The D&O Diary

The D&O Diary

A PERIODIC JOURNAL CONTAINING ITEMS OF INTEREST FROM THE WORLD OF DIRECTORS & OFFICERS LIABILITY, WITH OCCASIONAL COMMENTARY

Category Archives: SOX (Generally)

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Looking at the Costs and Benefits of SOX

Posted in SOX (Generally)
The Sarbanes Oxley Act was enacted nearly twelve years ago in the midst of profusion of corporate scandals. Despite the passage of time, the Act has remained controversial. In order to evaluate the Act’s impact, Harvard Law Professor John C. Coates and Harvard Business School Professor Suraj Srinivasan undertook to review over 120 studies of … Continue Reading

Supreme Court Rules PCAOB Removal Provisions Unconstitutional, Upholds SOX

Posted in PCAOB, SOX (Generally)
In a June 28, 2010 decision (here), the Supreme Court issued its opinion in Free Enterprise Fund v. Public Company Accounting Oversight Board case. This case had been widely followed because the petitioners challenged the constitutionality of the Sarbanes-Oxley Act and of the Public Company Accounting Oversight Board (PCAOB).   The petitioners prevailed before the … Continue Reading

In Other News…

Posted in SOX (Generally)
Strangely, the Judge Couldn’t Be Found Inside the Mailbox at the UPS Store: According to the February 12, 2009 Atlanta Constitution (here), Fulton County deputies have yet to serve suit papers filed on December 12, 2008 against a Fulton County Superior Court Judge, even though the deputies and the Judge all work in the same courthouse … Continue Reading

Sox for Nonprofit Entities

Posted in SOX (Generally)
When it passed the Sarbanes Oxley Act in 2002, Congress’ primary focus was on the transparency and governance of publicly traded companies. But the Act has turned out to have a more pervasive influence, affecting not just public companies but also private companies and nonprofit entities as well. A June 18, 2007 report (here) by … Continue Reading

Is SOX Unconstitutional?

Posted in PCAOB, SOX (Generally)
On Thursday December 21, 2006, the parties to a case pending in the United States District Court for the District of Columbia will argue whether the Sarbanes-Oxley Act’s provisions establishing the Public Company Accounting Oversight Board (PCAOB) are unconstitutional. Although the case focuses on only a narrow part of the Act, it has the potential … Continue Reading

Regulatory Reform: Solving a Problem or Introducing a Weakness?

Posted in Paulson Committee, Regulatory Reform, SOX (Generally)
The Committee on Capital Markets Regulation (or the "Paulson Committee" as the group has come to be known) is scheduled to release its recommendations later this week, on November 30. The Paulson Committee is concerned with the competitiveness of the U.S. securities exchanges in the global marketplace, and the perceived inability of the U.S exchanges … Continue Reading

SOX Clawback, Executive Compensation, and Attorneys’ Fees Recoveries

Posted in SOX (Generally)
A November 20, 2006 Wall Street Journal article entitled “Companies Discover It’s Hard to Reclaim Pay from Executives” (here, subscription required) details the difficulty that companies are having in their attempts to compel executives to return compensation they didn’t really earn because, as a result of later restatements, the company didn’t actually hit the compensation … Continue Reading

Crazy Eddie’s Cousin Sammy Takes on Alan Greenspan

Posted in SOX (Generally)
According to news reports (here), Alan Greenspan recently made public statements critical of the Sarbanes-Oxley Act, apparently telling the Massachusetts Technology Leadership Council on September 24, 2006 that the Act has become a “nightmare” that should be scrapped. Greenspan apparently told the audience that the SOX regulations are hampering business, discouraging risk taking, and driving … Continue Reading

SOX Consequences: Another Look?

Posted in SOX (Generally)
In a prior post (here), The D & O Diary fretted that Sarbanes-Oxley compliance costs could be driving foreign companies away from U.S. exchanges or encouraging existing public companies to delist their shares. An August 21, 2006 op-ed piece in the Wall Street Journal written by Maurice Greenberg and entitled “Regulation, Yes. Strangulation, No.” (here, … Continue Reading

Notes from Around the Web

Posted in SOX (Generally)
Numbers Pressure: In an article in its May 2006 issue, CFO Magazine reports the results of a survey of finance executives. Among other things, the survey participants were asked: Do you ever feel pressure from your superiors to use aggressive accounting techniques to make results appear more favorable? 11 percent of public company participants and … Continue Reading