Friday, July 8, 2005

The Sarbanes-Oxley Pushback Continues

A Financial Times story (here) notes that Rep. Michael Oxley, one-half of the Sarbanes-Oxley duo after whom the corporate and securities reform act is named, asserted that some provisions of the law are "excessive" and the law was passed in a "hot-house atmosphere."  That said, Rep. Oxley concludes that there is little chance any of the major provisions will be changed, even those that have burdened small and mid-sized companies: "Congress will not re-visit this issue. The SEC reform [on smaller companies] is not going to happen either."  The article also notes the comments earlier this week by Delaware Vice-Chancellor Leo Strine criticizing the Sarbanes-Oxley Act for interfering in state corporate law and Rep. Oxley's response that leaving corporate reform to the states is "rather quaint."  Does anyone see a turf battle going on here?  The tension between state regulation, which leaves most individual corporate regulatory efforts to private shareholder lawsuits, and the federal approach that relies on the SEC to police larger corporations through the securities laws makes for a fragmented, and often politicized, approach.  (ph)

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