Finding Longitude: Reflections on the Capital Markets

I am pleased to be in Chicago to discuss the current state of our capital markets, both public and private, and I want to thank the University of Chicago Business Law Review for inviting me to be a part of this important and timely symposium. I must note at the outset that my remarks are my own and do not necessarily represent the views of the Public Company Accounting Oversight Board, my fellow Board members, or the staff of the PCAOB.

Free and informed decision-making by investors is a critical engine driving growth and opportunity in the American economy. The market capitalization of American public equity stocks is over $60 trillion, with issuances of over $200 billion annually.1 Daily, over $600 billion in publicly traded equity changes hands, and over $150 trillion does so annually.2 Our private markets are significant as well,3 as are our fixed income markets.4American capital markets dwarf all others: our publicly traded equity markets are six times the size of China’s, ten times the size of Japan’s, and 20 times the size of Great Britain’s.5 In fact, the United States has the deepest, most liquid, and, overall, the most reliable capital markets in the world.

Yet, America’s leadership in the capital markets is far from guaranteed. Rather, over the last 100 years—and often in response to problems and crises—the U.S. has carefully built the world’s leading capital markets by deploying the tools necessary to shape the market in favor of fairness, competition, and efficiency.

American markets have become the North Star of capital markets globally because legislators and regulators have shaped our markets through legal certainty, market transparency, and market integrity. Investors trust the U.S. capital markets with their money because we build our boats with sturdy wood, we have clear maps that show where we are and where we are going, and we patrol the waters effectively to stop pirates.

As you can see, I’m on a nautical theme, so to help us understand why the deployment of market-shaping tools is so important to making markets vibrant, I want to start in Greenwich, England. In October 2025, I was in London’s Canary Wharf, chairing the biannual meeting of the Global Audit Quality Working Group of the International Forum of Independent Audit Regulators (IFIAR). After spending almost a week in a hotel conference room, I finally ventured across the Thames River to Greenwich. There, the Royal Museums recount the history of England’s exploration of the oceans and its rise to prominence in global markets. Also there, the Royal Observatory sits atop the Prime Meridian—0 degrees longitude.

I had not given much thought to latitude or longitude. But as author Dava Sobel explains in her book Longitude, knowing where you are on the east-west axis of planet Earth was an enormous problem for ocean-going voyagers.6 Unlike latitude, which could be known by measuring the constellations, the stars provided no workable guides regarding where you were, either east or west. Instead, sailors could, in theory, judge their distance by looking at the midday sun and comparing it to the time at their home port. In addition, clocks with their multiple moving parts were unreliable in the face of the storms, currents, temperature changes, and ocean salt. Sailors had to operate largely by experience and instinct. Unfortunately, sometimes they could be off—way off.

The problem of longitude added a great deal of unnecessary danger to what was already quite a hazardous field of endeavor. When ships could not determine where they were, supplies could run out, and sailors could die of scurvy or starvation. The problem came to a head on a foggy night in 1707 when four large British naval ships crashed into some barren, rocky islands 28 miles west of England in the Atlantic Ocean. Two thousand soldiers and sailors lost their lives, making it the worst non-wartime disaster in British naval history. 7

Following that tragedy, soldiers, sailors, and commercial mariners petitioned the British Parliament to take action. Taking testimony and advice from Sir Isaac Newton and other leading scientists of the day, Parliament passed the Longitude Act of 1714— the first law of its kind. The Act was simple: a new Board of Longitude would award a handsome prize—up to £20,000—to develop a method to measure longitude on the open ocean accurate to half a degree.8 For reference, at the time, a captain of a first rate warship earned roughly a pound a day.9 The prize was available to persons of any nationality, using any approach, who solved the problem of longitude.

I will not give away all the details of the story, which is beautifully told in Sobel’s book. The short version is that an independent clockmaker beat out the top scientific minds of the day, although a bit of Parliamentary oversight and intervention was needed to get the prize fairly distributed. The main point for our purposes is this: once the threat it represented was finally too serious to ignore, an expert governmental agency supported the innovation needed to solve a problem that the market did not alone address. As a result, an entrepreneur “in his garage” developed a breakthrough technology that revolutionized maritime navigation.

The structure and details of today’s financial markets, especially our financial markets, differ greatly from those of the eighteenth century. But certain core challenges and tools used to meet those challenges share a lot in common. Just like sailors, investors navigating the seas of the capital markets don’t inherently know where they are or who they are dealing with. Investors need reliable maps to cross the informational ocean between them and businesses in which they invest. Ultimately, investors need confidence to trust their money with strangers.10 To achieve those ends, public interest regulators must actively help shape markets.

