With the development of the Internet in the last twenty years, the nature and manner in which financial transactions are carried out has undergone a sea change. In its early days, the Internet was used solely for purposes of communication. But in recent years the role and scope of the Internet has assumed new dimensions with the introduction of commercial transactions. What has come to be called e-commerce has its origins in the dotcom boom of the late 1990s. But it is only after the inevitable dotcom bust in the early years of the millennium that e-commerce established itself as a viable and dependable method of conducting business. Technological innovation in terms of developing security software aided this process and so did the process of globalization. As a culmination of these parallel but complementary processes, e-commerce in general and electronic financial transactions in particular has firmly taken root in mainstream global economy. While this kind of progress in such a . . . Read MoreContinue Reading
The investment scandal perpetrated by Bernard Madoff is the largest financial fraud in the history of capitalism. It is believed that Madoff’s secretive investment advice firm caused a loss of nearly $65 billions for the 4,000 odd investors who trusted his firm with their wealth. The investors consisted of several celebrities as well as people from middle and lower classes, thereby making the loss more acute for the latter group. This essay will explore the relevance of the Sarbanes-Oxley Act of 2002 to the Madoff Scandal.
The Securities and Exchange Commission (SEC), which is an agency of the Federal government that is entrusted with the task of regulating the financial markets is one of the chief culprits behind this failure. The SEC had brushed aside several warning signals in the years leading up to 2008, either due to the incompetency of their auditing staff or due to collusion with the fraudsters. Ever since Madoff started his ponzi investment scheme two decades . . . Read MoreContinue Reading