The Problem Of Self Regulation

The government formulates various laws to achieve optimum utilization of resources in the public sphere. Sarbanes-Oxley Act is one of the numerous laws drafted to optimize resources utilization in public companies (McNally, 2013). The act seeks to attain maximization utilization of resources by entrenching accountability and transparency in the reporting of financial matters. To this end, this paper explores the effects of Sarbanes-Oxley Act on United States financial market.

Regulations such as the Insider Trading Act, the Dodd-Frank Act, and Sarbanes-Oxley Act of 2002 (SOX) enhance protection and eradicate unethical business practices. Despite the various laws in place to protect individuals, just turn on the news, read the paper, or glance online at the numerous corporate scandals. Enactment of legislation such as SOX and the Dodd-Frank Act endeavored to restore the public’s trust. Do these rules mitigate the risk, or are they burdensome on broker-dealer such as Group Capital? While laws exist to protect consumers, investors, and shareholders, the question remains are they excessive. The sustainability and ramifications of financial regulation receive minimal thought, and the possibility of future crises garners even less consideration. Kaal (2013) indicated a sense of urgency around rule-making, yet it may not allow a full evaluation of the effect on a broker-dealer. Many of these decisions consider the economic, political, and legal costs on society and not the impact on businesses. Regulators need to balance consumer protection without being punitive towards the financial industry. These factors need balance, or they could stifle business

In the previous discussion, I indicated that the Section 16(b) rule of the Securities and Exchange Act of 1934 was intended “to protect the interests of the public against the predatory operations of directors, officers, and principal stockholders of corporations by preventing them from speculating in the stock of the corporations to which they owe a fiduciary duty".

The 2002 Sarbanes-Oxley Act was implemented for the main purpose of protecting investors through enhancing and promoting a real sense of transparency, precision and accountability when it comes to the governance of corporate entities and this was to ensure that the divulgences employed by the corporates are in pursuant to the ordinances of the sureties of the investors and the act also had other functions as well. In brief, the Act was enactment in 2002 was mainly that it helps in restoration of public confidence and integrity to the financial markets as events witnessed by corporates going under with examples like Tyco, Enron, Adelphia and Worldcom (Orin, 2008). It became very crucial for corporates to engage in effective corporate

The stock market is the market where shares of publicly owned companies are issued through exchanges or over-the-counter markets. Some individuals, such as R. Foster Winans, will attempt to cheat the stock market and make profits illegally through insider trading. Insider trading is an illegal activity where people will trade stocks based on confidential information. R. Foster Winans was charged with insider trading because of his knowledge of what would appear in the Wall Street Journal’s, “Heard on the Street Column.” R. Foster Winans got the punishment he deserved for insider trading on the stock market.

Financial markets and government have a problematic relationship. The responsibility to citizens is conflicted between protecting individual consumers, the financial industry, and the economy as a whole. Rules provide protection for all three. Park (2015) argues, the strict requirements publicly traded companies must meet helps ensure the integrity of the market more than the accuracy of stock prices. There is an array of advice on how to oversee the stock market.

Insider dealing has been affecting the efficiency of stock markets in different places like United States, United Kingdom and Australia. Hong Kong is of no exception. Basically, insider dealing refers to the trading of a corporation’s stock or other securities by individual with potential access to non-public information of the company. The law of insider dealing in Hong Kong provides a much more detailed definition and is very comprehensive. However, when it comes to enforcement, it seems not very effective. In the following, the law of insider dealing in Hong Kong will be summarized. After analyzing the comprehensiveness of the law, the underlying reasons of the difficulty in enforcement will be identified. Some

Social control theory suggest that crime occurs when such bonds are weakened or are not well established. Self-control theory argue that without such bonds, crime is an inevitable outcome. Hence, criminality is considered as a possibility for all individuals within society, bypassed only by those who seek to maintain family and social bonds. These bonds are based on attachment to those within and outside of the family, including friends, teachers, and co-workers, commitment to activities which individuals has invested time and energy in, such as educational, being involved in activities that serve to further bond an individual to others and leave limited time to become involved in deviant activities, and belief in wider social values.

By the reason of fact the market abuse caused abusive behavior the financial market has become vulnerable. In this manner today’s financial sector need to mull over new improvements in this sector. For this purpose financial security regulations have been corrected and rebuilt to prevent the market abuse.

When I was younger I didn't know self control and this is something I had to grow out of one.The teachers alway told me that i needed to sit still and having to sit in the office because I was becoming a problem. That's when my mother decided at the age of 9 I would start playing baseball to get all my energy out, but knowing myself I knew that i would be too much to handle.

Criminologists’ have various self-control theories as it relates to the delinquent behavior of juvenile. According to self-control theory, people are not inherently criminal nor are they socialized into crime; rather, people differ in the extent to which they have developed self-control and attend to the controls in their environment, which inhibit crime and delinquency (Gottfredson & Hirschi, 1990). Self-control assumes that learning to behave in a way that is acceptable to society makes a difference in a juvenile. Those with less self-control are more likely to engage in

Crime has existed in societies across the world for centuries, and is defined as any offense harmful against the public. However, the true nature of crime is more complex as there are many different motives and causes behind a criminal act, which cannot be contributed to a single factor (Barlow & Decker, 2010). Within the field of criminology, a number of theories exist that attempt to explain why some individuals commit crime, while others abstain from it. Some theories attribute crime to the specific environment; they believe that an individual commits crime when certain ecological conditions are met (Felson, 2001). Others argue that crime is caused by the individual themselves; that criminals are the result of unrestrained thoughts and low self-control (Gottfredson & Hirschi, 2001). This paper will analyze aspects of a real world scenario using both routine activity theory and low self-control theory, for the purpose of better understanding and evaluating certain criminal behavior.

For example, Manna (1966) states that insider trading should be allowed because insider trading is the most effective way to compensate to insider to generate new economic information in firm. Hirshleifer() states that for insider, good information is as good as bad information to make profit but this profit may not be related to economic contribution of insiders in corporate. Proponents of insider trading suggest (Carlton and Fischel (1983) that insiders are the most informative member in the market, and by trading, they bring new information to the markets and causing prices to change toward their true value and, therefore, promoting the optimal allocation of resources. On the other hand, Scholars (Benabou and Laroqu, 1992) say that insider trading may provide incentive to corporate insiders either to delay the announcement of price-sensitive information to public or to prevent to release price sensitive information, which in turn makes stock prices less informative. However, Georgakopoulos (1993) argues that restriction on insider trading may have little adverse impact on market efficiency but it reduces the cost of transaction that burdens on uninformed traders

Corporate directors and officers often obtain advance inside information because of their positions. Sometimes the information can affect the future market value of the corporate stock. It is obvious that their positions can give them a trading advantage over the general public and shareholders. Often times the insider is the company manager; other times it is the company's lawyer, investment banker, or even the printer of the company's financial statement. Anyone who has knowledge before public dissemination of that information stands to benefit from good news or bad news.

Maturation is especially important for individuals as it provides several competitive evolutionary advantages (Locke & Bogin, 2006). Through this process, individuals develop and acquire control over their emotions and behaviours. This ability to monitor and adapt our emotions, cognition and behaviours in accordance to the social and intellectual demands of particular contexts is often referred to as self-regulation (Demetriou, 2000; Zimmerman, 2000). Various complex cognitive skills are required for self-regulation. These skills encompass the constant observation of our thoughts and behaviours, knowledge of the demands of any situation, the capability to alter conditions of our current behaviour as required to achieve a goal or suit a situation and attention to how favourably the demands of a context are met (Evans & Rosenbaum, 2008).