Defining Financial Events of the Past 25 Years

Just 25 years ago, financial markets were grappling with the introduction of the internet to mass consumers. Now, players and regulators alike must pivot to the rise of artificial intelligence. 

Institutions, investors, and consumers have all felt the friction as our old-world economic systems merge with new-age technology and manage new risks. Factor in a global pandemic, and what a wild quarter-century it’s been. 

Investopedia has been taking notes: Here are the most significant events of the last 25 years. 

Gramm-Leach-Bliley Act (1999)

The Gramm-Leach-Bliley Act, also known as the Financial Services Modernization Act, was enacted on November 12, 1999. It regulates the collection and sharing of financial data and mandates that financial institutions implement security programs to protect customers’ financial data. Information falling under the requirement includes addresses, bank account data, birth dates, education level, credit history, employment data, Social Security data, and tax information.

AOL Buys Time Warner (2000)

In one of the biggest media mergers in history, America Online Inc. announced plans to acquire Time Warner Inc. on January 10, 2000. Considered a notoriously hostile takeover of the dot-com boom, the deal had a price tag of $350 billion. It was the biggest merger failure in history.

Dotcom Bubble (2000–2002)

From 1995 to 2000, investments in internet-based companies fueled a rapid—in the case of the Nasdaq index, exponential—rise in U.S. technology stock equity valuations in what is now referred to as the dotcom bubble. But starting in March 2000, it began to enter a bear market. The Nasdaq index, which rose five-fold between 1995 and 2000, tumbled from a peak of 5,048.62 on March 10, 2000, to 1,139.90 on October 4, 2002, a 76.81% fall. It would take 15 years for the Nasdaq to regain its previous high. The crash resulted in a loss of billions of dollars, and several internet companies went bust.

9/11 (2001)

When terrorists attacked America on Sept. 11, 2001, the country had already been suffering a moderate recession following the dot-com bubble. After the attack, stock markets immediately nosedived by 7% in the days after, and almost every economic sector was impacted. The NYSE and the Nasdaq remained closed until Sept. 17—the longest shutdown since 1933—to avoid anticipated market chaos and panic selling. Despite the trauma felt by the nation, markets eventually bounced back to new highs in the following months due to a resilient American economy and stimulus from the federal government. 

Enron Scandal (2001)

Enron, a Houston-based energy trading and utility company, perpetrated one of the biggest accounting frauds in history. Enron’s executives used accounting practices that falsely inflated the company’s revenues and, for a time, made it the seventh-largest corporation in the U.S. The SEC, credit rating agencies, and investment banks, including Deutsche Bank and Citigroup, were also accused of negligence, which enabled the fraud. Once it came to light, Enron quickly unraveled and filed for Chapter 11 bankruptcy in December 2001. Enron’s $63.4 billion bankruptcy was the biggest on record at the time. 

Sarbanes-Oxley Act of 2002 (2002)

After the Enron corporate scandal, the Sarbanes-Oxley Act (SOX) was enacted in July 2002 to restore investors’ confidence in the financial markets and close loopholes that public companies could tap to defraud investors. SOX requires that top managers personally certify the accuracy of financial reports and can face jail time if they knowingly or willfully make a false certification.

The Great Financial Crisis (2007-2009)

The Great Recession was a sharp decline in economic activity that started in 2007 and lasted several years. It is considered the most significant downturn since the Great Depression in the 1930s. Several avoidable factors caused it.

Low interest rates, combined with federal policy to encourage homeownership, helped spark a boom in real estate and a dramatic expansion of the volume of total mortgage debt. Some financial innovations allowed otherwise unqualified borrowers to obtain home loans on generous terms under the assumption that interest rates would stay low. (But they didn’t.)

During the U.S. housing boom, financial institutions sold mortgage-backed securities at unprecedented levels. When the market collapsed in 2007, the securities declined in value, and a credit crisis began unfolding. The solvency of over-leveraged banks and financial institutions hit a breaking point with the collapse of Bear Stearns in March 2008. Later that year, Lehman Brothers, the country’s fourth-largest investment bank, went bankrupt. 

