Sen. Paul Sarbanes, D-Maryland, spoke out in strong defense of the corporate accounting legislation that bears his name last week, in a speech before the Consumer Federation of America.
Sarbanes said that the Sarbanes-Oxley Act of 2002, which he co-authored with Rep. Michael Oxley, R-Ohio, has helped kept investor confidence in the country securities markets intact, and that critics of the law should keep in mind the catastrophic business collapses that spurred on the bill's passage.
Critics have said the bill was enacted hastily in the wake of the historic bankruptcies of Enron Corp. and WorldCom Inc., creating unnecessary burdens for companies in the process. An advisory panel created by the Securities and Exchange Commission recently called for the exemption of about 80 percent of public companies from the law's internal controls provisions, and in early February, a conservative group filed a civil suit arguing that the regulator created by under the law, is unconstitutional.
Sarbanes noted in his speech that the SEC's advisory panel is made up mostly of small-businesses executives and their lawyers, with only one member representing investors sitting among the group. And he spoke strongly against the intentions of the Free Enterprise Fund to prevent members of the Public Company Accounting Oversight Board from exercising their powers.Both Sarbanes and Oxley are retiring from Congress in January.
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