Changes in regulation often are more of a benefit to corporations than they are to customers and it has been that way for many years. Corporate deregulation has changed over and over because different Presidents in office. Because of this, some laws have been altered or eliminated so that deregulation could override government regulation.
Deregulation relaxes laws so that the industry can self-regulate on the principle that it should be allowed to without government support or sanction. The devastation of Enron, WorldCom and the sub-prime market caused the passing of the Sarbanes-Oxley Act by Congress.
The legal issue in this article shows legal business problems due to the deregulation of mistakes that have transpired. These legal business issues include bankruptcy, fraud, lawsuits and ethical issues.
Legal issues such as those listed can and does feasibly damage consumer, employee and shareholder relations with the company. This can also prevent suppliers from providing the company services and goods because the status and perceived character the company will have because of these issues. Proceeds hurt from this type of harm to these delicate associations and causes harm the integrity of the business.
The Sarbanes-Oxley Act (SOA) of 2002 places very severe consequences for violating any of its provisions. “For example, officers who certify required financial report filing knowing that the report is either inaccurate or knowing that the report was not subject to required controls before the certification are subject to criminal penalties of up to $1 million in fines and 10 years of incarceration.
For cases in which the certification was used as part of a larger fraudulent scheme, the penalties increase to $5 million in fines and 20 years of incarceration” (Melvin, 2011).
Some of the laws that were in created to help guard against legal issues like these listed in the article were removed to tolerate deregulation and self-governance. During President Clinton’s administration, Congress revoked a Depression-era law called Glass-Steagall.
This law kept banking and investment distinct and detached, allowing banks to offer investment advice as well as loans – “one-stop shopping on the road to disaster” (Meyerhoff, 2008, para. 1). These allowances by our administration representatives have been confirmed to be tremendously expensive errors over and over again while impacting the whole economy.