Macro

New York's attorney general revealed internal messages calling recommended dot-coms 'junk' and worse. The disclosures ignited the Wall Street research scandal, crushed confidence in sell-side ratings, and led to the Global Settlement.

Arthur Andersen was found guilty of obstructing justice by destroying Enron-related documents during a federal investigation, leading to its collapse and exit from the auditing business. Once a top accounting firm, Andersen lost clients and employees, reshaping the industry as the 'Big Five' became the 'Big Four'. The conviction may deter corporate document destruction and intensify scrutiny on auditor accountability.

The act created the PCAOB, forced CEOs to certify accounts, and criminalized accounting fraud with long sentences. It permanently raised compliance costs for public companies and was blamed for pushing listings abroad, but restored baseline trust in US financial statements.

Ten top firms settled with regulators, agreeing to separate research from banking and fund independent analysis. The pact closed the analyst scandal and rewrote how the Street produces and pays for equity research.