Wall Street and the Sarbanes-Oxley Act

INTRODUCTION

The Sarbanes-Oxley Act was overwhelmingly passed by Congress and signed by President Bush following the last big round of corporate scandals involving Enron, Tyco, and WorldCom. It was supposed to restore confidence in the corporations and financial markets in the United States. The Sarbanes-Oxley Act, which includes criminal provisions, imposed strict rules for corporate governance, requiring chief executive officers and chief financial officers to certify under oath that their financial statements are accurate and that they have established an effective set of internal controls to ensure that all relevant information reaches investors. Knowingly signing a false statement is a criminal offense punishable with up to 5 years in prison (DOJ, 2014).

It has been 8 years since the financial crisis crippled the U.S. economy, and much to the dismay of the general public and the Wall Street protesters, there has not been a single prosecution of a high-ranking Wall Street executive or a major financial firm, even though fraud and financial misrepresentations played a significant role in the meltdown. Hundreds of thousands of Americans lost their homes and jobs and the country suffered the greatest recession since the Great Depression, and no one seemed responsible. The question has to be asked, who is guarding the guardians?

The Sarbanes-Oxley Act was designed to prevent future occurrences of and aid in the prosecution of the kind of activity that Wall Street engaged in prior to the economic breakdown. All the DOJ has done is fine the banks, which is merely a cost of their doing business along with the SEC. Enron taught us a great deal on how to approach criminal investigations of this type and magnitude.

Consider what you have learned through your readings regarding Enron and the case study analysis you performed for this unit’s assignment. In light of the Enron case, the Sarbanes-Oxley Act was enacted to go after those who would knowingly and willingly lie to investors for personal financial gain and to put integrity back into our financial markets. However, the financial crisis of 2008 once again swept the country into the depths of despair and distrust of its guardians and of corporate America, as banks too big to fail did fail and Wall Street knowingly packaged and sold toxic mortgage loans that brought the U.S. and world economies to the brink of collapse

INSTRUCTIONS

For this discussion, assume you are a special agent with the FBI who has worked on the Enron case. You have now been assigned by your agency to take the lead on the newly formed Wall Street Financial Crimes Task Force to look into possible allegations of criminal wrongdoing by Wall Street executives.

In preparation for your initial meeting with task force members, consider the statutory aspects of the case, size of the case, the evidentiary aspects of the case, potential defendants, and the number of victims.

Address the following in your main post:

Propose various types of evidence gathering techniques that could be deployed by specific members of the task force.
Determine unique challenges throughout the investigatory and prosecutorial process that a multiagency approach to combat white collar crime of this nature will present.
Assess whether the Sarbanes-Oxley Act has enhanced the integrity of the financial markets and the quality of financial reporting.
Debate whether the DOJ has a double standard for the rule of lawâ€”one of exoneration and impunity for the elite financial and political managerial class and another for those U.S. citizens who challenge the status quo.

12 hours ago