In 2002 the Sarbanes Oxley Act was passed into federal law after the American nation was shocked by scandals that rocked large businesses from Enron, WorldCom, and Adelphia to name a few. These scandals all related to businesses and firms using insider trading to get ahead resulting in the loss of share value to many individual investors and drastically reducing the American's faith in trading and investing in the stock market in general, but most noticeably in the securities market as they were all centered on businesses there. If you remember the Enron scandal in 2002 you will remember the amount of press coverage it received and how many top businessmen ended up in jail.
The Sarbanes Oxley Act, also known as the "Public Company Accounting Reform and Investor Protection Act of 2002" was passed to place more restrictions and institute forced reform on Us companies that were involved in Us bonds that were publicly owned. Sarbanes Oxley Act mainly details how businesses including accounting firms and other bond management firms that act with public shares, will be criminally prosecuted if hedge funding or insider trading is exposed within their organization and places stronger regulations on the way they are able to carry out their business tactics when trading.
However, some people do not agree with the many different sections of the Sarbanes Oxley Act, as some of it they say places too much regulation on firms and trading business in the US and therefore lessens America's stance in the international marketing claiming that the Sarbanes Oxley act went overboard in defining what is permissible and what is not when conducting trade. These opponents claim that the government infringed too much on business rights while trying to protect individual rights and the Sarbanes Oxley act actually hurts the securities market efforts to gain a strong standing in America today as it limits too many activities that are needed to be successful in the international trade market.
Recent stats show that Sarbanes Oxley actually caused many firms to withdraw from public stock trading, which hurts the value of the share market, because they decided that it would be too costly to their businesses to even attempt to comply with the new regulations and standards that Sarbanes Oxley act imposed on them. In this way the Sarbanes Oxley act actually hurt the American public even more as the more businesses step out of trading, the lower the overall stock market.
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