Preface |
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xi | |
Acknowledgments |
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xiii | |
Introduction |
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xv | |
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Photographs follow page 302 |
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I The Stock Market Bubble and Enron |
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1 The Stock Market Bubble |
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3 | (46) |
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3 | (1) |
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3 | (1) |
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4 | (1) |
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5 | (2) |
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7 | (1) |
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Collateralized Debt Obligations |
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8 | (1) |
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9 | (2) |
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Commodities Futures Modernization |
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11 | (2) |
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13 | (2) |
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Electronic Communications Networks |
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15 | (2) |
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17 | (3) |
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20 | (1) |
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21 | (1) |
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21 | (2) |
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23 | (2) |
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25 | (2) |
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27 | (2) |
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29 | (1) |
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30 | (3) |
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33 | (1) |
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34 | (1) |
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34 | (1) |
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35 | (2) |
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37 | (1) |
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37 | (2) |
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39 | (1) |
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Deficits and International Problems |
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40 | (2) |
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42 | (1) |
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42 | (2) |
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44 | (2) |
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46 | (3) |
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49 | (46) |
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49 | (1) |
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49 | (1) |
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50 | (1) |
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51 | (1) |
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52 | (1) |
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53 | (1) |
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54 | (1) |
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54 | (1) |
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55 | (2) |
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57 | (2) |
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59 | (1) |
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59 | (1) |
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60 | (1) |
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61 | (1) |
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61 | (1) |
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62 | (1) |
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63 | (2) |
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65 | (1) |
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65 | (1) |
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66 | (1) |
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67 | (1) |
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68 | (2) |
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70 | (1) |
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Securitizing the Balance Sheet |
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70 | (2) |
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72 | (3) |
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75 | (1) |
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75 | (1) |
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75 | (1) |
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76 | (2) |
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78 | (1) |
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79 | (1) |
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80 | (2) |
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82 | (1) |
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83 | (1) |
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84 | (1) |
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85 | (2) |
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87 | (1) |
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87 | (1) |
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88 | (3) |
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91 | (2) |
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93 | (2) |
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95 | (48) |
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95 | (1) |
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95 | (1) |
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96 | (2) |
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Nikita, Backbone, and Others |
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98 | (1) |
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99 | (1) |
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Business Model and Disclosure |
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99 | (2) |
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Executive Bonuses and Stock Sales |
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101 | (1) |
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102 | (2) |
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104 | (2) |
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106 | (2) |
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Prosecution of Enron Executives |
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108 | (1) |
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108 | (1) |
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109 | (3) |
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112 | (1) |
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112 | (2) |
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114 | (1) |
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115 | (3) |
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118 | (1) |
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119 | (1) |
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Prepaid Forward Transactions |
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119 | (1) |
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120 | (2) |
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122 | (1) |
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123 | (2) |
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Liability of Financial Institutions |
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125 | (1) |
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126 | (1) |
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127 | (2) |
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California Trading Scandals |
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129 | (1) |
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129 | (2) |
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131 | (2) |
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133 | (3) |
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Crimes and Investigations |
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136 | (1) |
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137 | (6) |
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II Full Disclosure and the Accountants |
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143 | (54) |
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Full Disclosure Background |
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143 | (1) |
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143 | (3) |
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146 | (1) |
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146 | (1) |
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147 | (1) |
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The Stock Market Crash of 1929 |
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148 | (1) |
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149 | (2) |
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Laying the Groundwork for Full Disclosure |
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151 | (2) |
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The Securities Act of 1933 |
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153 | (3) |
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The Securities Exchange Act of 1934 |
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156 | (2) |
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The Accountants as Gatekeepers |
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158 | (1) |
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158 | (2) |
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160 | (1) |
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161 | (1) |
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161 | (2) |
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Accounting in Great Britain |
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163 | (2) |
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British Accountants Move to America |
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165 | (1) |
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166 | (2) |
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168 | (1) |
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169 | (1) |
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170 | (3) |
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Accounting Problems Spread |
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173 | (1) |
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174 | (1) |
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Accounting Reform Efforts |
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175 | (1) |
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175 | (2) |
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177 | (1) |
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178 | (2) |
