Trust: the unwritten cost of
Thomas E. Dearden
Criminal Justice, High Point University, High Point, North Carolina, USA
Purpose – The purpose of this study is to empirically assess the theorized importance of trust and
resource removal following white-collar crime.
Design/methodology/approach – Two studies are conducted using data from the Washington Post
and ABC News Poll following the savings and loan scandal and the dotcom bust. The rst examines
trust in corporate contexts, and the second examines direct resource withdrawal from nancial
Findings – Results of a series of logistic regressions suggest that trust is impacted by high-prole
white-collar crime. Models 1 and 2 nd evidence that trust is a strong predictor of belief in investing in
a given industry. Models 3 and 4 provide evidence that high-prole trust breaches lead to resource
withdrawal, adding to the economic damages incurred directly from white-collar crime.
Social implications – This study provides evidence that white-collar crime can create much larger
nancial consequences than immediate losses.
Originality/value – Despite considerable theoretical ties between white-collar crime and trust, little
empirical evidence exists to support this notion. This study provides two empirical studies that address
the theoretical link.
Keywords White-collar crime, Trust, Trust breaches
Paper type Research paper
I can’t tell you how scattered we feel- it goes beyond nancially. It reaches to the core and
affects your general faith in humanity, our government and basic trust in our nancial
system. – Ellie Bussi-Sottile (Dassin and Clancy, 2009,p.11)
Madoff has shattered many people’s lives and their “American Dream.” Our nancial
markets lay naked with respect to integrity and protection for investors, and our country
will suffer for many years ahead the consequences of this crime. Our trust has been shaken
to its core […]. – Richard Shapiro (Dassin and Clancy, 2009,p.65)
For us what the defendant did far transcends the loss of money alone – it involves the violation
of trust. – Wendy Olsen (Dassin and Clancy, 2009, p. 134)
In March 2009, the 70-year-old Bernard (Bernie) Madoff pleaded guilty to 11 felonies. He
had successfully run the largest Ponzi scheme to date for as many as 30 years. The sum
Data were obtained through the interuniversity Consortium for Political and Social Research
(ICPSR) and can be found http://doi.org/10.3886/ICPSR09462.v1 and http://doi.org/10.
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Journalof Financial Crime
Vol.23 No. 1, 2016
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