Thus an attorney’s persuasion of withholding of documents under a valid document retention policy cannot be defined as a dishonest practice. So corrupt is not appropriate applied to the actions of Andersen. I believe Andersen violated the law. The management, including David Duncan, obviously knew Andersen would get an investigation due to the audit fai... ... middle of paper ... ...n 2002, Enron has burdened huge debts and filed for bankruptcy protection. Andersen also had no money to pay for angry investors.
But this time would be different. Henry Paulson stepped in to let Lehman Brothers know there would be no bailout for them. Someone had to fail to set an example for the rest of the banking industry and Lehman Brothers would be that someone. In Paulson’s view Lehman Brothers was guilty of moral hazardous decisions and would not be paid for mistakes made. I find it interesting that Richard Fuld the CEO at Lehman Brothers at this time was Paulson’s chief competitor before becoming Treasury Secretary.
With this being said, this brings into question about who is actually to assume blame for this financial fiasco. It is extremely hard to just assign blame to one individual party as there were many different factors at work here. This paper will analyze how the stakeholders created a financial disaster and did nothing to prevent it as the credit rating agencies created an amount of turmoil due to their unethical decisions and costly mistakes. II. Assessing the Housing Crisis In terms of looking at how credit rating agencies affected the market as a whole, they played a role within the mortgage crisis as they gave way to a real estate credit bubble.
It was clear that this assumption regarding their strong endurance proved wrong when scandals and frauds came on board such as the one in Banco Santander. Banco Santander has faced over the past years several accusations by the Fed and Spanish National Securities Market Commission, facing multiple sanctions and legal disputes resulting in economic crisis and chaotic circumstances that nurtures an ongrowing stain at the bank’s reputation. Such offence has no political color or social class, meaning it has nothing to do with any political or social acquaintances regarding the case presented. It was only permissible nuances that are provided by the Spanish Penal code itself. However in view of how the law of grace is exercised ,may not be idle to know something more about this legal record, if only for what may come.
The responsibility also falls in the hands of the accounting firms that audit the companies. The accounting world did not prepare for the amount of fraud that was occurring in the early 2000s that changed the accounting world forever. The accounting firms that audit the companies have a responsibility to keep independence and to detect if there are any fraud or misstatements occurring within the accounting departments. Independence means that the auditor must have no direct connection to the company or the company’s main officers. The auditor will not have independence if the auditor owns stock of the company or has a family member, such as their Dad, as the CEO of the company.
Due to that the charges the firm was to undergo were unfounded and Goldman fought to defend its reputation. Civil charges against Goldman and Fabrice Tourre which was one of Goldman’s star traders marked one of the major attacks that the government made on Wall Street. According to Roben & Paula (2010) the deals that the company had made are believed to have caused the financial crisis that was experienced by the nation as well as the whole world. Regulators claim that Paulson’s firm was allowed by Goldman to assist in designing a Collateral Debt Obligation (CDO) financial investment which was built from specific sets of mortgage assets that were risky hence essentially set CDO to failure. While all that was happening CDO investors were not told anything about the role of Paulson nor were they told about his intentions.
These sections forbid deposit-taking institutions from engaging in the issuing, underwriting, selling, or distributing of securities. Since the provisions of the Glass-Steagall Act did not apply to foreign banks operating in the United States, they could engage in insurance and securities activities. This put the American banks at a disadvantage. As a result of the pressure on the legislature and the constant talks of overturning the act, it was finally repealed. On November 12, 1999, President Clinton signed the Gramm-Leach-Bliley Financial Services Modernization Act, which repealed the Glass-Steagall Act.
The 2008 financial crisis left much of the United States’ economy in shambles and the debate still continues as to what in particular led to the collapse. In reality, it was a combination of all the factors mentioned above that contributed to the economic meltdown of 2008. To prevent it again would require greater regulation and a decrease in liberal economic policies. However, that is easier to say than to practice in an era dominated by liberal policies. Another financial crisis will occur; however, it will depend on US policymakers and other actors in the financial and economic sectors to determine the extremity of the crisis.
So this law was established to remove excuses from CEOs and CFOs like “I wasn’t aware of financial issues” (SOX-online). In 2000 to 2002 many investors lost billions of dollars because there was no legal act that protected their investments in companies. This act specifically became enacted on July 30th 2002 “to protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws, and for other purposes” (SOX-Online) like recovering the nations trust. On the Sarbanes- Oxley Act 2002 website it explains when the Act was enacted, specific sections of the law, the rules of compliance and the sponsors of the law. This website had brief details but it had the necessary key aspects.
World economy suffered a great loss. The crisis raises public awareness of financialization. People started to find out the major reason of the crisis and deal with it. In definition of Jim, killing bankers of Wall Street can solve the problem. However, is banker a major factor for financial crisis?