Big Bang.It connected London to a group of international securities dealers, making the city's trading floor largely obsolete. In the United States, such over-the-counter trading was at least partially responsible for the problems associated with program trading that arose in the 1980s and the collapse of the stock market in Oct., 1987. These events highlighted the weaknesses of computerized networks like NASDAQ. The 1980s were a decade of unprecedented volume and activity in securities trading because of technological innovation and new financial products. Securities fraud, particularly the insider-trading scandal, became a major issue. Insider trading, or the private trading of securities based on information that has not yet been made public, became an issue in the mid-1980s with the prosecution of such investors as Dennis Levine (1986) and Michael Milken (1988). Many contended that securities fraud of this sort was a result of deregulation of the securities industry since at least the early 1980s, with an attendant relaxation of supervision by the U.S. Securities and Exchange Commission (SEC). The 1990s saw a renewed and accelerated effort by the SEC and other regulatory agencies to regulate the securities industry. In the early 21st cent. regulation once again eased while a number of widely traded financial products relating to securities, such as credit default swaps, remained unregulated; this, in addition to the housing bubble and resulting credit crunch, were widely regarded as contributing to the stock market meltdown in Sept.–Oct., 2008.
See A. Pessin, The Illustrated Encyclopedia of the Securities Industry (1988), M. Torosian, Securities Transfer (1988), and E. F. Fama, Foundations of Finances (1976).
The Columbia Electronic Encyclopedia, 6th ed. Copyright © 2012, Columbia University Press. All rights reserved.
See more Encyclopedia articles on: Money, Banking, and Investment