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The creation of the SEC as a government body for oversight arose out a recognition by the courts that private action was not enough to protect investors and consumers from the materially misleading representations of corporate America (Cox, Thomas, and Kiku, 2003). Since its creation, however, the numerous laws and regulations that have come to frame the world of corporate governance have exceeded the limits of manageable governance. By the time the SEC has identified a problem, pursued investigation of the corporate representations of public offering, performed forensic accounting, and compared potential corporate malfeasance to the Sarbanes-Oxley Act of 2002 (arising out of the Enron debacle); it can be years before the investigations and examinations of accounting practices are put into a coherent dialogue as to be able to swiftly bring to justice the perpetrators of fraud, much less give investors or potential investors a heads up that they have been swindled. In fact, it is the design of the SEC processes that they not go public with their investigations, because just the whisper of it on the wind could ostensibly bring on a frenzied selling of investments that could be more harmful than the fraud and malfeasance being investigated.
The SEC is not a social welfare agency. It is not the mission of the SEC to establish legal cases for private individuals or groups of individuals pursuing class action law suits (Cox, Thomas, and Kiku, 2003). If we examine the historical role of the SEC in uncovering corporate malfeasance and fraud, it would probably suggest that SEC investigations have led to relatively few cases of corporate leaders being prosecuted and imprisoned, but rather that the SEC has collected large fines from corporations (not distributed to defrauded shareholders), and that certain corporate leaders, CEOs and CFOs, and lesser managers, have been prohibited from sitting on the boards of publicly traded companies, or from ever again being responsible for the leadership of a publicly traded company. Until recently, it is only the most egregious cases of fraud and malfeasance where the SEC has built cases against individuals that have been used to prosecute, rather than remove, corporate leaders. This, of course, does not satisfy the investor groups or individuals who have experienced significant financial losses as a result of corporate avarice.
"More significantly, numerous regulatory provisions of the securities laws create problems that prevent the meaningful pursuit of violations by private plaintiffs. In many cases, the loss suffered by the plaintiff or even a group of plaintiffs may not rise to a sufficient level to attract the interest of the entrepreneurial plaintiffs' attorney. And, the expected gains of the suit may be heavily discounted by both the plaintiff and his attorney, due to problematic elements such as establishing or even pleading key elements of the case. (18) The plaintiff may, not withstanding a clear violation, face causation or standing requirements. (19) Or, the violation may not have been discovered within the applicable limitations period. (20) It can also be the case that the violation is simply of the type for which no private action exists. The net capital requirements of brokers, (21) the requirement of reliable internal controls and records, (22) and compliance with the independence requirements of auditors and audit committee members (23) are examples of such provisions. The absence of a private action may well be because the nature of the regulation is one that focuses not on investor protection as such, but rather on achieving desired efficiency or general confidence in the market. Violation of such a broadly-based social objective is a poor candidate to isolate particular investor harm and, therefore, to equip the investor with a private enforcement remedy, let alone to exclude the SEC from enforcement. If the SEC then is to have an enforcement mission, why not allow its actions to cover those violations where there may also be private harms that arise from the violation. A related factor is the a priori concern that private actions may well be fortuitous, but that SEC actions may be more deliberate in their focus. As we will see in the data assembled in this Article, there is little overlap between private and SEC suits. This finding documents the a priori assumption that reliance solely on private enforcement will in turn depend on serious imperfections in the market for private suits . ....
(Millstein, 2005) Since United States and Australia are countries which are already considered to be globally competitive that has attained its almost perfect status in the world market, developing countries are basically taking into account every step that they make for which they might soon adapt to attain the same position in the global context. Therefore, studying both countries' corporate governance is necessary in order for other developing countries to
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