The Role of Capital Market Intermediaries in the Dot-Com Crash of 2000

This is a case about the Dot-Com stocks that rose in price to overvaluation and then subsequently fell as the bubble burst.

1) Identify all of the major players that play an intermediation role between individual investors and entrepreneurs/managers. What is the intended function of each of these intermediaries?

2) How is each of the intermediaries that you identified compensated for performing its respective function? Is the compensation arrangement likely to lead to any dysfunctional incentives? Please explain.

3) Identify the role that each intermediary might have played in the creation of the Dot-Com bubble. Was this behavior related to the potential dysfunctional behavior identified in question 2?

4) What would you recommend to fix the underlying problems of this case?