My colleague and fellow blogger Prof. Bainbridge has just published Complete Guide to Sarbanes-Oxley: Understanding How Sarbanes-Oxley Affects Your Business. I know nothing about Sarbanes-Oxley or corporate law more generally, but I know that Bainbridge is a top scholar in the field; if I needed to know about the subject, his book would be the first place I'd turn.

cirby (mail):
Nobody like Sarbanes-Oxley.

Businesses hate it.

The bureaucrats in charge of administering it hate it.

Even the guys who wrote it don't really care for it.

Why is it still in effect?
5.8.2007 7:32pm
Hoya Lawya (mail):
There is also a question, at least theoretically, as to whether SOX is constitutional. Professor Viet Dinh, from the Georgetown University Law Center, along with Kenneth Starr, have filed a brief claiming the law unconstitutionally interferes with the President's removal powers.

Who new SOX would be challenged for violating, of all things, the Separation of Powers doctrine?
5.8.2007 8:15pm

Even the guys who wrote it don't really care for it.

I'm not sure how true that statement is. Michael Oxley, co-author of SOX, was recently hired by NASDAQ to represent the public policy interests of NASDAQ's listed companies. I think he is laughing all the way to the bank.
5.8.2007 8:31pm
Speedwell (mail):
Damn thing makes my job harder every day, and I'm just a tech support grunt who also handles security access for my pet piece of software. I apologize for Brother Inquisitor Sarbanes and Brother Inquisitor Oxley constantly, and suggest to my American users that they vote accordingly.

Many users are not even United States citizens and they can't stand it. One engineer from Canada throws it in my face every time she can't do something she thinks she should do, telling me, "I bet I could do that if it wasn't for SOX." Which is, as it happens, the exact way I feel, but she acts like it's my fault. A few months ago she was ranting at me, saying that she thinks I use SOX as an excuse not to do my work. So I e-mailed her the complete text of the law. Haven't heard a peep out of her about it since.
5.8.2007 9:35pm
volokh watcher (mail):
Protecting people who blow the whistle on corporate corruption is so, like, "yesterday."

Who cares if whistleblowers get fired and corporations engage in fraud and other illegal activities . . . like selling adulterated foods or drugs.

Let the marketplace work it out. Or, God forbid, trial lawyers. Oops, forgot about federal preemption: if the FDA says it's okay, its A-OK!

And, oh yeah, those 150 bureaucrats at the SEC and FDA, they can cover all the corp's in the USofA.

And even that's too much government interference.
5.8.2007 9:36pm
cirby (mail):
Protecting people who blow the whistle on corporate corruption is so, like, "yesterday."

You think SOx is really about protecting the little guy from corporate corruption and protecting whistleblowers?

How... quaint.

It could have accomplished that with about 10% of the verbiage, and about 1% of the paperwork.
5.8.2007 10:06pm
Big D (mail):
I work (indirectly) for a Fortune 50 IT shop (that is, they don't sign my paychecks).

SOX has destroyed the department. Hundreds of full-time employees (and long-term contractors) spend months managing paperwork so that temp contractors (sometimes offshore) can try to do their work (why contractors? Because all the workers are too busy managing the paperwork and don't have any resource hours to actually program).

I have heard estimates thrown about that SOX is costing companies 1% of their revenue. I'm sure that's a wild guess made on no real basis, but I'd have to say for at least one Fortune 50 company, it's probably understated; if anything, the opportunity costs of what those same people could have been doing (what they *were* doing, before SOX) is much higher.

Does anybody have a count on how many companies--and how much equity--has been taken off the market in public to private buyouts since SOX started?
5.8.2007 11:50pm
Houston Lawyer:
I have been a securities lawyer since 1985. Prior to SOX, the SEC's rules applicable to public companies were constantly evolving to make reporting easier. Since SOX, the results have been just the opposite.

Most of the public companies I have represented are marginally public, with small public floats that are not terribly liquid. Most estimate SOX costs in excess of $1 million per year. The SEC release last year on the new executive compensation rules alone was 450 pages long.

What most people don't realize is how unnecessary all of these new rules are. The people who committed fraud violated the old laws. Ken Lay and his cohorts were convicted as have been many others.
5.9.2007 11:13am
Tracy Johnson (www):
Reference passed on to the HP3000-L list. I'm sure they can use it.
5.9.2007 11:24am
Houston Lawyer:

Yes the new compensation disclosure rules are over 450 pages, but remember 20 pages are devoted to compliance with the Paperwork Reduction Act so they don't count.
5.9.2007 1:35pm