Wall Street/Nyse – Fraud – Regulatory Acts
WALL STREET/NYSE – FRAUD – REGULATORY ACTS
PAST AND PRESENT
RESEARCH PAPER
AUDITING
BUS 469
November 22, 2006
[pic]
WALL STREET/NYSE – FRAUD – REGULATORY ACTS
PAST AND PRESENT
I am starting this paper with a short history of The Stock Exchange in America, Wall Street, and the New York Stock Exchange. This will lead into the corruption that occurred before the 1929 stock market crash and the depression. I will then touch on the result of that corruption and the regulatory acts that followed. From there I will move to the present times and the regulatory act that was a result of our modern day corruption. By looking at both of these spots in history I am hoping to find similarities of the two eras and bring those out in my conclusion. America’s first stock exchange was founded in Philadelphia in 1790. In New York City, March of 1792, 24 leading merchants meant secretly to come up with a way to weasel away the securities exchange business that was then dominated by the auctioneers. These same merchants signed a document on May 17, 1792 called the Buttonwood Agreement. This was the birth of the New York Stock Exchange. The agreement was thus named because of their meeting place at the foot of Wall Street under the Buttonwood Tree. Our history will now take us to the ‘Gilded Age’ 1865-1901. During this period the world saw unprecedented economic growth; territorial, industrial, and population expansion. In 1871 Mark Twain said in one of his many famous speeches, “What is the chief end of man?—to get rich. In what way?—dishonestly if we can; honestly if we must.”[1] Not only did wealth grow during this period but also corruption. There were the filthy rich and the dirt poor with nothing in between. Through the early 1900’s Wall Street continued to grow leaps and bonds. The first wave of panic was in 1907 when Knickerbockers Trust Company closed its doors. JP Morgan slipped in and persuaded leading NW bankers to set
PAST AND PRESENT
RESEARCH PAPER
AUDITING
BUS 469
November 22, 2006
[pic]
WALL STREET/NYSE – FRAUD – REGULATORY ACTS
PAST AND PRESENT
I am starting this paper with a short history of The Stock Exchange in America, Wall Street, and the New York Stock Exchange. This will lead into the corruption that occurred before the 1929 stock market crash and the depression. I will then touch on the result of that corruption and the regulatory acts that followed. From there I will move to the present times and the regulatory act that was a result of our modern day corruption. By looking at both of these spots in history I am hoping to find similarities of the two eras and bring those out in my conclusion. America’s first stock exchange was founded in Philadelphia in 1790. In New York City, March of 1792, 24 leading merchants meant secretly to come up with a way to weasel away the securities exchange business that was then dominated by the auctioneers. These same merchants signed a document on May 17, 1792 called the Buttonwood Agreement. This was the birth of the New York Stock Exchange. The agreement was thus named because of their meeting place at the foot of Wall Street under the Buttonwood Tree. Our history will now take us to the ‘Gilded Age’ 1865-1901. During this period the world saw unprecedented economic growth; territorial, industrial, and population expansion. In 1871 Mark Twain said in one of his many famous speeches, “What is the chief end of man?—to get rich. In what way?—dishonestly if we can; honestly if we must.”[1] Not only did wealth grow during this period but also corruption. There were the filthy rich and the dirt poor with nothing in between. Through the early 1900’s Wall Street continued to grow leaps and bonds. The first wave of panic was in 1907 when Knickerbockers Trust Company closed its doors. JP Morgan slipped in and persuaded leading NW bankers to set
References: Textbook Boynton, Johnson, 8th Edition, 2006, Modern Auditing, pages 155-167 Internet Resources No Author, The History of the Stock Market, Retrieved November 19, 2006 from the World Wide Web: www.hermes-press.com/wshist1.htm http://auburn.edu/~garriro/c5fedres.htm No Author, SIFMA, SIA Primer on Securities-Securities Act of 1933, On Capitol Hill, Retrieved November 19, 2006 from the World Wide Web: http://sia.com/capitol_hill/html/securities_act_of_1933.html Gould, William D & Coleman, Thomas Henry, Business Law1-Corporate Scandals Brought Strict New Laws, Retrieved December 2, 2006 from the World Wide Web: http://www.ceb.com/newsletterv4/business_law1.htm Faulk, Mark, The Circle of Greed: The Cloak of Invisibility, Retrieved December 2, 2006 from the World Wide Web:http:wwwfaulkingtruth.com/Articles/Investing101/1057.html -----------------------