Punishing the corporate delinquents

Proper laws and their implementation are inextricably linked with good corporate governance.  Crimes are as old as the human beings are. There are crimes, so there are also punishment.
The London Stock Exchange went into operation in the 17th century. In the 18th century it witnessed a gargantuan share scam known as the South Sea Bubble. A parliamentary committee looked into the matter. The incident took place in 1720. The then British Finance Minister (official designation-chancellor of the exchequer) was found guilty and committed to the Tower for most notorious, dangerous and infamous corruption.
In India, the Mumbai share scam took place in 1992 and Harshad Mehta, the villain, was arrested and put to jail. He could not come out alive from incarceration.
In 2001, the USA witnessed a macabre corporate disaster in addition to the Twin Tower tragedy in New York City. Enron and a few other companies collapsed. The US government immediately went into action. Anderson, one of the world's five biggest audit firms, was shut down for playing a villain in the scandal. A lot of corporate mandarins were arrested and one executive committed suicide. The age-old monopoly of chartered accountants (CAs) as the sole authority for handling corporate audit reports was clipped and a separate accountant body was set up for publicly-traded companies. The body was known as the Public Company Accounting Oversight Board (PCAOB).
The company board, hitherto consisted of sponsors-primary share holders-was compelled to include directors. Now every public limited company will have to accept two or three members as directors of the board and they are known as independent directors. They will have no financial stake in the company in any form. This concept, first introduced in the USA, has been accepted in all countries around the globe. Within a decade the US Congress has passed two acts known as Sarbanes-Oxley Act and Dodd Franck Act. The first one was to prune the wings of a publicly-traded company that hitherto had seen abnormal growth because of the unfettered freedom in the market economy. Objectives of the Dodd Frank Act are to promote financial stability in the US by improving accountability and transparency in the financial system to help the too big stem failure and protect the American taxpayers by ending bailouts to protect consumers from abusive financial practices.
During the last global economic depression a large number of public limited companies in the developed world, more prominently in the USA, had to be bailed out or rescued by the government belying the views of the orthodox protagonists of the market that it would take care of itself and no government intervention would be necessary.
Bernard Madoff, a member of the Wall Street, was incarcerated for his alleged crimes in the share trade.
This litany of corporate misdeeds has been presented only to emphasise that corporate delinquent cannot be allowed to go unpunished.
The fledgling share market of Bangladesh experienced two great share scams within less than two decades. In both cases enquiries were duly made. Concerned committees submitted comprehensive reports and suggested measures to be taken. The most interesting thing is that the same faces were among the delinquents in the two scams.
Bangladesh never lacked response from investors both in primary and secondary markets. For the primary market, Bangladesh is a gold mine. Any initial public offering (IPO), even with minimum credibility, has been oversubscribed several times. A section of prospective sponsors are not taking this positively, rather they have tried to deceive and exploit the people in different ways. Because of this criminal psyche the two scams took place.
The London-based The Economist published a report on the latest scam in the Bangladesh stock markets. It was captioned Slaughter of the Innocent. The caption of the 1996 share market scam was repeated in 2009-2010. In spite of mentioning specifically the names of the delinquents, the Bangladesh Securities and Exchange Commission (BSEC) did not take any action.
The BSEC or the government may claim that it has been successful in demutualising the local bourses. It is never a panacea for all the ills in the share market. Definitely it will help in creating a dynamic administration in the stock exchange. But in the event of any share market scam a section of share brokers, share traders and a group of sponsors form an unholy alliance and create an artificial bull market to allure and mislead the innocent investors. Virtually these innocent investors are allured into the buying spree and trapped. The members of the unholy alliance unload their shares, book the profits and siphon them away.
Since the delinquents have not been tried and punished, there may be repetition of the same in future. It has already been reported in the media that a section of rogue share traders was trying to contact different probable IPO issuance companies with some ulterior motives.  
The corporate delinquents must be brought to justice. Because of the demutualisation of bourses there will not be any impediment to taking legal action unlike that in the past. Now, it is the will of the BSEC that matters.
rezaulparvaz@live.com