Thursday morning I wrote about final action on the Senate's financial regulatory reform bill being delayed. Three more votes would have gotten Senate Democrats the 60 votes they needed to end debate on the bill.
With the votes so close, there's little doubt the measure will eventually pass, but the delay gives stakeholders more time to lobby for or against the amendments to, or other portions of, the bill they about which they feel strongly. The Center for Audit Quality and the Council of Institutional Investors are taking advantage of the opportunity.
In a letter to lawmakers, the groups urge defeat of amendments proposed by Sens. David Vitter, R-La., and Kay Bailey Hutchinson, R-Texas, that would exempt small public companies from Sarbanes-Oxley section 404(b) compliance requirements. They write:
Senator Vitter's amendment would permanently waive compliance for non-accelerated filers (companies with market capitalization of less than $75 million), resulting in little independent scrutiny of financial reporting safeguards at half of all listed companies...Senator Hutchison's amendment would go even further, by extending the exemption to companies with market capitalization of $150 million...
They argue that rolling back 404(b) compliance requirements for smaller companies would put investors in those companies "at a distinct disadvantage." They also note that smaller companies are no less at risk for fraud than their large enterprise counterparts.