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7 - The Dot-Com Bubble

from The Third Era

Published online by Cambridge University Press:  24 March 2022

Seth C. Oranburg
Seth C. Oranburg
Affiliation:
Duquesne University, Pittsburgh
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Summary

The sharp and rigid dichotory between public and private corporations is a hallmark of securities regulation, but it has become outdated. The recent emergence, and dominance, of large private companies—once called “unicorns” for their rarity but now numbering in the hundreds—undermines essential assumptions behind securities regulations. This Chapter explores how the rise of these gargantuan private companies was brought on by the public’s eroding confidence in public companies and exacerbated by an ill-equipped government producing ineffective, reactionary legislation. Specifically, the Penny Stock Reform Act of 1990 and the Sarbanes-Oxley Act of 2002 resulted in a muddied pool of legitimate and fraudulent investment opportunities. Ordinary investors were left clambering for new investment opportunities and have shifted their gaze to the wilderness of the unregulated cryptocurrency market.

Keywords

Unicorn companiesDeacorn companieslarge private companiesPenny Stock Reform Act of 1990Sarbanes-Oxley Act of 2002 (SOX)
Type
Chapter
Information
A History of Financial Technology and Regulation
From American Incorporation to Cryptocurrency and Crowdfunding
 , pp. 87 - 95
Publisher: Cambridge University Press
Print publication year: 2022

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References

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  • The Dot-Com Bubble
  • Seth C. Oranburg, Duquesne University, Pittsburgh
  • Book: A History of Financial Technology and Regulation
  • Online publication: 24 March 2022
  • Chapter DOI: https://doi.org/10.1017/9781316597736.008
Available formats
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  • The Dot-Com Bubble
  • Seth C. Oranburg, Duquesne University, Pittsburgh
  • Book: A History of Financial Technology and Regulation
  • Online publication: 24 March 2022
  • Chapter DOI: https://doi.org/10.1017/9781316597736.008
Available formats
×

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

  • The Dot-Com Bubble
  • Seth C. Oranburg, Duquesne University, Pittsburgh
  • Book: A History of Financial Technology and Regulation
  • Online publication: 24 March 2022
  • Chapter DOI: https://doi.org/10.1017/9781316597736.008
Available formats
×