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

Management and Control of Corporation - Essay Example Moreover, Romano (1998, 2359) states that although ‘both the states and the federal government regulate securities transactions, the current regulatory 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 publicly 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). Â  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 enough 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 value 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’. Â