Friday, December 16, 2005
SEC suits could point the way for Sarbanes-Oxley challenges
As corporate critics of the Sarbanes-Oxley Act weigh whether to pursue a partial easing of the law's accounting requirements through a court challenge, two recent lawsuits filed against the Securities and Exchange Commission (SEC) could serve as models.
Sarbanes-Oxley, passed by Congress in 2002 to boost corporate governance after accounting scandals at WorldCom and Enron, has become a thorn in the side of companies straining to comply with the law's mandate for new internal financial controls. While the SEC has signaled a willingness to consider industry concerns as it implements the law, conservative and corporate opponents of the law may not be willing to wait for the agency to change its ways.
Court challenges to Sarbanes-Oxley will "absolutely" be mounted in 2006, said Mallory Factor, president and CEO of the Free Enterprise Fund. "I'm highly confident. … (The law) puts a criminality on risk-taking, hurts our entrepreneurial spirit, costs us jobs."
Many in the business world agree. Rep. Tom Feeney (R-Fla.), coordinator of a bipartisan Sarbanes-Oxley "listening tour," has heard the suggestion for a judicial remedy to the high cost of the law’s audit requirements, said Feeney spokesman Myal Greene.
posted by Brian Moran @ 10:56 AM