Sarbanes/Oxley

In the 1990's large companies were using accounting tricks and some like Enron got caught and went broke. In response the government passed Sarbanes/Oxley which placed new controls over how corporations behaved. The 2002 Sarbanes-Oxley Act aims at publicly held corporations, their internal financial controls, and their financial reporting audit procedures as performed by external auditing firms. This resulted in a lot of new investment going to private equity markets. Private equity is an alternative form of private financing, away from public markets, in which funds and investors directly invest in companies or engage in buyouts of such companies. They are not controlled or answer to the Securities and Exchange Commission. Increasing demand from investors for private equity has been significant, with the industry growing more than 500% since 2000, valued at over $3trn in 2019 and expected to grow to $5.8 trillion by 2025. This is an example of unintended consequences.