Corruption in Corporate America

Modern capitalism and political freedom rest on concepts of conscience and morality, and abhor concentrations of unbridled power. America's economic and political system has developed mechanisms designed to check and balance such power. Despite these mechanisms, corporate America has produced imperious chief executives, who, possessing such power, abuse it by engaging in a fraudulent and self-serving pursuit of wealth and the trappings of authority. How did it happen? How did the system respond? What can be done to minimize the danger of its reoccurrence?

Corruption in Corporate America seeks to answer these questions, first, by realizing that, to be able to misbehave, chief executives must achieve the support or silence of their boards of directors as well as the gatekeepers who presumably guard the integrity of corporate accounts (i.e. auditors, legal advisers, financial analysts, investment bankers, and regulatory bodies), and second, by analyzing how each of those participants becomes involved in corporate fraud. The analysis is completed by a look ahead at the prospective results of the Sarbanes-Oxley Act of 2002, the law enacted as the corrective response to corporate corruption.

Hopefully, the insights gained by this analysis will contribute to a revived confidence in the integrity of corporate accounts, and thereby sustain the vitality of America's capital markets, which are vital to our future economic well-being.