The recent $1.4bn settlement between Wall Street's top investment houses and the US Securities and Exchange Commission (SEC) epitomizes the distorted incentives and regulatory failures that underlay the string of spectacular corporate failures seen in America in recent years. The admission that securities analysts deliberately skewed their research to attract investment-banking customers shows how easily the proper functioning of checks and balances in corporate governance can break down-even in the most advanced system-leaving minority shareholders at risk.
The recent $1.4bn settlement between Wall Street's top investment houses and the US Securities and Exchange Commission (SEC) epitomizes the distorted incentives and regulatory failures that underlay the string of spectacular corporate failures seen in America in recent years. The admission that securities analysts deliberately skewed their research to attract investment-banking customers shows how easily the proper functioning of checks and balances in corporate governance can break down-even in the most advanced system-leaving minority shareholders at risk.