Cheney: U.S. Sarbanes-Oxley rules may be excessive

[sabra]

http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2006-10-30T184510Z_01_WBT006135_RTRIDST_0_FINANCIAL-REFORMS-CHENEY-URGENT.XML

Cheney: U.S. Sarbanes-Oxley rules may be excessive

WASHINGTON, Oct 30 (Reuters) - U.S. Vice President Dick Cheney said on Monday that the 2002 Sarbanes-Oxley corporate reform law may have gone too far with regulations that many business consider onerous and costly.

"I think you can make a case that Sarbanes-Oxley went too far," Cheney said on the CNBC television program, Kudlow and Company.

[gratuitous]

1. So, just ignore the law

You've done it before, you seem resolved to keep doing it. No sense haggling with those other, lesser branches of government. Just overrule the Congress and the Courts by Executive fiat. We're at war now, and 9/11 changed everything.

[SharonAnn]

26. That's Cheny for you. How predicatable.

[liberal N proud]

2. WOW, that has to be the first thing that I have agreed with this Dick on

The regulations for business is nearly impossible and the cost is through the roof.

[Kagemusha]

4. I'm sure some aspects are excessive

and others are pretty darn vital - and those are the ones Cheney really wants gone.

[liberal N proud]

11. Of course he wants to strip it down to allow them to violate the very

reason it was put in place. They never have any motive but for themselves and their cronies.

[Jacobin]

8. These apply to publicly traded companies

What Cheney doesn't like is the CEO having to attest to the financial statements. Makes it harder for them to play dumb after they cook the books to ramp up their stock options.

[grizmaster]

45. especially when he has international charges hanging against him

for his shenanigans in Nigeria when he ran Halliburton

[Turn CO Blue]

21. I was going to post the same thing! First time I ever agreed

with Darth Cheney.

SOX had no idea of the idiotic implications their law was going to cause. Complete turmoil in the IT departments and ridiculous mountains of red tape.

[undeterred]

46. Yup. It shakes my whole world to agree with him.

[SharonAnn]

33. Some companies where I implemented it, really, really needed it.

There financial accounting was so lacking, that people could have been stealing for meny years and never be caught. In straightening that out, one had to put every process through changes for auditability. Sometimes it was overkill, but on others where it appeared to be too much, I showed a questioning manager how someone could've rigged the accounting to get themselves a HUGE bonus and no one would've known what had been done that financially damaged the company but personally benefited the individual.

From what I've seen, the reason it's not liked is because it's strict. And thank God that it is. We need even more teeth in Sarbanes-Oxley, not less. Remember, if they steal, they're stealing it from you even if you don't own stock in that company. It will still end up costing you as the money is deverted from the overall economy to individual pockets.

[Yupster]

42. Good for employment though

Our company has hired a whole department of people to just comply with Sarbanes-Oxley.

We're always saying not to grumble about regulation -- that it's our competitive advantage because we try to go a step further than what's required., but even we're complaining about this one.

[AngryAmish]

47. NYSE hates it

Many companies refuse to issue stock on American exchanges because of the rules. London and Hong Kong love it, I'm told.

[Bozita]

3. CFO of pharma corp resigns abruptly -- another headline today

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x2586876

[Nickster]

5. The head of the SEC just said the same thing not to long ago. n/t

[cosmicdot]

15. Republican corporate crony Chris Cox?

not surprising to hear that he did

[Nickster]

16. Right. But when you hear all of them saying the same thing, you know that

they really mean to get rid of SOX.

[kurth]

6. One word: Enron

[LordLovesAWorkingMan]

34. Another word: onerous

Just because a company is publicly traded doesn't make it a cash cow. Depending on the auditing firm and the nature of the business, entire compliance divisions have to be hired and set up. Those compliance folks typically have nothing to do with the actual business, but they do oversee adherence to "controls" that are sometimes difficult to follow.

The parts where the CEO and CFO sign their life away is the part we need to keep. The part where the only people making money are the consultants needs to be gutted.

And don't assume that the compliance consultants and auditors aren't sometimes in cahoots!

[grizmaster]

41. If SOX is being followed properly

then the consultants and auditors can have no finacial connections and you have to switch auditors every 5 years or less to minimize them get too cozy.

[LordLovesAWorkingMan]

43. Heh

That would be ideal, but it doesn't always happen. I like SOX, I think it makes sense, but I've seen some wacky, wacky controls set up.

[grizmaster]

44. I have too

but if the controls are wacky that means the system the control is supposed to keep tabs on isn't set up in a sensible way (from an accountants standpoint that is. which I admit isn't the same kind of sensibilty most think of. just started working towards my CPA)

[grizmaster]

7. If anything Sarbanes Oxley didn't go far enough

Being able to hold CEO's criminally responsible for their actions is clearly necessary.

