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The Differential Management of Financial Illegalisms: Assigning Responsibilities in the Libor Scandal

Published online by Cambridge University Press:  01 January 2024

Thomas Angeletti Open the ORCID record for Thomas Angeletti [Opens in a new window]
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Abstract

How, in a context of growing critiques of financialization, can law contribute to protecting the legitimacy of finance? This paper argues that the assignment of responsibilities between individuals and organizations plays a decisive role, using the recent Libor scandal as an empirical illustration. To do so, the paper offers a Foucauldian framework, the differential management of financial illegalisms, dedicated to the study of illegalities in financial capitalism. The comparison of the legal treatment of two manipulations of Libor, this key benchmark in financial markets, reveals how mid-level traders have been the object of criminal prosecution, while law undervalued the role of top managers and organizations. To capture how differential management is performed in practice, I analyze precisely how the conflict-resolution devices (criminal trial vs. settlement) and the social categorizations prevailing in the two manipulations of Libor favor different forms of responsibility, individual or organizational. I conclude by exploring the implications of law's relationship to financial legitimacy.

Type
Articles
Information
Law & Society Review , Volume 53 , Issue 4 , December 2019 , pp. 1233 - 1265
Copyright
© 2019 Law and Society Association.

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Footnotes

I started writing this paper during a stay at the Max Planck Institute for the Study of Societies, and I thank especially Jens Beckert for his support. I benefited from reactions during successive presentations at the conferences of the Society for the Advancement of Socio-Economics, the French Sociological Association, the Law & Society Association, and at the Finance and Society conference. Many thanks go to Tim Bartley, Natalia Besedovsky, Sebastian Billows, Marie Le Clainche-Piel, Benjamin Lemoine, Gwénaëlle Mainsant, Marcin Serafin, and to the reviewers and editors of the Law & Society Review for their generous comments.

References

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