Financial Meltdowns Triggered by Fraud. In the early 2000s, the US. business economy was significantly impacted by fraud scandals that involved senior exec- utives at a number of major corporations. Lawmakers felt that the scope of the crimes undermined the public's confidence in the country's financial systems and markets. A number of laws were passed that heightened the legal responsibilities of corporate management to actively guard against fraud by employees, estab- lished stricter management and reporting requirements. and introduced severe penalties for failure to comply. As a result, fraud management became a neces- sary functional process. These frauds played a role in the SEC's mandate for XBRL data reporting,