Economic Cost of Sarbanes-Oxley

An interesting problem associated with all the new regulations being targeted at publicly traded companies is that profitable private companies, no matter small or big, will not want to deal with the regulators in this scale.

So, in case they need to expand, as oppose to going public, they will more likely go with private investments ...
 
Quote from Lawrence Chan:

An interesting problem associated with all the new regulations being targeted at publicly traded companies is that profitable private companies, no matter small or big, will not want to deal with the regulators in this scale.

So, in case they need to expand, as oppose to going public, they will more likely go with private investments ...
More...

Sarbanes-Oxley requires reporting designed to reduce the kind of fraud that was endemic - not just limited to Enron - in recent years. THe Big Red Tape argument won't help here. It is a reactive measure, just like the Securities and Exchange Acts of 1933-34 were. If our corporate executives weren't so interested in using the capital markets to line thier pockets and cheat the masses, there would be no SarOx. THe costs to the public through fraud, earnings manipulation, has been in the 100s of billions. SarOx is a drop in this bucket.

They'll go private, re-package, then go public. That's how they'll rip everyone off again.

By the way, I would amend the Sarbanes-Oxley Act to post web photos of Dennis Kozlowski and Mark Schwartz in jail during thier prison terms, unblemished and unedited, even if it means showing them getting gang raped. Now that will scare our white collar thieves straight.
 
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