The rich and powerful apparatus that has grown up around the money-printing machine that is Sarbanes-Oxley is howling now that it is being threatened. Even as the committee vote was being announced, its chairman, Barney Frank complained that its passage would open the door for less ethical behavior by corporations (you just can't make this stuff up). At Reuters, columnist Rolfe Winkler moaned that the decision continued "the race to the regulatory bottom."
Over at the CFA Center for Financial Market Integrity, Kurt Schacht intoned, "This is an insult to investors given what they've experienced over the past year" -- apparently not noticing the irony. He then added, hilariously, "Small companies have had plenty of time to plan for this" -- apparently meaning that somehow during hard times companies are better positioned to give away all of their profits to accountants.
Meanwhile, Lord & Benoit, a consulting company that has grown rich helping its clients survive S-Ox, announced a seminar that would make the case that because Sarbanes-Oxley increases trust in companies, it is now crucial to getting us out of this recession. Good luck with that.
Now don't get me wrong. I'm not against the idea of Sarbanes-Oxley. Indeed, many executives at big companies have told me that meeting those regulatory demands has helped them to better understand their companies and to streamline their operations. What I'm against is the punitive, unfair, and biased nature of the S-Ox -- that, and the fact it rewards parasites even as it punishes producers. Were it voluntary, and coupled with rewards for good behavior -- like the Baldridge Award -- I'd cheer it.
Thankfully, even the Federal government -- if only because it is under duress to actually create real jobs -- is finally figuring out the evil and mischief that S-Ox represents. In fact, this week's vote merely made permanent what was temporary waiver for under-$75M companies announced a few months ago. Better yet, the new bill also calls for a study to move the waiver up to $250 million -- a figure much more in line with fast growing tech firms, which can reach that valuation before they even show a profit.
When that day comes, I'll break out the champagne -- then sit back and watch as big corporations, their ox now being gored for a change, howl for relief.
This is the opinion of the columnist and in no way reflects the opinion of ABC News.
Michael S. Malone is one of the nation's best-known technology writers. He has covered Silicon Valley and high-tech for more than 25 years, beginning with the San Jose Mercury News as the nation's first daily high-tech reporter. His articles and editorials have appeared in such publications as The Wall Street Journal, The Economist and Fortune, and for two years he was a columnist for The New York Times. He was editor of Forbes ASAP, the world's largest-circulation business-tech magazine, at the height of the dot-com boom. Malone is the author or co-author of a dozen books, notably the best-selling "Virtual Corporation." Malone has also hosted three public television interview series, and most recently co-produced the celebrated PBS miniseries on social entrepreneurs, "The New Heroes." He has been the ABCNews.com "Silicon Insider" columnist since 2000.