Criticism of Sarbanes Oxley
- An election year is not proper to overhaul a complicated area like securities regulation.
- Simply follows headlines from Enron and others with little appreciation for systemic problems
- The efforts of SEC and other SROs is not taken into account by Congress.
- Little appreciation for markets` response to the scandals.
- Many provisions are simply delegations of authority to the SEC to adopt rules, some of them involve the SEC or the other SROs had already undertaken rulemaking initiatives.
- May cause long-term systemic harm to the competitiveness of US capital markets
These regulations are damaging American capital markets by providing an incentive for small US firms and foreign firms to deregister from US stock exchanges.
Detractors such as Congressman Ron Paul contend that SOX was an unnecessary and costly government intrusion into corporate management that places U.S. corporations at a competitive disadvantage with foreign firms, driving businesses out of the United States. In an April 14, 2005 speech before the U.S. House of Representatives,
The number of American companies deregistering from public stock exchanges nearly tripled during the year after Sarbanes-Oxley became law, while the New York Stock Exchange had only 10 new foreign listings in all of 2004.
A study by the Wharton Business School,
Popularity: 41% [?]
