Date of Award

Spring 2005

Document Type

Thesis

Department

Business, Accounting & Economics

First Advisor

Charles Ericksen

Second Advisor

Belle Marie Talbert

Third Advisor

Dennis Wiedmann

Abstract

Since the evolution of the New York Stock Exchange in the eighteenth century, investors have continually traded stocks in an effort to maximize their profits. Some traders have even resorted to unethical and dishonest behavior so as to minimize losses. These illegal actions were expressed in the Securities Act of 1933 and came to be enforced by the Securities and Exchange Commission. An exploration of famous financial fraud cases involving the rules set forth by the Securities Acts may reveal a twofold hidden agenda of the government. First, the government may have aimed at restoring faith and trust in businesspersons by heightening the awareness ofthe crimes committed. The laws passed, such as the Sarbanes-Oxley Act, are aimed at reinstating confidence in Wall Street investors after numerous financial scandals have emerged. Secondly, officials appear to lessen jail sentences and fines of the wealthy and famous, but these criminals inevitably end up being punished by the media and by financial losses resulting from the behavior of their company’s stock. The examination of the Martha Stewart case shows how such an icon can be significantly chastised, even though the time spent in jail was minimal. The research suggests that highly publicized fraud cases will do little to deter others from committing the offenses, since they are often not premeditated.

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