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Goodbye to Reforms of 2002
Key Excerpts from Article on Website of New York Times
Posted: November 16th, 2009
http://www.nytimes.com/2009/11/06/business/06norris.html
It took just five weeks after the WorldCom accounting scandal erupted in 2002 for Congress to pass ... the Sarbanes-Oxley Act. That law required public companies to make sure their internal controls against fraud were not full of holes. Sarbanes-Oxley was passed, almost unanimously, by a Republican-controlled House and a Democratic-controlled Senate. Now a Democratic Congress is gutting it with the apparent approval of the Obama administration. The House Financial Services Committee this week approved an amendment to the Investor Protection Act of 2009 a name George Orwell would appreciate to allow most companies to never comply with the law, and mandating a study to see whether it would be a good idea to exempt additional ones as well. Some veterans of past reform efforts were left sputtering with rage. That the Democratic Party is the vehicle for overturning the most pro-investor legislation in the past 25 years is deeply disturbing, said Arthur Levitt, a Democrat who was chairman of the Securities and Exchange Commission under President Bill Clinton. There are other threats to Sarbanes-Oxley as well. The law set up a long-overdue system of regulating the accounting industry, which had proved time and again that it was incapable of effective self-regulation. The Public Company Accounting Oversight Board has done a credible job, but a month from now the Supreme Court will hear a case that could drive it out of existence.
Note: For a treasure trove of revealing reports from reliable sources on the realities behind the Wall Street collapse and bailout, click here.
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