As a result of the Great Recession, the U.S. alone lost more than 8.7 million jobs, doubling the unemployment rate. U.S. households lost roughly $19 trillion in net worth as the stock market plunged.

First Ever Trillion-Dollar Company, PetroChina (2007)

Chinese oil giant PetroChina’s market cap hit $1 trillion on Nov. 5, 2007, following a successful debut on the Shanghai Stock Exchange. The company’s Shanghai-listed shares nearly tripled at the open that day, and its Hong Kong-listed shares, which had debuted years earlier, followed them higher. The rise gave the company a market cap of $1.1 trillion on both the Shanghai and Hong Kong exchanges. However, due to a collapse in oil prices, PetroChina’s market value plummeted to less than $260 billion by the end of 2008, representing the largest destruction of shareholder wealth in world history. 

TARP Program (2008)

The Troubled Asset Relief Program (TARP) was created by the U.S. Treasury to stabilize the country’s financial system, mitigate foreclosures, and restore economic growth after the 2008 financial crisis. It sought to achieve this by purchasing troubled companies’ assets and stock. TARP was signed into law by President George W. Bush on October 3, 2008, with the passage of the Emergency Economic Stabilization Act. From 2008 to 2010, TARP invested $443.5 billion in firms and recouped $425.5 billion in return.

Bernie Madoff Conviction (2009)

Bernie Madoff was a money manager behind one of the largest financial frauds in modern history. His Ponzi scheme, which ran for decades, defrauded thousands of investors out of billions of dollars. 

The former Nasdaq chair attracted investors by claiming to generate large, steady returns through a legitimate trading strategy called split-strike conversion investing. Instead, he deposited client funds into a single bank account to pay existing clients who wanted to cash out. 

The scheme unraveled when the market turned sharply lower in late 2008. On Dec. 10, 2008, he confessed the wrongdoing to his sons, who turned him in. Madoff was arrested on Dec. 11, 2008. He was sentenced to 150 years in prison and ordered to forfeit $170 billion in 2009. Thousands of investors lost their life savings, and as of September 2022, only about $4 billion had been returned to 40,000 victims. 

Rise of FAANG Stocks (2010s)

“FAANG” is an acronym that refers to the stocks of five prominent American tech companies: Meta (formerly known as Facebook), Amazon, Apple, Netflix, and Alphabet (formerly known as Google). FAANG stocks grew rapidly during the mid to late 2010s, becoming increasingly influential in the market. At the end of 2014, FAANG stocks accounted for about 7.4% of the market cap of the S&P 500. By the end of 2019, that share had nearly doubled to 14.4%. 

Flash Crash (2010)

On May 6, 2010, the Dow Jones Industrial Average fell more than 1,000 points in 10 minutes—the biggest drop in history at that point. It was later attributed to Navinder Singh Sarao, a London-based futures trader, who pleaded guilty to attempting to spoof the market by quickly buying and selling hundreds of E-Mini S&P Futures contracts through the CME. 

Facebook IPO (2012)

Facebook held its initial public offering on Friday, May 18, 2012. It was one of history’s biggest and most anticipated IPOs. Facebook shares closed at $38.23 on that day, slightly above the $38.00 IPO price. It raised a record $16 billion through that offering.

SEC Whistleblower Program (2012)

Under the SEC Whistleblower Program, eligible whistleblowers are entitled to an award of 10-30% of the monetary sanctions collected in actions brought by the SEC and other regulatory and law enforcement authorities. It also prohibits retaliation against employees who provide the SEC with information about possible violations.

Robinhood Founded (2013)

Robinhood was founded in April 2013 by Vladimir Tenev and Baiju Bhatt. The duo aimed to design a mobile app that made trading free, easy to use, and addictive. It was the first commission-free stocks and exchange-traded funds service. 

Alibaba IPO (2014)

Alibaba, China’s largest e-commerce and cloud company, went public at $68 a share on September 19, 2014. It raised $25 billion, surpassing Meta Platforms (formerly Facebook) as the largest U.S. IPO in history.

