After the Crash of 1929, Congress passed sweeping legislation to monitor corporate activity with the Securities Acts of 1933 and 1934, which established the Securities and Exchange Commission (SEC) and mandated annual audits by an independent accountant, such as a CPA or accounting firm. Similarly, while Congress enacted Sarbanes Oxley Act in 2002 to decrease the risk of fraudulent financial reporting and ethical failures to stakeholders, we still experienced the likes of the recent Bernard Madoff case where billions of investor's funds were mishandled.
It seems that although we respond to major outbreaks in fraud and unethical behavior, these actions still occur, causing detrimental damage to the American public and our global economy.
In the coming months, we'll revisit the chilling day when Enron announced its bankruptcy on Dec. 3 2001. With 10 years having gone by, our country still faces the same underlying ethical issues that occurred and led to the company's demise.
The Enron scandal left communities from Nepal to Orange County stranded without power plants that were set to be constructed or upgraded. Employees found themselves without jobs -- many losing 30 years of a pension, forced to find menial positions without benefits -- and communities that relied on companies such as WorldCom, were devastated. These unethical actions halted the progress of productive societies and demonstrated how the greed of a few could harm the lives of many.
Some of our country's major cases -- from the Wall Street crash of 1929 to the savings and loan scandal in the 1980s to Enron -- led to landmark legislation and significant advances in business management. So, why are we still dealing with these issues after so much regulatory activity has occurred?