Political scientist Steven Vogel has called the active shaping of markets, “marketcraft.” When thoughtfully executed, marketcraft increases the efficiency and effectiveness of markets, enhances the ability for markets to deliver benefits to society, and reduces the costs, including to taxpayers, of market failures.11 In the capital markets, several marketcraft tools stand out for consistently delivering the outcomes businesses and investors require, including depth, liquidity, and reliability. As I mentioned above, I group these tools into three buckets: legal certainty arising from Anglo-American legal institutions; transparency and disclosure; and trust and integrity arising from active oversight. Let’s dig more deeply into each.

The first tool of marketcraft is the certainty that arises from the operation of our Anglo-American legal institutions. Our legal system establishes the foundational building blocks of our democracy and our free market economy. In many ways, the legal certainty provided by our legal system supports the rights and freedoms that allow entrepreneurs and businesses to innovate, and the rights and protections that investors need to trust strangers with their money.

The Nobel Prize-winning work of economists Daron Acemoglu, Simon Johnson, and James Robinson highlights how strong legal rights and institutions promote dynamic and inspired problem-solving, generating the economic confidence for opportunity and growth.12 This vital economic confidence is grounded, of course, in property rights, but it is also infused by a wellspring of other rights and freedoms, such as our guarantees of free speech, religion, press, assembly, the right to vote, due process, equal protection, and more.

Americans’ legal rights and institutions undergird and promote an ecosystem of innovation, creative problem-solving, and, ultimately, prosperity, grounded by checks on power, whether governmental or market power. Rights and freedoms, including the ability to go to court and receive a fair hearing when things go awry, are powerful tools for enabling investors to trust others with their money. As America’s founders recognized, allegiance to our inherited legal institutions must be renewed in each generation. This allegiance manifests as respect for laws and norms, and their reasonable enforcement, a respect that is arguably the cornerstone of our vibrant capital markets—a fundamental truth we need to remember and continually fight to preserve.

Transparency is another foundational tool of marketcraft in the capital markets. Information is what market participants, both large and small, need in order to allocate capital efficiently. Disclosure allows investors to set their own priorities, thus injecting flexibility and creativity into the system. Yet markets are not naturally transparent; rather, regulators must actively shape and encourage transparency. One of my favorite (fairly) recent examples of shaping the market in favor of transparency is actually in the fixed-income markets. By providing relatively simple real-time reporting of bond transactions, FINRA’s TRACE system has enabled market participants to more accurately value fixed-income assets. In doing so, it has brought transaction costs for trades down and improved market efficiency overall.13

I’m an audit regulator in my current position as a board member of the PCAOB. Two fairly recent audit examples regarding transparency are critical audit matter disclosure and audit partner disclosure.14

And in the public markets, it’s worth dwelling for a moment on instances where accounting and auditing have been used to shape the equity markets and promote transparency: first, consider the mandate for public companies to disclose their financial statements each year as prepared in conformity with Generally Accepted Accounting Principles; also consider the requirement for public companies to obtain and disclose a third-party independent audit of those financial statements each year. Both are requirements for companies that want to list on an American stock exchange.

The trend towards disclosing standardized accounting and independent audit reports to investors emerged from the need to raise money from geographically dispersed investors for capital intensive projects, in particular for the construction of the transcontinental railroads in North America. Are there any Downton Abbey fans in the audience? Remember when Robert Crawley, the Earl of Grantham, lost most of his wife’s fortune by investing in Canadian railroad stock? And while they evolved in the decades since the railroads, standardized accounting and independent audit reports only became required for the protection of all investors after the Great Crash of 1929 led to the reforms embodied in the Federal securities laws.

Why are these basic requirements for listed company financial statements such great examples of marketcraft? Quite simply, GAAP financials enable investors to clearly and consistently understand what the financial statements mean. They also enable investors to make apples-to-apples comparisons across companies and sectors. Similarly, the requirement for the preparation and disclosure of independent audits of those financial statements enhanced the integrity of that financial reporting by telling investors that the numbers were in the correct categories and that there was reasonable assurance that they were accurate.

As I’ve noted, these developments did not occur as a matter of market forces alone. It took crises and scandals, followed by legislative and regulatory intervention—and such as the Great Crash of 1929 and the McKesson & Robbins scandal of 1938—for these requirements to be more fully formed and implemented.

In contrast, take the private (non-publicly traded equity) markets today—the topic of this symposium. In private markets, reporting non-GAAP financials is not unusual, and independent audits of financials are not as common or as robust as they are in the public markets. The reality is that standardized financial reporting and independent audits would not be consistent practice in the public company markets absent regulatory intervention.

Transparency through standardized presentation of financial statements and disclosure of assurance by independent third-party auditors are vital tools for investors. They also serve as critical protections against fraud, when managers may feel pressured to make their businesses look better than they actually are.15 However, transparency alone is not enough.

The audit report points towards the importance of a third tool of capital markets marketcraft: active oversight that enhances the accuracy and reliability of information in the markets. Indeed, the value of the third-party independent audit report is the confidence it gives to investors that a company’s financial statements are presented fairly, in all material respects, and are free from material misstatement, whether caused by fraud or error.

