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Repealed
Introduction of Sarbanes Oxley
On March 5th, 2001, Fortune magazine released an article by Bethany McLean. The theme of this article was that Enron’s stocks were overpriced. She stated that Enron’s stocks were really popular and that its numbers were really impressive. Its revenues had doubled to over $100 billion, earnings were increasing by 25% and stocks were returning over 89%. All this seemed a little too much like a fairy tale. She raised questions like ‘Where does Enron get its revenues from?’, ‘Why it was so complicated to get information from Enron?’ and so on. When asked these questions, various Enron executives had different answers; most popular of them was “We do not want to let people know where we make money from.”
We all know what happened to Enron in October of the same year. Many such scandals broke out during the period of 2000-2002, WorldCom, Tyco International, Adelphia, Peregrine Systems were a few to name. These scandals resulted in many investors losing their money, some who had invested their life savings, due to stock price crashes also causing instability in the stock markets. After a series of analysis and discussions, the senate passed a bill call ‘Sarbanes Oxley Act of 2002’.
What areas did the ‘Sarbanes Oxley Act’ cover?
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