Chapter 1
Regulating Securities
IN THIS CHAPTER
Summarizing 70 years of securities law
Figuring out which companies must comply with SOX
Complying with enhanced reporting requirements under SOX
The Sarbanes-Oxley Act (SOX), which passed in 2002, is the most far-reaching attempt to protect investors since Franklin Delano Roosevelt’s Securities Act of 1933 and 1934 following the Great Depression. Like the New Deal securities laws of the 1930s, SOX comes on the heels of high-profile scandals at large corporations that caused significant harm to investors. It signals a new era in the relationship among business, government, and the investing public.
The U.S. Securities and Exchange Commission (SEC) is in charge of administering these broad pieces of legislation. It administers this legislation by passing specific rules for companies, audit firms, and stock exchanges to follow. The SEC has issued many comprehensive rules that provide much of the guidance that companies need.
In this chapter, we point out the rules and give you an overview of securities law and it’s important historical context. Understanding the objectives of securities law and how it serves those objectives can help ...
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