Business Law Chapter 6: POWERS AND FUNCTIONS OF ADMINISTRATIVE AGENCIES and CRIMINAL LAW

What is Administrative law?

The body of law (i.e., rules and regs) created by administrative agencies in order to carry out their duties and responsibilities

What were the new agencies created after the Great recession?

Financial Stability Oversight Council and Consumer Financial protection Bureau

What do Administrative agencies do?

Issue regulations that make up the body of administrative law

What is an Administrative agency?

A federal or state agency/department established to perform a specific function.

- Administrative Agencies Exist at All Levels of Government

- Executive agencies, Independent regulatory agencies, State and local administrative agencies

Who creates federal admin agencies?

Congress

What is enabling legislation?

Statute that specifies the name, purposes, and powers of administrative agency

What procedural requirements does the Administrative Procedure Act include?

- Arbitrary and capricious test

- Fair notice

What is the Arbitrary and capricious test?

APA provides that courts should set aside agency decisions that are "arbitrary, capricious, an abuse of discretion, or not in accordance with the law."

What is rulemaking?

Formulation of new regulation

What are the three steps of Notice-and-comment rulemaking?

1. Notice the proposed rulemaking

2. Comment period

3. Final rulle

What is enforcement investigation?

Agency enforces its rules by conducting investigations to monitor compliance

Investigation might begin when an agency receives a report of a possible violation

What are adjunctions?

• Negotiated settlements• Formal complaints (public document)

• Role of the administrative law judge

• Hearing procedures

• Resolution of dispute through a hearing by the agency.

• Agency orders

What is the role of the administrative law judge?

Presides over trial-like hearing and must be unbiased

What is the exhaustion Doctrine?

Party seeking court review must first exhaust all administrative remedies

What is the process of a formal administrative adjunction?

1. Complaint

2. Answer

3. Hearing before administrative law judge

4. Order of administrative law judge

5. Appeal to governing board of agency

6. Final agency order

7. Appropriate court for review of agency decision

6. Court order

What is the freedom of information act (FOIA)?

• Requires federal government to disclose certain records to any person on request, even if no reason is given for the request.

• All federal government agencies are required to make their records available electronically.

• All State's (and municipalities/counties) have similar disclosure requirements

Why regulate financial and business activities?

1. Market failure

2. Asymmetric information

3. Principle-agent problems

4. Risk shifting

5. Moral hazard

6. Adverse selection

7. Externalities

8. Collective action problem and coordinated failures

What are the three basic functions of mostadministrative agencies?

1. Rulemaking

2. Enforcement

3. Adjunction

What sequence of events must normally occurbefore an agency rule becomes law?

1. Enabling Legislation (Authorization)

2. Rule Development

3. Notice of Proposed Rulemaking (NPRM)

4. Public Comment Period

5. Review and Final Rule Issuance

6. Effective Date and Publication

What are the difference civil and criminal law?

- Burden of proof

- Criminal sanctions

What is burden of proof for civil and criminal law?

- Civil: Plaintiff must prove case by a preponderance ofthe evidence

- Criminal : Prosecution must prove case beyond a reasonable doubt

What is criminal sanctions?

Sanctions imposed in criminal cases are harsher

What is the Civil Liability for Criminal Acts?

Allows victims to sue perpetrators for monetary damages in civil court, separate from state-prosecuted criminal cases

What are the two elements needed for a person to be convicted of a crime?

1. CRIMINAL ACT (actus reus) - the performance ofa prohibited/guilty act

2. STATE OF MIND (mens rea) a specified wrongfulstate of mind or intent on the part of the actor

What is Actus reus (the criminal act)?

Prohibited act

What is mens rea (State of mind)?

Wrongful mental state, recklessness and criminal negligence, struct liability and over criminalization

What is corporate criminal liability?

Liability of the corporate entity and liability of corporate officer and directors

What are the five types of crime?

1. Violent crimes: Robbery, rape, murder, assault/battery

2. Property crime: Burglary, larceny, arson, forgery

3. Public order crime: Public drunkennes, prostitution

4. White collar crime: Embezzlement, bribery

5. Organized crime: Money laundering

Money laundering

Making illegally-gained proceeds appear legal- i.e., turning "dirty" money into "clean" money

What is trade based money laundering?

The process of disguising illegal proceeds and moving value across borders by misrepresenting international trade transactions

What are defenses to criminal liability?

- Justifiable use of force and stand your ground

- Necessity

- Insanity

- Mistake

- Duress

- Entrapment

- Statute of limitations

- Immunity

What is probable cause?

Reasonable grounds for believing that a search should be conducted or an arrest made and reasonable expectation of privacy

What is the Exclusionary rule?

Prevents evidence obtained illegally or without a proper search warrant from being admissible in court

What is the Miranda Rule?

The Miranda rule requires police to advise suspects of their Fifth Amendment rights against self-incrimination before a "custodial interrogation"

Who sets the budget for the federal government?

Legislature

What is the criminal process?

1. Arrest: Need probable cause to issue warrant

2. Indictment: By grand jury or information

3. Trial: Guilt must be proved beyond reasonable doubt

What are the two types of cyber crime?

1. Computer crime

2. Cyber crime

3. Cyber fraud

4. Cyber theft

5. Hacking

What constitutional safeguards exist to protect persons accused of crimes?

1. Fourth Amendment: Protects against unreasonable searches and seizures and requires warrants based on probable cause.

2. Fifth Amendment: Guarantees protection against self-incrimination (right to remain silent), prohibits double jeopardy (being tried twice for the same crime), mandates grand jury indictment for capital crimes, and ensures due process of law.

3. Sixth Amendment: Guarantees the right to a speedy and public trial, an impartial jury, the right to confront witnesses, the right to compel witness testimony, and the right to legal counsel.

4. Eighth Amendment: Forbids excessive bail, excessive fines, and cruel and unusual punishments