A Possible Problem with Sarbanes-Oxley Is That in Worsens the Free-Rider

question 11

True/False

A possible problem with Sarbanes-Oxley is that in worsens the free-rider problem for financial intermediaries.

---

Definitions:

Unsecured Claims

Claims or debts that are not backed by collateral, meaning if the debtor defaults, the creditor does not have a right to seize specific property to satisfy the debt.

Exempt Property

Property that a debtor is allowed to retain, free from the claims of creditors seeking to repossess or sell the property for debt recovery.

Chapter 7 Bankruptcy

A liquidation form of bankruptcy available to individuals and businesses, resulting in the sale of non-exempt assets to pay creditors and discharge most debts.

Equity

The fair and impartial treatment in justice or the value of ownership interest in a property after debts are subtracted.