The collapse of WorldCom in 2002 remains a poignant example of why good assurance is needed to support market integrity and trust by investors. To refresh your memories, the CEO of WorldCom, a telecommunications company, wanted to boost revenue so that the company would not be seen as falling behind growth targets and its primary competitors. Unfortunately, the company did so by doctoring its financials. Specifically, by suddenly capitalizing the charges that it had previously expensed, the company fraudulently increased net income by reducing costs. Several securities analysts began to question the sudden income increase. Sadly, WorldCom succeeded Enron as the then-largest bankruptcy in American history.16

Following the Enron and WorldCom scandals, Congress passed the Sarbanes-Oxley Act, almost unanimously, to restore investor and public trust in the American capital markets. In that law, Congress reaffirmed the importance of the independent third-party audit to the provision of market integrity. Yet Congress also reshaped the oversight, and in some cases the content, of the public company audit, and of public company governance. In doing so, it deployed again the marketcraft tool of active oversight.

The Sarbanes-Oxley Act’s (SOX) first title created the PCAOB to be an expert audit regulator that would engage in active oversight of public company auditing, including through setting audit standards, conducting inspections of audits, and bringing disciplinary actions. It also barred audit firms from providing most non-audit services to audit clients and required independent audit committees of public companies to select, set the compensation for, and oversee the company’s auditor. Additional reforms required CEOs and CFOs to certify to their companies’ balance sheets and internal control systems, and it required an auditor’s opinion on a company’s internal controls on financial reporting.17 Finally, SOX created a dedicated, independent funding stream that removed key conflicts of interest in audit and accounting standards and oversight.18 After it was discovered that prominent financier Bernie Madoff had been running a Ponzi scheme, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 extended PCAOB oversight to the auditors of broker-dealers.19

Twenty years later, the PCAOB annually reviews over 900 audits at more than 200 audit firms, including in over 30 foreign jurisdictions. These audit inspections are performed by a highly skilled staff of more than 500 audit inspectors. The annual inspection process also enhances the PCAOB’s understanding of key areas affecting audit standards, which the PCAOB is responsible for updating and modernizing.20 To maintain the integrity of the audit and inspection process and guard against intrusions on auditor independence, the PCAOB also brings targeted disciplinary cases. For example, last year the PCAOB brought cases to stop and deter widespread exam cheating at audit firms.21 Academic studies confirm that the PCAOB’s active oversight over the public company audit has repeatedly enhanced the integrity of the capital markets.22

The point of thinking about these developments as marketcraft is that none of these trust-inducing mechanisms arose on their own from the state of nature. From the Sarbanes-Oxley Act to the Holding Foreign Companies Accountable Act, and diligent regulatory oversight thereafter, it took hard work by public-minded legislators and regulators to pull markets out of opacity and information asymmetry to allow strangers to trust other strangers with their money.23 Indeed, the same is true for many of the rights and freedoms that are invaluable parts of the U.S. legal framework: from the Constitution to the Civil Rights Movement and even today, this work has never been easy. But the choices we make to actively shape markets in favor of legal certainty, transparency, and integrity matter not only to the capital markets, but also to our economy, and society as a whole.

This upcoming year is the 250th anniversary of American independence. Our capital markets are a critical part of our success story, greatly contributing to the development of our nation’s economy and the prosperity of our people. With this symposium at the University of Chicago, I’d be remiss if I didn’t underscore how important our world-class universities and amazing entrepreneurs have been to the nation’s growth and prosperity, as drivers of knowledge and innovation. As an aside, the Board of Longitude I mentioned earlier remained in existence until 1828. It ultimately distributed over £100,000 to support practical innovation and research, a precursor of sorts to the important role that government plays today in supporting academic research and achievement across a range of vital fields.24

So where might marketcraft be needed to help shape and improve the capital markets today? Rapid change is rippling through our economy and our markets. Two areas where I believe we should be especially focused are the dazzling new uses of AI technologies and the continuing trend away from public equity markets, the topic of today’s symposium.

This year’s Nobel Prize in Economics, awarded to Joel Mokyr, Philippe Aghion, and Peter Howitt,25 recognizes the vital role that innovation plays in economic growth. Specifically, it describes how markets generate wealth and prosperity through their immense power to creatively destroy, or replace, old innovations with new. This is a sometimes painful, but ultimately healthy process, although it’s not without its costs and risks. As the Board of Longitude highlights, identifying what research and which innovations may succeed is not simple. Not all innovations or investments bear economic fruit. Part of the key to facilitating a healthy form of creative destruction is, therefore, to have in place and use the kinds of marketcraft tools I’ve been discussing today: strong legal institutions, market transparency, and market integrity. This better allows investors, business leaders, and society at large to strive for and enjoy the benefits of growth and opportunity in the midst of these sometimes painful cycles.

