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Does Anyone Like Sarbanes-Oxley? Anyone?

Sarbanes-Oxley may never work its way into the hearts and minds of Wall Street. The regulation came under attack yet again today (see earlier post on Mayor Michael Bloomberg and NYC's financial services) as a reason New York City and the U.S. are losing their financial edge to cities like London. The complaint is the 2002 law is too much and too costly to obey. And that's driving IPOs, hedge funds and the like to other places that DON'T have the same rules.

Who does like SarbOx? (see below on investors) James Post does. He's a professor of corporate governance and ethics at Boston University's School of Management. But William Niskanen is one of those who hates it. He's from the Cato Institute. Both men appeared on "Morning Call."

Post believes SarbOx contributes to the overall integrity of the markets and he says the U.S. has had a number one ranking as a place for financial dealings because it has regulations.

Niskanan just thinks SarbOx is bad--and says if the WorldCom collapse hadn't happened--there would be no SarbOx at all. He thinks the U.S. is going to continue to lose out to places like London--as long as we keep SarBox around.

Post says yes--there are some rules in the law that need to be changed and that the SEC is looking into minimizing certain costs for small businesses--but he says "are we in a race to the top or to the bottom," when it comes to the financial industry. He says SarBox keeps things at the top.

Investors: they seem to like SarbOx according to a story in the latest edition of BusinessWeek.The magazine's article says the law's regulations and reforms have produced more reliable corporate financial statements and that's boosted investor confidence--saying SarbOx has been a "godsend" for investors. Article writer David Henry says beefed-up disclosure requirements have meant that companies now deliver numbers with fewer adjustments for unusual charges and write-offs-which had been used in the past to make earnings look better (though Henry writes-investors can't trust the 'reformed' numbers implicitly).

In the end--most analysts agree that -SarbOx will be reformed. It's just a matter of which parts.