How can Obama and Congress restore investor confidence? 2820
lekatis last edited by
ANSWER - FROM MICHAEL OXLEY, TO FORTUNE MARCH 2010
We need to figure out financial reform. In the wake of AIG and Lehman, it’s very difficult today to make the case that the market will take care of itself and that we don’t need a lot of transparency or even a minimal regulatory structure.
Congressmen Paul Sarbanes of Maryland and Michael Oxley of Ohio crafted Sarbanes-Oxley, which was enacted in 2002. Michael Oxley is now working at law firm Baker Hostetler in D.C.
harrywaldron last edited by
Hi George - Some ideas on this great question:
– SEC needs to establish some measurement and reporting criteria for high-risk asset classes (e.g., those toxic advanced financial instruments that got us in trouble to begin with). No longer can this be ‘off the books’
– Reinstitute Glass-Steagal so that ‘banks will be banks’ once again, as GMAC was a contributing factor to the fall of GM
– Regulate and enforce some of the shady practices used by large trading institutions (e.g., flash trade programs, currency/commodity speculators, etc)
– Simplify and further improve SOX (esp. 404) so that it is less nebulus and subject to interpretations
– Penalize officers and companies that willfully violate SEC standards and compromise their fiduciary responsibilities to their shareholders (including taking away golden parachute provisions when misconduct is found)
More restrictive new laws are needed when corporate leaders don’t act responsibly and protect the valued interests of their shareholders. Unfortunately, new programs like SOX in 2002 impact the good ethical companies as well.