With the advent of increasingly powerful forms of artificial intelligence, we are watching creative destruction play out before our eyes. Computers are starting to write reports, code software, book travel itineraries, and so much more—doing in minutes what previously had been done in hours, days, or weeks. We are watching this play out in financial reporting as well, as AI is increasingly bringing efficiencies to both the preparation of the financials and to the audit itself. Keeping humans in the loop will be important, but also more difficult over time. Ultimately, humans will have to set up the nodes of responsibility in the system to ensure that data is accurate and AI technologies are trustworthy.26 Auditing those systems will be more important than ever.

Academics have identified technology systems audits as an area in need of additional focus by audit firms and regulators.27 But even the most basic approaches to determining the integrity of financial statements are likely to be challenged in the coming years. As Enron and WorldCom proved, the incentives to “go easy on the auditing side . . . combined with auditing methods of the time that weren’t strong enough to uncover elaborate, high-level fraud schemes” make such schemes likely to recur.28 While the PCAOB has done yeoman’s work to tackle both challenges, the advent of generative AI means the bar is being raised. Right now, AI tools can create thousands, if not millions, of fake documents.29 Quite simply, it is going to get easier to commit fraud unless we can build technical capacities to counter those risks and learn to supervise AI-driven audits of AI-prepared financial statements. That will require sustained financial investments in regulatory technological capacity or so-called RegTech—which is not an easy task.

Moreover, the extraordinary growth in AI may give rise to another challenge we need to be attentive to: the pressure to sustain those financial returns. The WorldCom collapse was a classic case of this, and the AI sector is unlikely to be immune from these pressures. Questions are already being raised about the circularity of revenue generation, investment valuations, and concerns about off-balance-sheet leverage. 30All of this is occurring against a backdrop of heightened leverage in the financial system owing to lower bank capital requirements and the loosening of Dodd-Frank’s restrictions on proprietary trading and private fund investing by the banking system.31 For those of us who lived through a financial crisis or two, we cannot help but wonder whether the scene is being set for trouble.

If we are to avoid a crisis, and instead sustain real returns over the long run, high-quality audits are going to be vital to upholding the transparency of and integrity around the financial reporting of AI-related companies. Without a doubt, the PCAOB’s activities to enhance transparency and provide active oversight—including the inspection of individual audit files—are critical to those efforts. But other financial regulators need to be equally diligent as well.

AI presents an additional challenge for our audit sector: heightened reliance on third-party technologies and systems. That reliance may generate risks that regulators need to be attentive to. Are auditors prepared to manage cybersecurity and operational risks around AI vendors? Does AI expose audit firms to heightened competitive pressures, as smaller audit firms may be unable to keep up with the level of investment and the costs around technology? Can AI impair the independence of the audit firms themselves in conducting audits of critical vendors? Can it expose audit firms to competitive economic pressures from AI providers themselves, especially in situations in which different data systems have not been aligned to facilitate portability?

These are just some of the difficult questions that capital markets regulators will have to grapple with in the coming years around how to help shape markets in the face of the powerful challenges and opportunities from new technologies. Some of the hard work has already started. In the prior five years, the PCAOB has set out new standards for systems of quality control32 and for technology-assisted analysis.33 Full implementation is going to be very important to ensuring the active oversight necessary to sustain market integrity. Staying abreast of rapid changes is also vitally important. The PCAOB’s standard-setting benefits immensely from the ongoing pulse gained from inspections of both large and smaller audit firms. It also allows the PCAOB to calibrate its disciplinary approaches based on its practical understanding and knowledge of the industry. The PCAOB also maintains ongoing engagement with auditors, investors, audit committee members, and the public, including through our Standards and Emerging Issues Advisory Group and our Investor Advisory Group, and directly with registered audit firms and interested academics and experts. How to keep improving public company audits in light of new technological developments is front and center in that engagement.34 In the coming years, the PCAOB and other regulators will need to remain vigilant as technology continues to evolve.

Changes in our capital markets and economy are also upending the old quid pro quo of being a public company. It used to be that when a company went public, that is, registered with the Securities and Exchange Commission and met certain requirements regarding governance and disclosure, the company had access to more investors and thus could obtain capital at a lower cost. After decades of growth in the private markets, many companies no longer need to tap the public markets to secure the capital they need. Others are staying private for a much longer time before they go public.

