Sarbanes-Oxley, a law to supposedly protect investors, is having the opposite effect. Small companies are now delisting because of the increased regulation.
Tick off another item on the checklist of unintended consequences. A year into the regulatory reform brought about by Sarbanes-Oxley and the Wall Street settlement, small companies are exiting the national securities exchanges in droves.
Many businesses are simply deregistering their common stock, leaving unwitting shareholders to trade on the Pink Sheets or Bulletin Board. Still others have picked up their shares altogether and gone private. These trends, which look to continue as at least two corporations file with the U.S. Securities and Exchange Commission to deregister everyday, are worrying to both investors and securities firms who get their livelihood from free-flowing stock markets.
It amazes me that so many people seem to think that we can just pass legistlation and it won't have negative effects like this. Now investors will have a much more difficult time getting information on these companies, the companies won't have as much access to capital, and for what? So that Congress could pat themselves on the back and make a show for the public by passing something that has no real teeth, but is just for show. This is why I get so pissed off when Republicans and Democrats increase the size of government. They don't know what the hell they are doing, there always seem to be unexpected consequences, and the people who were doing wrong stuff in the first place just find a way around it.
Why is it that so many people think corporations have evil intentions and the government has noble ones? They are both run by faulty humans beings, and they are both looking to expand their power and their income. The funny thing is that consumers have more power over companies than citizens have over government. If a company doesn't take care of it's customers, someone will start-up a company to compete with them. If the government doesn't take care of it's citizens, we can't do anything. (Okay I know we can vote, but really now, if you want to vote for a Libertarian or Green or whatever party candidate, you are basically throwing your vote away). This is why I want to see state governments have more power and the federal government have less. Then the state governments can compete for businesses and citizens and everything else.
The problem with Enron and Worldcom and Global Crossing and everyone else was not that they weren't regulated enough. Given what we know about Lay, Skilling, and Fastow, if they had signed something certifying Enron's financial statements, would that have made a difference?