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Thursday, February 23, 2006

Former SEC Chairmen Soundoff

The Sarbanes-Oxley Act also stirred up considerable debate. Levitt said he opposes plans that would indefinitely impose different Sarbanes-Oxley standards on companies, depending on their size. "These are public companies that passed a threshold," he asserted, adding that investors in a small company that fails should enjoy the same protections as large-company investors.

Donaldson noted that while Sarbox's benefits are substantial, initial compliance with the law was flawed. "We told Corporate America, you do not have to count paper clips," he noted, adding that he expects compliance costs to decline and companies to start applying the law more intelligently.

Breeden amused the audience when he took note of the corporate whining about the costs of implementing Sarbanes-Oxley, particularly the section concerning internal control over financial reporting. "The problem is not the law, but the application of it," he said. "The cost of Section 404 is one ten-millionth of executive compensation, but I do not hear people saying, get rid of executive compensation."

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