One question that commonly arises is whether these trends are coming about because of the costs of the old quid pro quo in the public markets, such as the costs of complying with disclosures. From an audit perspective, the presence, or absence, of GAAP accounting and PCAOB audit oversight are some of the most important differences between the public and private markets. Interestingly, academic research indicates that regulatory costs are, at best, an exceedingly modest factor in the reason fewer companies go public.35 The far bigger reason appears to be the greater availability of private capital from institutional investors and wealthy individuals, and lighter triggers for when companies are required to go public under the federal securities laws.36

Those of us focused on the securities regulatory toolkit also commonly forget that public equity markets also have suffered from the multi-decade loosening of the antitrust laws. Entrepreneurs may forego IPOs and sell their companies directly to larger enterprises. If these are “killer acquisitions” that reduce competition in a sector by buying out potential rivals, both competition and public markets can be harmed.37 Similarly, the public equity markets can be harmed when persistent barriers to entry contribute to the phenomenon in which a small number of companies make up a high percentage of corporate profits.38

Whatever the causes, the old clarity between public and private markets has gotten quite hazy.39 I have long argued for a set of regulatory options that provides a continuum of capital-raising choices for companies at different stages in their growth.40 However, it is far from clear that we have been able to move the ball much beyond the all-or-nothing binary of public versus private markets.41 Now, there are renewed efforts to expand the pool of dollars allowing companies to stay private longer. But opening up the investment of 401(k) funds in private companies without the abovementioned quid pro quo (disclosure, audits, heightened corporate governance and other standards) should raise a number of concerns.

Regulators will need to ask important questions. What are the risks to retail investors from limited disclosure, no requirements for standardized accounting or independent audits, and constrained liquidity? Are some of these risks, such as the reliability of asset valuation, more elevated when there has been a series of private market transactions selling private companies from one private fund to another, before selling to retail investors? Only by asking such questions can regulators consider when and what marketcraft tools may be needed.

The current trend of nearly unlimited private market transactions raises implications for economic opportunity as well. If the U.S. public markets are only for the very largest, most mature companies, is there no longer a reasonable way for retail investors to participate in the growth of American public companies—long an important engine of middle class wealth?42 If retail investors have declining confidence in the opportunities that American public markets present, does a financial nihilism seep into their approach to their finances leading them to gamble with their future or worse?43

Those engaged in crafting rules for the capital markets need to carefully consider their direction. Where are we, and where do we want to go? What are the costs and benefits of action, or of inaction? Can we re-envision broadly inclusive onramps to the capital markets that allow more people to save for homeownership, college, and retirement? Usually, “accredited investors” are viewed as sophisticated enough or wealthy enough to absorb the risks of the private markets.44 Yet that dichotomy does not seem well designed for where we are today. To help us break through, maybe we should ask some new questions:

 When might investors have sufficient leverage, or power, to obtain apples-to-apples comparisons, with the accuracy and reliability that independent audits provide? When they might not, are there ways to navigate ensuing information and credibility gaps? Do these insights yield new ideas for how we might divide public from private markets?

 How might we strengthen the transparency and integrity of private market transactions? For example, are there non-GAAP metrics commonly used in the private markets that should be standardized? Can some type of assurance be provided on them? Should both be a condition to opening up these markets? Are there new ways to enhance valuation in markets that are not especially liquid?

These questions will only become more important as more Americans invest in the capital markets overall.45

As we look to the future, the challenges we will face in the coming years will, undoubtedly, be significant. From cutting-edge technologies to new financial innovations, creative destruction will continue to disrupt markets and our economy. It’s our job as regulators to respond to the challenges that disruption creates by shaping the markets in favor of legal certainty, transparency, and integrity. Inaction is as much a choice as action.

Looking back, we can remind ourselves that we’ve been through similar challenges before. We have succeeded in doing the near impossible. We found our bearings and navigated the Earth’s vast oceans. In our capital markets, regulators have helped shape our markets into the deepest, most liquid, and most reliable markets in the world. For almost a quarter of a century, the PCAOB has been able to enhance the integrity of the public company marketplace in ways that benefit investors, businesses and their workers, and the economy.46 The essential tools of marketcraft—legal certainty, transparency, and integrity—have served us well in finding longitude in our capital markets, to enable basic levels of trust between investors and businesses.

Are we perfect? Certainly not. But when things don’t work out as we hope, one of our strengths is that we are willing to face problems head on and find ways to improve. Ultimately, it’s about knowing where you are, and where you hope to go. Perhaps longitude really is everything—for sailors on the open ocean, for regulators shaping rules and for investors in the American capital markets.

