Why I thought the arrival of the Securities and Exchange Commission's risk-based guidelines for Sarbanes-Oxley implementation would mean less fuss in the press on the issue, I don't know, but that's beside the point. The fact is, I was wrong.
2008 presidential candidate Ron Paul (R-Texas) would vote against the corporate reform law now just like he did in 2002, if given the chance; tech journalist John Dvorak says it should be repealed because it's stifling innovation in the tech industry. And last Wednesday, Congressman Ed Royce (R-Cal.) added his voice to the plea with an article in The Hill.
Pointing to the Korean National Assembly's decision to "overhaul of their country's financial system, with the intention of making Seoul an international financial hub," Royce says lawmakers and business leaders need to work harder to maintain the United States' place in the financial world. He argues that studies like the Bloomberg-Schumer report and legislation like the Private Securities Litigation Reform Act are good first steps, but they're not enough:
When companies are allocating millions of dollars funding reporting requirements and protecting against frivolous lawsuits[,] they respond by becoming more risk-averse or by looking for alternative markets at home or abroad. This is suggested by the fact that only two of the largest 20 global initial public offerings (IPOs) last year went public in the United States, compared to nine in 2000 and 12 in 2001. Additionally, in recent years we have seen a rapid increase in both public to private buyouts and private placements, further suggesting an evasion of our public markets.
If we hope to reverse this trend and remain the market of choice for the world's public companies, we must begin to implement legislative and regulatory changes...
The questions he doesn't answer are the ones I wish he had. What legislative and regulatory changes would Royce make, beyond what's already in process? Does he want repeal, or just serious reform? If the latter, what would that reform look like?