Brexit (2016)

The United Kingdom voted on June 23, 2016, to leave the European Union. The result defied expectations and roiled global markets, causing the British pound to fall to its lowest level against the dollar in 30 years. Negotiations between the U.K. and the E.U. took place from 2017 to 2019. Brexit officially took place at 11 p.m. Greenwich Mean Time on Jan. 31, 2020. 

Wells Fargo Discrimination Suits and Fines (Major Settlements in 2017 and 2020)

In March 2017, regulators discovered illegal and discriminatory credit practices, including creating millions of fraudulent accounts. A report the following month revealed that the bank’s executives were aware of the issues underpinning the fake accounts scandal as far back as 2002. After examining Wells Fargo’s auto loan insurance and mortgage lending practices that impacted over half a million customers, federal regulators ordered the bank to pay $1 billion in damages. 

In February 2020, the company paid $3 billion to settle criminal and civil investigations by the Justice Department and SEC into its aggressive sales practices used between 2002 and 2016. Some $500 million was eventually distributed to investors. 

COVID Crisis (2020-2022)

The COVID-19 coronavirus pandemic both saw and spurred some bizarre financial events that would forever change the global economy. In China, Evergrande, once the world’s most valuable real estate company, failed because of its aggressive lending and excess risk-taking. By 2021, Evergrande’s total liabilities had reached $300 billion, and the cash-strapped company struggled to pay suppliers and retail investors. 

In Egypt, a stranded mega-container vessel named Ever Given in the Suez Canal held up an estimated $400 million an hour in trade, based on the approximate value of goods that are moved through the canal every day. It spurred chaos within an already-strained global supply chain. 

As many remained out of work, the Coronavirus Aid, Relief, and Economic Security Act—nicknamed the CARES Act—appropriated $2.3 trillion for many pandemic-related efforts, including a one-time, direct cash payment of $1,200 per person plus $500 per child.

The effects of the pandemic continued well beyond the reopening of the economy. Concerns and restrictions limited the availability of services, while consumers increased their demand for goods, which suppliers struggled to meet. Shocks to food and energy prices contributed substantially to the sharp rise in inflation from 2020 to 2022.

FTX Implosion (2022)

FTX was a leading centralized cryptocurrency exchange founded in 2018 by tech wunderkind Sam Bankman-Fried. It began unraveling in November 2022 when the company filed for Chapter 11 bankruptcy and announced Bankman-Fried’s resignation on Nov. 11, 2022. In December 2022, Bankman-Fried was extradited from the Bahamas to the U.S., and together with other FTX executives, was arrested and charged for engaging in behaviors that regulators said amounted to fraud and money laundering. The company’s collapse dealt a damaging blow to the crypto industry and removed chunks of liquidity from the market. 

Banking Crisis of 2023

In March 2023, three mid-sized banks—Silicon Valley Bank, Signature Bank, and First Republic—failed abruptly, marking the biggest bank failures in American history only behind that of Washington Mutual amid the 2008 financial crisis. The SVB fall triggered U.S. history’s largest single-day bank run. This led to aggressive action by the Federal Reserve, the Treasury Department, and the FDIC to prevent spillovers to the rest of the U.S. banking system. 

Rise of Magnificent Seven (2023)

“The Magnificent Seven” describes the tech giants carrying the S&P 500 Index: Apple, Amazon, Alphabet, NVIDIA, Meta, Microsoft, and Tesla. Together, those seven stocks were up around 70% year to date by late 2023. 

Launch of Bitcoin ETFs (2024)

On January 10, 2024, the SEC approved the first 11 Bitcoin spot electronically traded funds (ETFs), which hold Bitcoins in a secure digital vault that registered custodians manage. While several countries have embraced the concept, the U.S. initially hesitated due to concerns over market manipulation and custodial risk. 

Frequently Asked Questions (FAQs)

The Bottom Line

Over the past 25 years, we’ve witnessed significant shifts in industry power, market contractions, global conflicts, and transformative regulations, all alongside rapid technological innovations. Each year brings new advancements and challenges, shaping the world in complex ways. As we navigate these changes together, Investopedia is committed to providing the support and insights you need to thrive in an ever-evolving financial landscape.