• Market capitalization of listed domestic companies (current US$) - United States, World Bank Group, https://perma.cc/E6LF-FU2R  (last visited Mar. 30, 2026); Research Quarterly: Equity and Related, SIFMA (Oct. 14, 2025), https://perma.cc/R24L-6KAK.
• Market Activity, FINRA, https://perma.cc/PJS7-5TT9 (last visited Mar. 30, 2026).
• Regulation D offerings raised more than $2 trillion in capital in 2024. Regulation D Offerings: Number of Offerings and Capital Raised, Sec. & Exch. Comm’n (Dec. 22, 2025), https://perma.cc/DDT8-CDL8.  
• In the U.S., fixed income securities (excluding securitizations) trade over $55 billion in daily volume, of nearly $50 trillion outstanding. Market Activity, FINRA, https://perma.cc/PJS7-5TT9; US Fixed Income Securities Statistics, SIFMA (Feb. 10, 2026), https://perma.cc/9UKZ-DL33; Private credit markets top $1 trillion dollars. Daniel Maddy-Weitzman, NBFIs in Focus: The Basics of Private Credit, Fed. Rsrv. Bank of N.Y. (Oct. 17, 2025), https://perma.cc/5CDP-FPG2; José L. Fillat et al., Could the Growth of Private Credit Pose a Risk to Financial System Stability?, Fed. Rsrv. Bank of Bos. (May 21, 2025), https://perma.cc/A3AE-VGFB.
• Market capitalization of listed domestic companies (current US$) - United States, World Bank Group, https://perma.cc/E6LF-FU2R  (last visited Mar. 30, 2026).
• Dava Sobel, Longitude: The True Story of a Lone Genius Who Solved the Greatest Scientific Problem of His Time 8 (Bloomsbury USA 2007) (1995).
• Sea History for Kids, National Maritime Historical Society, https://perma.cc/S2WN-8ZFH (last visited Mar. 30, 2026).
• Sobel, supra note 6, at 53.
• Jean-Baptiste le Rond d’Alembert, Longitude of a Star, The Encyclopedia of Diderot & d’Alembert Collaborative Translation Project (2017), https://perma.cc/7JPY-UCRP (David Fleming trans.) (citing N.A.M. Rodgers, The Wooden World: An Anatomy of the Georgian Navy, 252 (1996)).
• See generally, Francis Fukuyama, Trust: The Social Virtues and the Creation of Prosperity (1995).
• Steven K. Vogel, Marketcraft: How Governments Make Markets Work (2018). See also Steven K. Vogel, The Marketcraft Solution: How the Government Can Reshape Markets to Make Them Work Better—For Everyone (unpublished manuscript) (on file with University of Chicago Business Law Review).
• For a summary, seeThe Prize in Economic Sciences 2024, The Royal Swedish Academy of Sciences (Feb. 25, 2026), https://perma.cc/NV5Y-48WA.
• See, e.g., Stacey E. Jacobsen & Kumar Venkataraman, Does Trade Reporting Improve Market Quality in an Institutional Market? Evidence from 144A Corporate Bonds (Apr. 30, 2018) (unpublished manuscript) (on file with University of Chicago Business Law Review); Michael S. Piwowar, Remarks at the Meeting of the SEC Investor Advisory Committee (June 7, 2016) (“[D]espite the concerns expressed through numerous anecdotes about negative consequences, the academic literature found no ill effects on fixed-income markets resulting from increased post-trade transparency.”); Amy K. Edwards et al., Corporate Bond Market Transparency and Transaction Costs, 62 J. Fin. 1421 (2007);
• S 3101: The Auditor’s Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion, Public Company Accounting Oversight Board, https://perma.cc/2N92-FAPQ (last visited Mar. 30, 2026); Form AP, Auditor Reporting of Certain Audit Participants, Public Company Accounting Oversight Board, https://perma.cc/RGQ4-VTT3 (last visited Mar. 30, 2026).
• See Howard M. Schilit et al., Financial Shenanigans: How to Detect Accounting Gimmicks and Fraud in Financial Reports (4th ed. 2018).
