Lawsuits, Sarbanes-Oxley Law Ravage U.S. Capital Markets

U.S. capital markets again lost ground against global competitors last year, highlighting the need to streamline regulation and crack down on excessive securities litigation, industry experts said on Wednesday.  The United States received only 6.9 percent of the funds raised in global initial public offerings in 2007 and did not participate in any of the top 20 global IPOs.”

Lawsuits aren’t the only reason capital is fleeing America for better investment opportunities elsewhere.  Another reason is the devastatingly costly Sarbanes-Oxley law Congress passed in 2002 in the wake of the Enron bankruptcy.  That law’s burdensome bureaucratic requirements and regulations have cost the stock market $1.4 trillion in value, and imposed an additional $35 billion in annual compliance costs on American business, while doing nothing to prevent another Enron, as recent mortgage losses at Countrywide Financial show

CEI is assisting a court challenge to provisions of that law that violate the Appointments Clause of the Constitution and separation-of-powers safeguards.  A challenge to those provisions will be heard by the D.C. Circuit Court of Appeals on April 15 in the case of Free Enterprise Fund v. Public Company Accounting Oversight Board (FEF v. PCAOB).