The criticisms leveled at Sarbanes-Oxley illustrate exactly why we should keep it.
Political sentiment runs in predictable cycles. In the midst of the stock-market bubble, no one cared about regulation and oversight. Everyone was making too much money to bother.
Then the money machine stopped, companies such as Enron and WorldCom blew up with their spectacular accounting frauds, and everyone was screaming for blood. A few perp walks and one big legislative package later, we entered the Sarbanes-Oxley era.
The avalanche of multibillion-dollar corporate implosions stopped. Many companies are still sorting out the impact of realistic options expensing going back several years, but the shakeout from that exercise is almost over.
What are we left with? A much fairer playing field for the individual investor, that’s what. Between Sarbanes-Oxley shoring up the integrity of company accounts and Regulation Fair Disclosure (better known as Reg FD) limiting leaks of inside information, the market is a better place to invest in than it was in summer 2000, by far.