• For more on the WorldCom collapse, see Cynthia Cooper, Extraordinary Circumstances: The Journey of a Corporate Whistleblower (2008). For more on Enron’s collapse, see Bethany McLean & Peter Elkind, The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron (2003). On accounting concerns during the 2008 financial crisis, see generally, Nick Dunbar, The Devil’s Derivatives: The Untold Story of the Slick Traders and Hapless Regulators Who Almost Blew Up Wall Street . . . and Are Ready to Do It Again (2011); see also Examiner’s Report, In re Lehman Bros. Holdings Inc., No. 08-13555 (Bankr. S.D.N.Y. Mar. 11, 2010); see also The Role of the Accounting Profession in Preventing Another Financial Crisis: Hearing before the Subcomm. on Sec., Ins. & Inv. of the S. Comm. on Banking, Hous. & Urb. Aff., 112th Cong. 76 (2011).
• Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204, tit. I, §§ 101–105, 116 Stat. 745, 750–67; tit. II, §§ 201–206, 116 Stat. at 771–75; tit. III, §§ 301–302, 116 Stat. at 775–79; tit. IV, § 404, 116 Stat. at 789–90 (codified as amended at 15 U.S.C. § 7262 (2018)).
• Id. §§ 108–109, 116 Stat. 745, 767–71.
• Section 982 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, Pub. L. No. 111-203, § 982, 124 Stat. 1927 (2010). See J. Robert Brown, Bd. Member, Pub. Co. Acct. Oversight Bd., A Story that Will Not Tell Itself: The PCAOB’s Role in the Protection of Customers of Broker-Dealers (Oct. 7, 2020); see also U.S. Sec. & Exch. Comm’n, Office of Inspector Gen., Investigation of Failure of the SEC to Uncover Bernard Madoff’s Ponzi Scheme (2009) (containing more information on the Madoff fraud); see also U.S. Sec. & Exch. Comm’n, Office of Inspector Gen., Report of Investigation, Case No. OIG-509, Investigation of Failure of the SEC to Uncover Bernard Madoff’s Ponzi Scheme (Exec. Summary) (2009).
• See Kara M. Stein, Bd. Member, Pub. Co. Acct. Oversight Bd., Statement on the PCAOB’s 2026 Budget (Dec. 19, 2025).
• Press Release, Pub. Co. Acct. Oversight Bd., PCAOB Imposes Fines Totaling $8.5 Million on Netherlands Member Firms of Deloitte, PwC, and EY After Widespread Exam Misconduct (June 25, 2025), https://perma.cc/M7BP-9V82.
• See, e.g., Audrey A. Gramling et al., Are PCAOB-Identified Audit Deficiencies Associated with a Change in Reporting Decisions of Triennially Inspected Audit Firms?, 30 Auditing: J. Practice & Theory 59 (2011) (finding firms with PCAOB deficiencies were more likely to issue a GC opinion for financially distressed clients subsequent to their PCAOB inspection than prior to their inspection); Mark L. DeFond & Clive S. Lennox, Do PCAOB Inspections Improve the Quality of Internal Control Audits?, 55 J. Accounting Research 591 (2016) (finding PCAOB Inspections improve the quality of internal control audits); Carol Callaway Dee et al., Do Investors Perceive Improvement in Fair Value Accounting for Investment Assets after PCAOB Inspections?, 36 J. Corp. Accounting & Fin. 49 (2025) (finding investors value inspections regarding level 2 FV assets); Jagan Krishnan et al., PCAOB International Inspections and Audit Quality, 92 Accounting Review 143 (2017) (finding lower abnormal accruals after international inspections began); Nemit Shroff, Real Effects of PCAOB International Inspections, 95 Accounting Review 399 (2020) (finding inspections mitigate financing frictions).
• See generally, Elise J. Bean, Financial Exposure: Carl Levin’s Senate Investigations into Finance and Tax Abuse (2018); Arthur Levitt, Take on the Street: How to Fight for Your Financial Future (2003); Joel Seligman, The Transformation of Wall Street: A History of the Securities and Exchange Commission and Modern Finance (1982).
• Sobel, supra note 6, at 55.
• Press Release, The Royal Swedish Academy of Sciences, The Royal Swedish Academy of Sciences has decided to award the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2025 to Joel Mokyr, Philippe Aghion and Peter Howitt (Oct. 13, 2025), https://perma.cc/78HW-S8GA.

