Answer: The Internet and the Sarbanes-Oxley Act of 2002 (SOX)
Question: What two powerful forces are generating a whole new world of liability for companies and their directors and officers?
It is unlikely that this answer-and-question combo will ever appear on the popular TV quiz show "Jeopardy." But the reality is that as the Internet opens pathways to doing business that could scarcely be imagined a decade ago, it also presents increasing dangers to public companies in the form of new liability risks. The instantaneous nature of the Internet can be both boon and bane to companies seeking to harness it to provide information to, and create goodwill with, shareholders. Not only can information be disseminated over the Net in a fraction of a second for worldwide viewing, but it has become a predominant source of investment news. Financial updates, product developments, information tidbits, even rumors -- all are now posted 24/7 on the Web for consumption by anyone, including investors who are poised to take advantage of the latest intelligence.
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