08 March 2007

But if you wait for all the facts to come in, you might miss the lynching.

Observers have said for years that the Sarbanes-Oxley Act probably would have been written differently had lawmakers thought through the financial and other implications of the act rather than allowing themselves to be swept away in post-Enron/WorldCom hysteria. Admitting as much now is former Representative Michael Oxley (from the International Herald Tribune, via Professor Bainbridge):
Was Oxley aware, his questioners asked, that the law that he and Senator Paul Sarbanes, a Maryland Democrat, rushed onto the books five years ago after the collapse of Enron and WorldCom had contributed to a sharp decline in listings on U.S. stock exchanges? And, knowing what he knows now about the cost and effects of the law, would Oxley — who retired in January after 25 years in Congress — have done it any differently?

"Absolutely," Oxley answered. "Frankly, I would have written it differently, and he would have written it differently," he added, referring to Sarbanes. "But it was not normal times."

Professor Marc Hodak, commenting on Bainbridge's site, noted that he had recently given a presentation to international executives: "There I claimed that the only two people left who did not think SOX was a debacle were named Mr. Sarbanes and Mr. Oxley. I guess I have to modify that portion of my talk!"

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