The theft and subsequent disposition of securities and organized crime's alleged involvement therein: a descriptive study
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Abstract
Purpose: The primary purpose of this study is to provide an analysis of the theft and subsequent disposition of securities and to ascertain how involved organized crime is in these matters. The specific objectives of this study are: 1. To study the origins and development of organized crime in the United States. 2. To trace the development of organized crime in the United States from its early origins to its present existence as a large scale, business type operation with diversified and widespread investments and operations. 3. To study the origins and development of the securities industry to ascertain how stock certificates and associated paper work are processed. 4. To analyze the modern operations of the securities industry to ascertain how stock certificates and associated paper work are processed. 5. To determine what aspect of the securities industry began to malfunction and enabled the widespread thefts of securities to be accomplished with apparent ease. 6. To determine the scope of securities thefts, and the methods by which they were stolen. 7. To ascertain the existence of and the extent of organized crime's involvement in the theft and subsequent disposition of securities. 8. To determine the methods by which these stolen securities are disposed. 9. To analyze and evaluate the recommendations being offered to control and reduce the losses incurred through the theft and disposition of stolen securities. Methods: The primary method of research was through the analysis of the existing literature in this area. The prime source document was the Hearing on Organized Crime and Stolen Securities held in 1971 by the Permanent Subcommittee on Investigations of the Committee on the Government Operations of the United States. Additional information was requested and received from various securities industry representatives and governmental agencies. Findings: Some of the more salient observations derived from this study were: 1. Organized Crime does exist in the United States and most often functions as a supplier of desired, illicit, goods and services. 2. Organized crime as it is known today first began operating as a large scale operation during Prohibition. 3. Because of increased sales volume and the increased volume of paper work handling associated with these increasing sales, the securities industry experienced, during the late 1960s, a period where the paper work operations became overburdened, and consequently, it failed to function properly. This failure enabled widespread thefts of securities to be perpetrated with apparent ease. 4. Organized crime's central function in the theft and subsequent disposition of securities appears to be in providing the means and methods of disposition. 5. Of the many proposed remedies bring suggested, the one which calls for the complete elimination of the stock certificate is the only one being offered which would remove the single piece of paper which makes the theft of securities and their subsequent disposition possible.