And you can tell it's working because of all the companies restating financials (especially options). This has put these businesses back on more realistic numbers and provides greater transparency and dependability of the financials so investors can make proper investment decisions.

[lumpy]

9. Isn't the purpose of the SOX to discourage

companies from hiding costs, expenditures, audits from investors. Sounds like regulations that prevent corps. from 'under the table' dealings and financial manipulation is a step toward fair business practices.

[grizmaster]

12. SOX does deal with how financials are prepared

but what gives it teeth is the enforcement aspects.

Under SOX you basically have to have a separate auditing of how you keep your books that runs parallel to your regular accpounting system and when the audit report is prepared and the financials are published the executive officers have to sign that the numbers are legit.

And yes, I agree. Greater transparency means investors are putting their money in more sound corporations which is better for the economy than having investment dollars end up in the hands of crooks such as Ken Lay.

[snooper2]

20. There is some of that, but a lot of crap in SOX

(I work for a telecom company)...they added all kinds of shit. For example, reviewing security procedures for data center access from the common area.

[katamaran]

29. It kept me from getting my raise for three months

It kept me from getting my raise for three months. I got promoted earlier this year from peon to lower management peon. The promotion brought a 27% raise with it. It took three full months for the raise to get approved because of SOX. Five people at my TV station had to approve it, and then five more at the corporate headquarters in Dallas. Apparently, anything over a 7% raise has to be approved by every single person above you as per company policy. The thing that held it up was that guy #1 was on vacation, then when he came back, he sent it to guy #2. When it got to guy #4, guy #5 was on vacation, and guys #6 & 7 were also out when it got to them, so it had to wait. I literally hit the perfect storm of manager vacations. My promotion raised all sorts of red flags because it was the biggest pay raise anyone had gotten at our station in three years (percentage wise, sure as hell not dollar wise).

It was nice to get that $2600 retro check though.

[grizmaster]

39. It's not SOX fault your management is incompetent.

them blaming SOX is pure horse manure

[grizmaster]

40. anyplace someone can access and change numbers

is a place for possible fraud.

Just imagine if our voting machines were exposed to that kind of unimpaired access to altering numbers...


...oops, guess that doesn't take much imagination.


Point is that any place the books can be altered without authorization and oversight opens up the possiblity of fraud. It's good for business in general and a business in particular to plug up vulnerablities in their bookkeeping practices.

[rodeodance]

10. buckshot man does not live audits/oversite. simple as that.

[VegasWolf]

13. Ah ha! Some Halliburton exec's must be feeling a little pressure from the feds. nt

[Bozita]

14. oooh, look at this! Yesterday's NYT gave cover to Cheney

Can you say, "orchestrated," boys and girls?

I knew you could.



http://www.nytimes.com/2006/10/29/business/29corporate.html

October 29, 2006

Businesses Seek Protection on Legal Front
By STEPHEN LABATON

WASHINGTON, Oct. 28 — Frustrated with laws and regulations that have made companies and accounting firms more open to lawsuits from investors and the government, corporate America — with the encouragement of the Bush administration — is preparing to fight back.

Now that corruption cases like Enron and WorldCom are falling out of the news, two influential industry groups with close ties to administration officials are hoping to swing the regulatory pendulum in the opposite direction. The groups are drafting proposals to provide broad new protections to corporations and accounting firms from criminal cases brought by federal and state prosecutors as well as a stronger shield against civil lawsuits from investors.

Although the details are still being worked out, the groups’ proposals aim to limit the liability of accounting firms for the work they do on behalf of clients, to force prosecutors to target individual wrongdoers rather than entire companies, and to scale back shareholder lawsuits.

The groups hope to reduce what they see as some burdens imposed by the Sarbanes-Oxley Act, landmark post-Enron legislation adopted in 2002. The law, which placed significant new auditing and governance requirements on companies, gave broad discretion for interpretation to the Securities and Exchange Commission. The groups are also interested in rolling back rules and policies that have been on the books for decades.

more...

[MGKrebs]

38. Ah, tort reform for the Fortune 500!

Just what is needed, seeing as how corporate profits are down.

Oh, wait...

[jljamison]

17. even a blind squirrel occasionally finds a nut

it certainly has driven compliance costs way up for everybody, even though it really is a few bad apples that need to be rooted out. I have heard of companies who have gone public on the london stock exchange rather than NYSE or NASDAQ because of, and for no other reason than, Sarbannes-Oxley. Is it the highest priority problem? No.

[WCGreen]

18. that is what happens when you govern as a reactionary...

and demonize those who wish to think and offer progress...

[Supersedeas]

19. Freedom to Halliburton and Enron the accounts??

[lovuian]

22. If they take out Sarbanes oxley all money will leave the

stock Market I won't invest in corrupt companies like Enron

[IndianaGreen]

23. Translation: No accountability on financial statements

Let the corporate boards bilk investors to their hearts' content, and let accounting firms adopt the corrupt accounting practices of the likes of Arthur Andersen.

