopolies: Conquest And Corruption

  3. Why Country Funds Are So Risky
    Investing Basics

    Why Country Funds Are So Risky

  4. Material Adverse Effect A Warning Sign ...
    Markets

    Material Adverse Effect A Warning Sign ...

comments powered by Disqus
Hot Definitions
  1. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  2. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  3. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  4. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  5. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  6. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
Trading Center