{"id":1002,"date":"2009-11-09T07:00:29","date_gmt":"2009-11-09T15:00:29","guid":{"rendered":"http:\/\/www.formtek.com\/blog\/?p=1002"},"modified":"2009-11-09T07:00:29","modified_gmt":"2009-11-09T15:00:29","slug":"compliance-surprise-regulations-are-gutted","status":"publish","type":"post","link":"https:\/\/formtek.com\/blog\/compliance-surprise-regulations-are-gutted\/","title":{"rendered":"Compliance: Surprise! Regulations may be gutted"},"content":{"rendered":"

In 2002 in the wake of the Enron and WorldCom scandals Congress took only five weeks to draft the strict reporting and audit requirements of Sarbanes-Oxley.\u00a0 Since the fall of 2008 we have witnessed more than 119 bank failures and the collapse or near-collapse of huge companies like Lehman Brothers and AIG.\u00a0 Most people have anticipated that these financial problems would result in even stronger and more rigid regulations and controls to be adopted, so as to avoid this type of problem again.<\/p>\n

But the House Financial Services Committee raised eyebrows last week<\/a>.\u00a0 They approved an amendment to the Investor Protection Act of 2009 which exempts those companies worth less than $75 million, and calls for another study on whether companies worth less than $250 million should be allowed to stop complying with the law.\u00a0 The change was promoted by the White House chief of staff, Rahm Emanuel.<\/p>\n

But the change faces significant obstacles in the Senate.<\/p>\n

\u201cThat the Democratic Party is the vehicle for overturning the most pro-investor legislation in the past 25 years is deeply disturbing,\u201d said Arthur Levitt, a Democrat who was chairman of the Securities and Exchange Commission under President Bill Clinton. \u201cAnyone who votes for this will bear the investors\u2019 mark of Cain.\u201d<\/p>\n

The Democrats were well-intentioned in trying to make this change.\u00a0 Their argument is that the reporting and auditing regulations have been burdensome to small companies and that foreign companies have avoided listing in the US because of the costs of compliance.<\/p>\n

\u201cThe supporters of this amendment, including apparently the White House, have suggested that weakening protections against accounting fraud is justified in order to promote job growth,\u201d said Barbara Roper, director of investor protection at the Consumer Federation of America. \u201cThat is precisely the sort of thinking that landed us in the current mess and precisely the sort of thinking Democrats criticized when they were blaming Republicans for the current financial crisis.\u201d<\/p>\n

It will be interesting to see what direction regulatory compliance takes over the next year.<\/p>\n

<\/p>\n
<\/p>\n
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In 2002 in the wake of the Enron and WorldCom scandals Congress took only five weeks to draft the strict reporting and audit requirements of Sarbanes-Oxley.\u00a0 Since the fall of 2008 we have witnessed more than 119 bank failures and…<\/span><\/p>\n

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<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[],"class_list":["post-1002","post","type-post","status-publish","format-standard","hentry","category-compliance"],"_links":{"self":[{"href":"https:\/\/formtek.com\/blog\/wp-json\/wp\/v2\/posts\/1002","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/formtek.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/formtek.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/formtek.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/formtek.com\/blog\/wp-json\/wp\/v2\/comments?post=1002"}],"version-history":[{"count":0,"href":"https:\/\/formtek.com\/blog\/wp-json\/wp\/v2\/posts\/1002\/revisions"}],"wp:attachment":[{"href":"https:\/\/formtek.com\/blog\/wp-json\/wp\/v2\/media?parent=1002"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/formtek.com\/blog\/wp-json\/wp\/v2\/categories?post=1002"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/formtek.com\/blog\/wp-json\/wp\/v2\/tags?post=1002"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}