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Sarbanes-Oxley Act of 2002In 2001, the Enron Corporation, one of the world’s largest traders ingas, electricity, and related commodities, collapsed in scandal anddeclared bankruptcy. Enron was accused of many crimes, includingdeceiving investors, inflating profits, and hiding debts. Arthur Anderson,the company’s accounting firm, was later convicted of obstructingjustice by shredding documents related to its work on Enron’s accounting.Finally, WorldCom, then the world’s second largest long-distanceprovider, suffered the largest bankruptcy in American history after itwas revealed that it had improperly booked over $7 billion in earnings.As a result of these high-profile scandals and to shore up faith inthe American economy, President Bush signed the Sarbanes-Oxley Actof 2002. The act contains important rules affecting the reporting andcorporate governance of public companies and their directors andofficers. Major provisions include requiring CEOs and CFOs to certifyperiodic reports filed with the SEC. It also prohibits most loans todirectors and executive officers, and forces company insiders to reportchanges in beneficial ownership within two days after a transaction hasbeen executed.Other Forms of RegulationThe government regulates corporate activities in ways other thanthrough securities and antitrust regulation. These regulations includesuch things as the impact that corporate activities have on energy conservationand environmental protection.Energy RegulationThe energy crisis of the 1970s drew the attention of the nation towardenergy conservation. The federal government addressed the problem bycreating the Department of Energy and the Federal Energy RegulatoryCommission. The Nuclear Regulatory Commission regulates nuclearenergy.Social StudiesCorporations in theUnited States evolved asthe nation grew. Federalcharters for corporationswere granted to both ofthe banks of the UnitedStates and to certainrailroads after the CivilWar. Laws were enactedas problems arose, andcommissions werecreated to administerthe laws. In general, thehistory of corporationsin the United States hasbeen marked by variousfederal regulations.Research ActivityUsing the medium of yourchoice, create a pictorialrepresentation of corporateregulation in theUnited States. Include thelaws, commissions, andgovernmental regulationsaffecting corporations.Federal Energy Regulatory Commission The Federal EnergyRegulatory Commission (FERC) controls the wholesale price of naturalgas and electricity sold for use in interstate commerce. However,utility companies can apply to FERC if they believe an increase in pricesis warranted. Intrastate prices are regulated by state utility agencies. TheFERC also makes rules regulating interstate transportation of electricityand natural gas.Nuclear Regulatory Commission The Energy Reorganization Actcreated the Nuclear Regulatory Commission (NRC). The commissionChapter 30: Corporate Regulation and Expansion 651