The Public Company Accounting Reform and Investor Protection Act, known as “Sarbanes-Oxley Act”, was passed in 2002 following a series of corporate bankruptcies and allegations of executive management malfeasance, most notably Enron and WorldCom. The regulation of securities had not been this significantly altered since the securities legislation passed between 1933 and 1940 following the 1929 stock market crash. Sarbanes-Oxley Act (SOX) substantially alters the requirements of a firm that is publicly traded in the United States. The prior legislation placed mandatory disclosure and audit requirements on publicly traded firms and greater demands on firms involved in investment management. SOX changed the role and regulation of audit firms, the composition and conduct of corporate boards and expanded audit and disclosure requirements.

http://www.caseplace.org/collections/collections_show.htm?doc_id=375824

[zara]

24. It does require CEOs not to lie cheat and steal!

That would have crimped Mr. Cheney's style for certain!

[lumpy]

27. Kick

Is there any doubt that the GOP corporate pigs are against regulation ?

[TheFarseer]

25. this is actually true

some of it is just non-sense. I think alot of it misses the point in fighting corporate corruption. If you've ever done accounting for a large company, you would most likely agree with me.

[tom22]

28. This is a big item on next

year's Rep agenda. A lot of money is being raised by a lot of lobyists, particularly from accounting firms to repeal much of the Sarbanes law.

[MUSTANG_2004]

51. Not just accounting. It's IT as well.

The IT requirements are very difficult and/or expensive for the smaller public companies to conform to. Sarbanes-Oxley is about far more than the CFO signing off on the financial statements. It regulates at a very low level how companies implement IT projects and grant user access to the applications. It may be fine for large companies, but not the small ones with just 2-3 people in the IT department.

[GETPLANING]

30. Sarbanes-Oxley leveled the playing field

for retail investors. Before Sarbabnes-Oxley, insiders and industry professionals were able to have an inside track to company earnings and guidance, leaving retail and independent investors to lose their asses chasing stock prices.
Naturally, Dick Cheney is in favor of squeezing out the little people.

[BadgerKid]

31. Brokerage house transparency is overdue.

You can have the "investment" branch say one thing (rate as buy/sell) while the "research" branch takes contrary action (sell/buy). This kind of insider communication was made illegal, but at times I have my doubts that it's being followed.

[conscious evolution]

32. This story is a counter-move

by bfee to try to cover their asses from the soon to come shit storm.

Read the Ides of October and CorpGovActivist threads on the State Street bank and Halliburton Whistle blowers.

[eppur_se_muova]

35. "I think you could make the case that monkeys might fly out of my butt at any time."

Equally credible.

[trogdor]

36. I think you can make a case that Dick Cheney buggers cats.

It would be a weak case (cats have claws and usually aren't afraid to use them), but you could certainly make it.

[goforit]

37. Hmmm.... Reaping billions is just not enough, eh Dick?

[54anickel]

48. My guess is that NY loosing it's "World Financial Capital" might have

him a bit concerned and looking for reasons.

http://www.nytimes.com/2006/10/27/business/worldbusiness/27london.html?_r=2&adxnnl=1&oref=slogin&ref=business&adxnnlx=1161973202-GzwtzOwJJZolpgWV6+qX+g&oref=slogin

snip>

London, whose lord mayor, David Brewer, made the summertime boast at the city’s annual merchants and bankers dinner, has had a heady resurgence in banking and lending. In recent years, its stock market has attracted a growing number of companies that once would have sought to list in the United States. And London is drawing an increasing tide of hedge fund assets.

Other financial centers are growing, too: Chicago will be the home of the world’s largest derivatives market when the Chicago Mercantile Exchange and the Chicago Board of Trade merge, while Hong Kong is poised to be the biggest market for initial public offerings this year, with today’s pricing of the huge offering of the Industrial and Commercial Bank of China.

The possibility that New York is losing ground has raised alarms in Washington and in Mr. Bloomberg’s office.

“There’s a genuine recognition that we need to make some changes,” said Laure Aubuchon, head of international business development for the New York City Economic Development Corporation. Winning financial business is “so important to New York City,” she said. The financial services industry makes up 9 percent of the city’s work force and provides 31 percent of the tax base, she said.

snip>

Beyond its location, London is attracting investors and companies because of a perception that regulatory scrutiny is more burdensome in the United States than in London. At the same time, while London does not use the euro, that common currency has helped bring depth to the capital markets of Europe, benefiting London.

more...

[Stockholm]

49. I take back everything bad I have ever said about the Act

I now officially love Sarbanes-Oxley.

[Marie26]

50. Cheney's upset

That now the corporate Halliburton lawyers can tell on him. Better get shredding!

[colorado_ufo]

52. Could it be?

Is it possible that there is SOMETHING we agree on? My head is going to explode!