Pages: 77-91

Abstract

Scam is commonly referred to as an intentional act committed to harm or injure others securing an unfair or unlawful gain. According to the Securities Exchange Act (1934) SEA-"It shall be unlawful for any person to engage in any act, practice or course of action which operates or would operate as a fraud or deceit upon any person in connection with the purchase or sale of a security." There is a certain systemic risk involved if brokers or banks get into settlement problems during the process of transacting in securities. If so, it results in a domino effect, which could create problems for other banks and brokers in the system. The number of past research reveals the various aspects of the securities and financial scams but in this study, an attempt is made to line up the causes which made the financial crisis so grave. The number of provisions and regulations were made to prevent from securities and financial frauds, but still there are some loop holes which causes corporate frauds. Therefore, there is need to analyze the impact of scams on the regulatory framework. The study attempts to find out the causes of these loopholes, as well as the responses of the regulatory bodies on these scams. The objective of the study is to know the impact of securities and financial scams on regulatory framework. A thorough study of the original rules and regulations as well as the amendments made in the rules and regulations of the regulatory authorities due to the occurrence of scams was conducted. This study is descriptive in nature. It attempts to know about the effect of securities and financial scams on the regulatory framework. Therefore, the qualitative analysis of data is done in order to achieve the objective.