Which legislation was a response to corporate scandals involving major companies like Enron and WorldCom?

The Sarbanes-Oxley Act of 2002 was enacted in direct response to significant corporate scandals, particularly those involving companies like Enron and WorldCom. This legislation aimed to enhance corporate governance and accountability, implementing stricter regulations on financial practices and reporting for publicly traded companies. It introduced measures such as the requirement for top management to personally certify the accuracy of financial statements, the establishment of new auditor independence standards, and increased oversight of public accounting firms by the Public Company Accounting Oversight Board (PCAOB). These reforms were designed to protect investors from fraudulent accounting activities and restore public confidence in the financial markets.

In contrast, the other legislation mentioned addresses different aspects of financial regulation and business practices. The Securities Act of 1933 primarily focused on the initial sale of securities and ensuring transparency in securities offerings. The Graham-Leach-Bliley Act removed barriers among different financial services, enabling broader affiliations between banks, securities firms, and insurance companies. The Securities Exchange Act of 1934 established the Securities and Exchange Commission (SEC) and regulated the secondary trading of securities. None of these took direct aim at the corporate accountability issues highlighted by the scandals that led to the creation of the Sarbanes-Oxley Act.