Overview
Markets should pick winners and losers, not cheaters. Consumers and investors as well as employees and taxpayers need tough laws and tough rules to guarantee that their investments are protected.
In response to numerous accounting scandals and earnings restatements epitomized by the collapse of both Enron and Worldcom, which caused billions of dollars of investor and retiree losses and shook investor confidence world-wide, in 2002 Congress passed the Sarbanes-Oxley Corporate Reform Act. The law addressed conflicts of interest where supposedly independent accountants, who the Supreme Court calls “the public’s watchdogs,” instead look the other way while corporate executives cook the books.
The law also requires corporate management, at the CEO level, to certify annually to investors that their financial books are clean of manipulation. In response, the business-backed U.S. Chamber of Commerce has launched a campaign to repeal or weaken this requirement.
We oppose the recent SEC advisory committee recommendations that the CEO’s of the smallest 80 percent of publicly traded companies shouldn’t have to certify the books are clean. We support minimizing the cost of regulatory requirements for smaller public companies, but not at the expense of these important investor protections.
Several bills have been introduced in Congress that would also roll back this CEO requirement of the Sarbanes-Oxley Act, and we are monitoring them closely.
