Law and ethics Essay Example | Topics and Well Written Essays - 500 words - 3

Law and ethics - Essay Example Management failures have occurred in the past due to which policy makers were promoted to create the Sarbanes-Oxley Act. Managers are involved in the act of providing misleading (overly positive) information regarding their organization. Similar kind of activities took place before the crises of 2008 and when the real valuation of the financial products were realized, the offloading of investments took place and odds turned against the managers. Due to this change in policy, several banks increased the amount of their investments and provided huge amount of loans and the end result was that some of the major banks of US lost all their liquidity and were on the verge of going bankrupt. John C. Coffee asserts that there are three main causes of the crises of 2008, these include: Failure of gatekeepers which in this case is the rating agencies, managerial failures which in this case is that the mangers gave precedence to their own interest over the interest of their investors and lastly because the regulations were relaxed by the Securities and Exchange