Washington, D.C., July 30, 2007—Tuesday, July 31st is the fifth anniversary of President Bush’s signing of the Sarbanes-Oxley bill aimed at protecting investors from corporate abuses. Unfortunately, the law has resulted in harm to investors, preventing them from growing wealth.
A recent report by the Competitive Enterprise Institute, SOXing It to the Little Guy: How Sarbanes-Oxley Hurts Small Investors and Entrepreneurs, identifies major flaws in the law and explains why the law must be overhauled completely. Among the problems with Sarbanes-Oxley identified in the report, Section 404 forces auditors and executives to sign off not only on the accuracy of a company’s financial statements, but also on its "internal controls," a vague term which the law does not define.
The author, John Berlau, Director of CEI’s Center for Entrepreneurship, proposes an alternative stock venue that is free of Sarbanes-Oxley and other SEC requirements, in which fraud would still be punished but investors could choose how many preexisting rules are necessary.
- See the Video: A new CEI video posted on YouTube – For the of Love Tattoos: The Legacy of Poorly Made Laws – illustrates the law’s burdens on small businesses and entrepreneurs.
- Read the report: SOXing It to the Little Guy: How Sarbanes-Oxley Hurts Small Investors and Entrepreneurs by John Berlau
- Read other publications by John Berlau and the Center for Entrepreneurship.
- Contact John Berlau