Sarbanes Oxley and All Similar Legislation Should Be Repealed

>Are you saying that there should be no law against falsifying financial statements? Advertisements employ the art of persuasion, where rhetoric and innuendo are appropriate. Financial statements should be factually accurate by law because altering them with incorrect information and causing people to invest money based on that false information is exactly the kind of thing which people should be prohibited from doing. Aren't financial statements generated by the bank? I am all for making sure that banking standards are a strict as possible. >I understand that most corporate failures don't occur from corporate malfeasance. In fact, I spoke on that point in the first round. I also understand that economies eventually recover and that successful businesses absorb their weaker and defunct competition. However, just because corporate fraud doesn't affect every company does not mean it should be left unregulated by law. My point wasn't that most corporate failures don't occur from corporate malfeasance. My point was that most companies don't fail from corporate malfeasance, period. >You argued in the first round that corporate failures do not cause a social harm. Your blanket assertion did not distinguish between the different causes of those failures. My "blanket assertion" was with regard to isolated corporate failures like Enron's, not nationwide economic recessions. Hopefully, your last rebuttal will address the former kind of failure rather than the latter. >SOX is not intended to protect investors from corporate failure; it is intended, in part, to protect investors from crooked practices. Why should they be protected by the government? Why can't they just hire their own auditors? Why shouldn't they be forced to do so? If they can't afford it, they obviously shouldn't be running a corporation. >When businesses fail, it affects more than just the investors and employees, who make up a large portion of society anyway. It affects consumers, related businesses and economies as well. This effect equates to a social harm. Again, we're talking about isolated corporate failures here. When A business fails, its assets are bought out by other companies and put back to work. >Sufficient for what? Early detection of a dubious investment is a utopian notion. In reality, deception often goes undetected for a substantial period of time or occurs after a period of ostensibly legitimate activity and practices. Such was the case in all of the pre-SOX corporate debacles. Red flags don't just pop up at the first instance of fraudulent activity. By the time they do, it may already be too late. To equate spotting a crack-head on the edge of a sketchy neighborhood to recognizing sophisticated and surreptitious white collar crime is a bit of a stretch. Your model of the investor/executive relationship presupposes that investors will have very little to do with how the business will be set up and run. If the investors were more involved in the process of creating Enron, I doubt that the byzantine accounting practices that made the debacle possible would have been put in place. I have no trouble with economically forcing investors to work on their investments. >SOX serves the interests of people who disagree with the notion of getting ripped off, which includes me, the government and an overwhelming majority of the country. The "notion" of getting ripped off is not nearly as important a reality as the fact that the group of people getting ripped off is very select. >A large number of shareholders cannot practically or effectively run a corporation without delegating certain roles to certain members. SOX sets a legal standard for these trusted positions, as it should for the power they hold. It is not an intrusion into capitalism. And the ones with the most power should be peopled with those the shareholders can trust. If they can't screen their most important employees with the kind of competence necessary to prevent fraud, they shouldn't be investing in a company. >Businesses cannot put people behind bars. They can make sure that some people never work again. They can blacklist people and shut them out of the workforce. They can actually do a lot of things if they can be bothered to. >Are you saying the law should only protect property that is necessary to survival? The law protects me from someone stealing my wallet, even if I only had $1 in it. So why shouldn't it protect me from someone stealing my investments? In the context of Corporate America, SOX decreases the incentive, opportunity and means to cheat the public and allows for the harsh punishment of those who attempt to do so. This is where we just have to agree to disagree. I make a very clear distinction between "private property" and "personal property", you do not. The difference between the two is almost a matter of taste, and so can't be debate very clearly.