Management and Control of Corporation Essay Example | Topics and Well Written Essays - 4750 words

Management and Control of Corporation - Essay ExampleMoreover, Romano (1998, 2359) states that although both the states and the federal official government regulate securities transactions, the current restrictive arrangements are a far cry from competitive federalism the federal securities regime, consisting of the Securities Act of 1933 and the Securities Exchange Act of 1934, applies to all publically traded firms and is a mandatory system of disclosure regulation, bolstered by antifraud provisions while the federal laws do not preempt all state regulation, states cannot lower the regulatory standards applicable to firms covered by the federal regime because its requirements are mandatory they have also been prevented from raising regulatory standards on some occasions. Moreover, in the summer of 2002, Congress passed the Sarbanes-Oxley Act (2) in response to a barrage of corporate governance crises and flagging investor confidence in the securities markets (Song, 2003, 257).The historical background of the Securities legislation in the U.S. (included the proxy rules) can be rooted in 1929. To a more analytical description of the main events related with their establishment, Burk (1992, 23) stated that investment bankers in the 1920 s were driven by a desire to gain influence over others and to make huge fortunes off their influence all of them were not, of course, but sufficiency was to set the tone they took advantage of the mass market for securities, created to sell war bonds during the First World War, by peddling corporate securities of questionable foster at artifically high prices The result was not a permanent prosperity, as some predicted, but a crash, which saw stock prices lose ninety percent of their value over the course of three years, and an economic depression, which lasted for the better part of a decade.