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Easing up on corporate crime

Filed in archive corporate crime by leon on December 16, 2007

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Earlier this year, I did a blog entry explaining that the fight against corporate wrongdoing always eases up when there is a stock market bubble.

The Economist confirms that argument in the piece Going easy on corporate crime. It says there are several reasons why the pendulumlinks has swung back since Sarbanes-Oxley was introduced post-Enron. First, there's been the rise in the Dow Jones which has dulled some of the anger towards corporations. Second, Sarbanes-Oxley has reassured the public that corporations are behaving better. Also, regulators are under growing pressure to take a lighter approach. Another reason is the US government's pursuit of trial lawyers Bill Lerach and Melvyn Weiss and the drop in class action lawsuits. Finally, the US Supreme Court is limiting the exposure of companies to securities lawsuits.

All this is interesting in the light of the subprime mortgage meltdown. Will the crisis see the pendulum swinging back? Probably not, at this stage. Unfortunately, that might require an even bigger crisis.






Permalink: Easing up on corporate crime
Tags: corporate  crime  pendulum  SarbanesOxley  2007  corporate+crime  easing+corporate  sarbanes+oxley 

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