Securities and Exchange Commission or Sec

October 29, 1929 known as Black Tuesday marked the beginning of the Great Depression in the United States of America. “American stock market–which had been roaring steadily upward for almost a decade–crashed, plunging the country into its most severe economic downturn yet.”(History.com Staff, 2009). In 1932 President Roosevelt took office and spent the next eight years implementing programs aimed at restoring Americas markets known as the new deal. One of these programs was the Securities and Exchange Commission or SEC, which was to protect the investors and regulate the securities markets. With the SEC in place investors breathed a sigh of relief and put their faith back in the markets. In time the markets recovered and all was well so to speak.

In 2002 the SEC came under fire by the US Senate and the public for failing to detect the debacle that was Enron, WorldCom, and other companies that filed bankruptcy due to improper financial reporting. In a letter to the SEC chairman from the Senate stated "If the SEC had pressed Enron about those and other troubling disclosures when they first appeared in Enron's 1999 annual report, some of the enormous losses suffered by workers and investors might have been prevented”(Weil & Wilke, 2002). The US markets seen a downturn they had not seen in decades and it was clear that the SEC needed an update. This update came in the form of the Sarbanes-Oxley Act of 2002 otherwise known as SOX.

“The Sarbanes-Oxley Act (SOX) was signed into law in July 2002, with the express purpose of restoring public confidence in corporate financial statements. Prior to the enactment of Sox, investors suffered significant losses due to corporate failures brought on by financial malfeasance.” ("Impact of Sarbanes-Oxley Act," 2008). Sox has held CEO and CFO accountable for their financial reporting, in essences SOX is protecting investors by saying ‘you run the company, you get paid the big bucks, if your investors lose everything so will you’. Since its creation it been accused of being overbearing and a burden on the industry, it has also improved corporate governance