On the heels of the fraud known as Enron, Congress passed legislation requiring CEOs to validate the integrity of their financial reporting. This legislation, Sarbanes-Oxley, and its effectiveness are still hotly contested. Is it universally accepted? Does it truly promote best practices within companies and across industries? Does it produce results? Well, the fact of the matter is that it is the law of the land. However, what good is a law if it isn’t applied? I can count on one hand, without need of my thumb, claims by law enforcement authorities of companies’ violating Sarbanes-Oxley.
Will Sarbanes-Oxley be dusted off and put to use now? The Financial Times reports that it will not be for lack of opportunity that Sarbanes-Oxley is not used. In regard to bank earnings, TARP investigator Neil Barofsky offers:
“I hope we don’t find a single bank that’s cooked their books to try to get money but I don’t think that’s going to be the case,” said Mr Barofsky, who has been dubbed the “Tarp cop”.
If this is in fact the case, what about some perp walks? Is white collar crime still an activity tolerated by the system? Who is providing the cover? Are the perpetrators in bed with the legislators? Don’t tell me that cooking the books is a victimless crime. Every taxpayer is being victimized in terms of lessened credit, higher taxes, a growing deficit, and outrageous fees. Victimless? I don’t think so. (more…)
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