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Financial Scandals Embroil the Accountants |
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180 | (2) |
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182 | (3) |
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185 | (1) |
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186 | (3) |
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The Independence Controversy |
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189 | (3) |
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192 | (2) |
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194 | (1) |
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195 | (2) |
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5 Arthur Andersen and Other Scandals |
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197 | (49) |
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197 | (1) |
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197 | (1) |
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197 | (2) |
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199 | (5) |
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Andersen's Problems Mount |
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201 | (3) |
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204 | (1) |
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205 | (1) |
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The Indictment of Arthur Andersen |
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206 | (1) |
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The Trial of Arthur Andersen |
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207 | (3) |
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210 | (2) |
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212 | (1) |
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212 | (1) |
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Accrual Versus Cash Accounting |
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213 | (3) |
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216 | (1) |
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217 | (1) |
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218 | (2) |
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220 | (1) |
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221 | (1) |
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221 | (1) |
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222 | (1) |
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223 | (1) |
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224 | (5) |
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229 | (2) |
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231 | (3) |
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234 | (1) |
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235 | (1) |
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235 | (1) |
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235 | (1) |
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236 | (1) |
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237 | (1) |
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238 | (1) |
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239 | (1) |
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240 | (1) |
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241 | (1) |
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242 | (2) |
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244 | (2) |
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6 Fiduciary Duties and Corporate Governance Principles |
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246 | (65) |
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246 | (1) |
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246 | (2) |
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Early Corporate Governance Concerns |
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248 | (1) |
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249 | (2) |
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General Incorporation Laws |
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251 | (2) |
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253 | (1) |
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Delaware and the Model Business Act |
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254 | (2) |
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256 | (1) |
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257 | (5) |
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262 | (2) |
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264 | (1) |
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Shareholder Responsibilities |
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265 | (1) |
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266 | (1) |
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267 | (3) |
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270 | (1) |
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271 | (2) |
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273 | (4) |
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277 | (1) |
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277 | (1) |
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The Business Judgment Rule |
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278 | (2) |
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280 | (1) |
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281 | (4) |
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The Fiduciary Duty of Loyalty |
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285 | (3) |
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288 | (1) |
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289 | (3) |
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292 | (1) |
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293 | (1) |
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Fiduciary Duties of Controlling Shareholders |
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293 | (1) |
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294 | (2) |
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296 | (3) |
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299 | (2) |
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301 | (1) |
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For Whom Does Management Manage? |
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302 | (3) |
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305 | (1) |
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306 | (5) |
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III Full Disclosure Fails |
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311 | (66) |
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311 | (1) |
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312 | (2) |
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314 | (2) |
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316 | (3) |
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319 | (1) |
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320 | (1) |
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321 | (2) |
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323 | (1) |
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324 | (1) |
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324 | (1) |
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325 | (2) |
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327 | (1) |
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328 | (2) |
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330 | (1) |
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330 | (2) |
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332 | (1) |
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333 | (1) |
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334 | (1) |
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335 | (1) |
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335 | (3) |
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338 | (3) |
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341 | (1) |
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341 | (3) |
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344 | (4) |
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348 | (1) |
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Criminal and Other Charges |
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348 | (3) |
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351 | (3) |
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354 | (1) |
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Accounting Problems in the Entertainment Industry and Elsewhere |
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354 | (1) |
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354 | (1) |
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355 | (1) |
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356 | (1) |
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Accounting Problems Expand |
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357 | (1) |
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358 | (1) |
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359 | (1) |
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360 | (4) |
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Freddie Mac and Fannie Mae |
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364 | (4) |
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368 | (4) |
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372 | (5) |
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8 Analysts and Insider Trading Scandals |
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377 | (66) |
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377 | (1) |
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History of Insider Trading |
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377 | (1) |
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378 | (2) |
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The Supreme Court Responds |
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380 | (1) |
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381 | (1) |
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382 | (3) |
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Insider Trading Legislation |
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385 | (1) |
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More Insider Trading Issues |
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386 | (1) |
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Insider Trading Continues |
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387 | (2) |
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389 | (2) |
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391 | (2) |
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393 | (1) |
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The Stewart Circus Begins |
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394 | (1) |
