New York (Nov. 18, 2003) -- Urging corporate financial executives to become “role models for good corporate behavior” in the era of Sarbanes-Oxley, Securities and Exchange Commission chairman William Donaldson reminded attendees at the Financial Executives International confab that they are an integral line of defense against corporate malfeasance.
“Help us fulfill this important mandate,” Donaldson implored during an opening-day keynote before several hundred chief financial officers, controllers and directors. “American investors are a loyal and resilient group, but regulators cannot help restore confidence alone. You can be a force for reform. Insist on high standards.”
Donaldson termed the recent spate of corporate scandals such as Enron and WorldCom a “widespread erosion of business principles,” and labeled the recent late trading and market-timing scandals in the mutual fund arena as “a sad reminders of improper practices. ”
He also told attendees that it’s time for companies to break out of the “straitjacket” of trying to meeting earnings-per-share projections.
“There’s too much adjustment trying to meet Wall Street expectations and that leads to bending accounting rules.”
As an example of the commission’s pledge of more stringent enforcement, he pointed out that the SEC has filed 670 actions in fiscal 2003, which ended in September, as opposed to 484 just two years ago. The commission has also sought to ban a total of 170 executives from ever again assuming posts at publicly traded companies.
-- Bill Carlino
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