Regulation in our nation today – too much or not enough? That is the question this paper addresses. The Securities Acts of 1933 and 1934, the Foreign Corrupt Practices Act of 1977, along with the Sarbanes Oxley Act will be highlighted and discussed. The Securities Act of 1933 was the first major piece of federal legislation regarding the sale of securities. Prior to this legislation, the sale of securities was primarily governed by state laws; however, the market crash of 1929 raised some serious questions about the effectiveness of how the markets were being governed. Because of the turmoil surrounding the investing community at this time, the federal government had to bring back stability and investor confidence in the overall system.

In general, the legislation was enacted as the need for more information within and about the securities markets was acknowledged. The legislation addressed the need for better disclosure by requiring companies to register with the Securities and Exchange Commission. Registration ensures companies provide the SEC and potential investors with all relevant information by means of the prospectus and registration statement. Under this act, the seller of a security is liable for making any material misstatement or omission, either oral or written, in connection with the offer or sale of a security.

The Securities Act of 1934 was enacted to ensure investors received ongoing information about public companies with publicly traded stock. Under this act, an issuer must register with the SEC if 1) it completes a public offering under the 1933 Act, or 2) its securities are traded on a national exchange, or 3) it has at least 500 shareholders and total assets exceeding $10 million. Public companies under this act must file annual reports on Form 10-K, quarterly reports on Form 10-Q, and Form 8-K.

The Securities and Exchange Commission announced in April of 2014 fraud charges against a Honolulu woman posing as an investment banker and soliciting investors through Twitter, Facebook, and other social media. The SEC investigation found that Keoko Kawamura engage in two separate fraudulent schemes to raise money from investors while presenting herself as an

investment and hedge fund expert. She actually had virtually no prior trading experience. The administrative proceedings will determine if Kawamura must pay any remedial damages.

The SEC also announced fraud charges against a New York-based investment advisory firm and two executives for distributing falsified performance results to prospective investors in two hedge funds they managed. In response to the SEC’s request for emergency relief for investors, a US District Court Judge issued a temporary restraining order, imposed an asset freeze to protect client assets, and temporarily prohibited the defendants from soliciting new investors or additional investments from existing investors.

Congress passed the Sherman Act in 1890 to prevent extreme concentrations of economic power. Because this statute was aimed at the Standard Oil Trust, which then controlled the oil industry throughout the country, it was termed antitrust legislation. Both the Justice Department and the Federal Trade Commission have authority to enforce the antitrust laws. In addition to the government, anyone injured by an antitrust US Regulation Today Page 5 violation has the right to sue for damages. In most other countries only the government is able to sue antitrust violators. However, a successful plaintiff in the United States can recover triple damages from the defendant.

The Clayton Act prohibits mergers that are anticompetitive. Companies with substantial assets must notify the Federal Trade Commission before undertaking a merger. This notification gives the government an opportunity to prevent a merger ahead of time rather than trying to untangle one after the fact.

Congress passed the Robinson-Patman Act in 1936 to prevent large chains from driving small, local stores out of business. Under this act it is illegal to charge different prices to different purchasers if the items are the same and the price discrimination lessens competition. It is legal to charge a different price to a particular buyer if the costs of serving this buyer are lower or the seller is simply meeting competition.

[The Foreign Corrupt Practices Act (FCPA), enacted in 1977, generally prohibits the gift of bribes (anything of value) to foreign officials to assist in obtaining or retaining business. The FCPA can apply to prohibited conduct anywhere in the world and extends to publicly traded companies and their officers, directors, employees, stockholders, and agents. Agents can include third party agents, consultants, distributors, joint-venture partners, and others. The FCPA permits finds of $100,000 for individuals and $1 million for corporations as well as prison sentences of up to five years.

The FCPA also requires issuers to maintain accurate books and records and have a system of internal controls sufficient to, among other things, provide reasonable assurances that transactions are executed and assets are accessed and accounted for in accordance with management's authorization.
In April of 2014, the Securities and Exchange Commission charged HP with violating the Foreign Corrupt Practices Act when its subsidiaries in three different countries made improper payments to government officials to obtain or retain lucrative public US contracts. HP agreed to pay more than $108 million to settle the charges and a parallel criminal case.
The Sarbanes-Oxley Act came into force in July 2002 and introduced major changes to the regulation of corporate governance and financial practice. It is named after Senator Paul Sarbanes and Representative Michael Oxley, who were its main architects, and it set a number of non-negotiable deadlines for compliance.

The Sarbanes-Oxley Act(SOX)came about in the wake of accounting scandals at Enron, WorldCom, Tyco, Adelphia, and other public companies and was intended to prevent exactly the kind of cover-up Wal-Mart allegedly engaged in. The law imposed gatekeeper duties on corporate lawyers, who are supposed to report material violations of the securities laws up the chain of command, all the way to the audit committee of the board, if necessary. SOX also requires corporations and their auditors to report on the company's internal controls for financial reporting -- and requires that CEOs and CFOs certify the information in the quarterly and annual reports to be true, the company has effective internal controls, and officers have informed the company’s audit committee and auditors of any concerns regarding the internal control system. According to securities-law experts, Wal-Mart may have run afoul of all of these provisions.

SOX prohibits accounting firms that audit public companies from providing consulting services to their audit clients on topics such as bookkeeping, financial information systems, human resources, and legal issues. SOX rules apply only in the United States.