Maybe. On behalf of the Free Enterprise Fund, Mr. Starr is challenging the burdensome and tyrannical Sarbanes-Oxley Act. Of course, the Public Company Accounting Oversight Board is an absolute monster given that it has the powers of subpoena and disciplinary action. Starr & Company are challenging the powers of this board as a violation of “the Constitution’s mandated separation of powers among the three branches of government.”
Sarbanes is especially impossible to commit to for smaller public companies, which usually don’t have the manpower, skillsets, or knowledge base – within its intellectual capital – to conform to and maintain compliance with Sarbanes. (Thus making consulting firms very profitable.) An especially telling moment that is consistent with clueless, powermongering bureaucrats comes from this piece at Seattlepi.com:
An advisory committee appointed by the SEC formally proposed this week that the agency exempt smaller companies from the requirement – a move that would affect about 70 percent of all public companies in the United States.
SEC Chairman Christopher Cox, in appearances before Congress this week, reaffirmed his position that the goal should be to make the internal-controls requirement work so that it can apply to companies of all sizes.
“There ought to be a way to make this work,” Cox said in testimony before the Senate Banking Committee.
“There ought to be a way.” These bureaucrats are unabashedly authoritarian, and reality be damned.
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I hate to burst your bubble but Kenny boy sold his soul to the dark side years ago and any
semblance to heroic is nothing more then him taking that poor group to the cleaners. Why is it people say talk is cheap and then turn around and pay hot air artist like Star major greenbacks is beyond me. When’s the last time he won a case?
Perhaps we should have made him Attorney General…
Yes, he has some problems, but considering who currently holds that position, I think Mr. Starr would be a vast improvement (as would many people) over Mr. Gonzo.
I noted on another thread that state corporate law is being federalized through the Sarbanes-Oxley law, which (i) has imposed onerous and expensive burdens on all corporations that publicly issue securities in the US and (ii) rolled out further federal regulation to the accounting industry – ironically after the Supreme Court held that federal prosecutors illegally destroyed Arthur Anderson over wrong-doing by a few who were involved in whitewashing Enron’s books.
This law may be well-motivated, but it is choking off financing and entrepreneurship, and further entrenching corporate statism.
Perversely, this law may have some positive effects, as it is leading a number of firms to go private, and leading others to avoid issuing securities publicly. This means there will be an increase in entrepreneurial firms that are less regulated by the federal government.
The SEC, SOX, and statement “There ought to be a way to make this work,” all bind up into a simple notion for me – the bigger the entity, the impossibility of comprehension. There is no such thing (yet) as collective comprehension. Understanding is a finite exercise with the individual as the largest component engaged in it. The thought that anyone can express an opinion on super-entities is ludicrous to me. I have never been able to understand how any attest opinion can be given on huge corporations, much less policed. The whole exercise of audits of super-large corporations, endless filings with the SEC, and now SOX and the Public Company Accounting Oversight Board are just more attempts to delude investors (i.e. those forced to abate tax theft by pushing their earnings into government sanctioned mutual funds) that their money and equity is safe.
If someone wants to put their money into an entity for a super-fractional share without ever having any REAL understanding of what their equity represents, so be it. Perhaps if the reality of caveat emptor were applied, and an honest portrayal of the action given, that it is a form of gambling, then maybe individuals would be prepared to build true equity instead of being pawns in the “credit as economic policy”, multi-faceted ponzi scheme we have now.
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