what type of implications did the Dodd-Frank act have on wall-street? Be specific please. The answer...

what type of implications did the Dodd-Frank act have on wall-street? Be specific please. The answer must at least be a page.

Expert Solution

Dodd Frank Act: This law was passed with the intention to protect the consumers of financial institutions and regulate the securities market .This law was passed after the recession of 2008 with the aim to protect too big to fall banks. This also made a clear demarcation between the activities of commercial banks and investment banks. It sought to regulate the mortgage and CDS market which were responsible for the recession in 2008.

Implications on Wall Street

It helped in scrutinizing any financial anomalies or misreporting by public companies. It also emphasised on whistle blower protection.These laws are important to prevent recession and minimize its effects to investors by taking proactive steps like auditing and encouraging reporting of malpractices. Hence share prices were not impacted by insider trading and other malpractices
Insider trading means using information which is not available in the public and using it to make large transactions at the expense of other investors. Insider trading are carried by employees of a company or their relatives who have information which are sensitive and use it to carry out trading in the stock market .
It is prohibited because it causes huge losses to other investors and its is unfair to them as the transactions are done before they receive any information.

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jeff jeffy answered 1 year ago

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