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• Robin Feldman & Kara Stein, AI Governance in the Financial Industry, 27 Stan. J.L. Bus. & Fin. 94 (2022).
• Jake Sigler et al., Putting the IT in AudIT Risk: IT Complexity and IT Auditor Mitigation (unpublished manuscript) (on file with University of Chicago Business Law Review).
• Sherron Watkins & Cynthia Cooper, We Exposed Fraud at Enron and WorldCom: Don’t Let History Repeat Itself, N.Y. Times (May 27, 2025), https://www.nytimes.com/2025/05/27/opinion/enron-worldcom-fraud-pcaob.html.
• Sarah Kessler, When It Comes to Spotting Fake Receipts, It’s A.I. vs. A.I., N.Y. Times (Sept. 8, 2025), https://www.nytimes.com/2025/09/06/business/dealbook/ai-receipts-expense-reports.html.
• See, e.g., Sujeet Indap, Who’s Funding Silicon Valley’s Data-centre Dream? It Might be You, Fin. Times (Nov. 14, 2025), https://www.ft.com/content/30162671-4366-40af-9519-1a02c3f1e1f5.
• See Robert Armstrong & Hakyung Kim, How Leveraged Is the Financial System?, Fin. Times (Dec. 16, 2025), https://www.ft.com/content/c6b62ac1-461b-441f-8540-66570ba4d7d1; see also Nick Dunbar, Dimon Rolls Trading Dice with Excess Capital, Risky Fin. (June 13, 2024), https://perma.cc/7DQP-YNHV.
• For more resources on QC 1000, seeQuality Control, PCAOB, https://perma.cc/NFZ8-REGW (last visited Mar. 30, 2026).
• Amendments Related to Aspects of Designing and Performing Audit Procedures that Involve Technology‑Assisted Analysis of Information in Electronic Form, PCAOB (Oct. 1, 2025), https://perma.cc/22DD-5HZ5.
• See, e.g., Standards and Emerging Issues Advisory Group Meeting, Pub. Co. Acct. Oversight Bd. (Nov. 5, 2025), https://perma.cc/UU5J-7XG2; Investor Advisory Group Meeting, Pub. Co. Acct. Oversight Bd. (Apr. 29, 2025), https://perma.cc/926W-VF99; see also Pub. Co. Acct. Oversight Bd., Spotlight: 2024 Conversations With Audit Committee Chairs (May 2025).
• Michael Ewens et al., Regulatory Costs of Being Public: Evidence from Bunching Estimation, 153 J. Fin. Econ. 103775 (2024); Rongbing Huang, Jay R. Ritter & Donghang Zhang, IPOs and SPACs: Recent Developments, 15 Ann. Rev. Fin. Econ. 595 (2023).
• Elisabeth de Fontenay, The Deregulation of Private Capital and the Decline of the Public Company, 68 Hastings L. J. 445 (2017).
• Colleen Cunningham et al., Killer Acquisitions, 129 J. Pol. Econ. 649 (2021); Ugur Celikyurt et al., Going Public to Acquire? The Acquisition Motive in IPOs, 96 J. Fin. Econ. 345, (2010).
• Marc Jarsulic et al., Toward a Robust Competition Policy, Ctr. for Am. Progress (Apr. 3, 2019), https://perma.cc/B4FM-JZNT.
• Elisabeth de Fontenay & Gabriel Rauterberg, The New Public/Private Equilibrium and the Regulation of Public Companies, 2021 Colum. Bus. L. Rev. 1199 (2021).
• See, e.g., Kara M. Stein, Comm’r, U.S. Sec. & Exch. Comm’n, Remarks before Los Angeles County Bar Association 47th Annual Securities Regulation Seminar (Oct. 24, 2014).
• Cf. Craig M. Lewis & Joshua T. White, Deregulating Innovation Capital: The Effects of the JOBS Act on Biotech Startups, 12 Rev. Corp. Fin. Stud. 240 (2023).
• See Corrie Driebusch, Inside the Stock Market for the Wealthy, Wall St. J. (Dec. 12, 2025), https://www.wsj.com/finance/investing/private-stock-market-growth-bb71bde1.
• Kyla Scanlon, Why My Generation Is Turning to ‘Financial Nihilism’, Wall St. J. (Dec. 19, 2025), https://www.wsj.com/personal-finance/financial-nihilism-gen-z-gambling-meme-stocks-options-kyla-scanlon-7ae4f2aa.
• See, e.g., Accredited Investors, Capital-Raising Building Blocks, Sec. & Exch. Comm’n (Aug. 13, 2025), https://www.sec.gov/resources-small-businesses/capital-raising-building-blocks/accredited-investors. For a more fulsome analysis, see U.S. Sec. & Exch. Comm’n, Review of the “Accredited Investor” Definition under the Dodd-Frank Act (Dec. 14, 2023).
• Hannah Erin Lang & Anne Tergesen, More Working-Class Americans Than Ever Are in the Stock Market, Wall St. J. (Oct. 11, 2025), https://www.wsj.com/personal-finance/stock-market-working-class-investors-1f915b4b?.
• See George R. Botic, Acting Chair, Pub. Co. Acct. Oversight Bd., Like a Sentinel Standing Watch, the Financial Statement Auditor Is Indispensable to the Capital Markets (Dec. 9, 2025) (“While 2025 inspection reports for the six U.S. Global Network Firms remain in process, preliminary results show a decrease in Part I.A findings from 2024. This early data suggests that the efforts by these firms during the past few years are positively impacting audit quality. Additionally, we can now say that preliminary 2025 results for the other annually inspected firms also show a decrease in Part I.A findings.”). See also Erica Y. Williams, Chair, Pub. Co. Acct. Oversight Bd., Remarks at Baruch College’s 23rd Annual Financial Reporting Conference: More than 20 years after Enron, Investors are Better Protected Today Because of the PCAOB (May 1, 2025) (“In 2021, our inspectors began to see an increase in deficiencies known as Part I.A deficiencies across the audit firms we inspect . . . .That trend continued in 2022 and across smaller firms in 2023. . . . And today, I am able to report that our 2024 inspections found significant improvement on average across firms. This includes an expected seven point drop in the aggregate Part I.A deficiency rate across firms inspected, and a six point drop among the four largest firms – which, at the end of last year, collectively audited approximately 80% of the market capitalization of public companies listed on U.S. exchanges.”). See also, e.g., Lewis H. Ferguson, Bd. Member, Pub. Co. Acct. Oversight Bd., Reflections on IFIAR’s 25 Percent Initiative (Dec. 7, 2017).