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395 | (3) |
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398 | (2) |
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400 | (1) |
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400 | (1) |
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401 | (1) |
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402 | (1) |
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403 | (2) |
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405 | (1) |
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406 | (1) |
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407 | (3) |
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410 | (2) |
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412 | (4) |
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416 | (4) |
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420 | (1) |
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421 | (1) |
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421 | (1) |
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Investment Company Act of 1940 |
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422 | (1) |
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423 | (1) |
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423 | (1) |
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424 | (1) |
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425 | (1) |
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426 | (1) |
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427 | (3) |
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430 | (2) |
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432 | (2) |
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434 | (3) |
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437 | (1) |
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438 | (1) |
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439 | (4) |
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9 More Scandals and Reform |
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443 | (78) |
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443 | (1) |
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443 | (1) |
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444 | (3) |
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447 | (2) |
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Sarbanes-Oxley Is Enacted |
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449 | (2) |
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451 | (4) |
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455 | (2) |
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Attack of the Law Professors |
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457 | (1) |
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458 | (1) |
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459 | (1) |
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460 | (1) |
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461 | (1) |
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Role of the Rating Agency |
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462 | (1) |
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463 | (1) |
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Expansion of the Rating Agency's Role |
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464 | (3) |
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Sarbanes-Oxley Is No Panacea |
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467 | (1) |
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467 | (2) |
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469 | (1) |
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470 | (2) |
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472 | (5) |
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477 | (2) |
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479 | (3) |
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482 | (2) |
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484 | (1) |
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484 | (3) |
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487 | (3) |
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490 | (4) |
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494 | (4) |
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Scandal at the New York Stock Exchange |
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498 | (1) |
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498 | (3) |
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501 | (5) |
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506 | (15) |
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521 | (75) |
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521 | (1) |
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Demographic Changes and Finance |
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521 | (2) |
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523 | (2) |
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525 | (2) |
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527 | (1) |
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528 | (1) |
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529 | (1) |
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529 | (3) |
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532 | (1) |
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533 | (3) |
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536 | (1) |
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536 | (2) |
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538 | (4) |
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542 | (1) |
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543 | (1) |
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544 | (2) |
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Housing Market and Millionaires |
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546 | (1) |
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547 | (2) |
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549 | (2) |
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551 | (1) |
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551 | (1) |
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552 | (4) |
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556 | (1) |
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557 | (1) |
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558 | (1) |
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558 | (2) |
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560 | (1) |
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561 | (1) |
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562 | (1) |
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563 | (1) |
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564 | (1) |
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565 | (8) |
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573 | (2) |
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Full Disclosure Continues to Fail |
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575 | (2) |
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577 | (5) |
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582 | (4) |
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586 | (4) |
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590 | (6) |
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596 | (65) |
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The Myths of Full Disclosure |
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596 | (1) |
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596 | (1) |
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597 | (1) |
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598 | (2) |
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Accountants as Bloodhounds |
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600 | (2) |
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602 | (1) |
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Accountants Work for Management |
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603 | (1) |
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604 | (2) |
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Pre-Full Disclosure Finance |
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606 | (1) |
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606 | (3) |
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609 | (1) |
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610 | (2) |
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612 | (1) |
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612 | (1) |
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613 | (3) |
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616 | (1) |
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617 | (4) |
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Accounting Scandals New and Old |
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621 | (2) |
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623 | (6) |
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Attorney General Wolf Packs |
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629 | (4) |
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Private Securities Litigation |
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633 | (3) |
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636 | (2) |
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Pension Funds as Managers |
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638 | (6) |
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644 | (3) |
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Repealing the Federal Securities Laws |
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647 | (1) |
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647 | (4) |
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651 | (1) |
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652 | (1) |
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653 | (1) |
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654 | (1) |
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Disclosure in a Free Market |
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655 | (3) |
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658 | (1) |
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658 | (1) |
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Labeling versus Full Disclosure |
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659 | (2) |
Conclusion |
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661 | (4) |
Notes |
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665 | (12) |
Selected Bibliography |
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677 | (16) |
Name Index |
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693 | (40) |
Subject Index |
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733 | (10) |
About the Author |
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743 | |