From: Geoff Knapp
Dear SEC: I am the CEO and Chairman of a NM NASDAQ listed Microcap company that I founded in 1983. We have just short of 200 employees and close to $30 million in sales. I could go on and on about the SOX issue, but I will keep this fairly short.
Over the years we have worked very hard, struggled, done the right thing and ultimately succeeded to the benefit of our shareholders. After more than 20 years in business (nearly 20 as a public company) we are finally having the kind of success we always hoped for. We run a very clean company. Just at the time when we are succeeding we find ourselves swept up in government at it's worst with the SOX laws. The reasons which they were enacted have nothing to do with us or companies like us. The penalty is high for our company and our shareholders as we waste hundreds of thousands of shareholder dollars that could be used in building the business or returned to shareholders in the form of the dividends that we pay. At the same time our accounting staff is tremendously burdened with ridiculous busy work that takes them away from running the business. You would have to actually see the really stupid things that the accountants want us to do to understand the true travesty of what is actually happening with the real world implementation of Congress's knee jerk legislation. The irony in this mess is that the very industry that allowed the problem to happen in the first place is the one benefiting from it (the accounting firms). In the mean time I see absolutely no benefit to the shareholders of our company or the investing public at all where we are concerned. In fact, we have less time to focus on the real business and everyone is so overly cautious about a misstep people are afraid to act. It is now a competitive advantage to be a private or foreign company that does not have the SOX penalty imposed on them. I would never go public as a small company if I understood the true regulatory burdens of the public company environment as they exist today.
I have read the recommendations of the committee and concur with them 100%. Something needs to be done to eliminate the damage being inflicted on so many quality small public companies and their shareholders by SOX that weren't then, nor are they now, part of the problem. Thousands of good companies have been penalized for the sins of a few. The whole Sarbanes-Oxley mess is absolutely exasperating and when I see the money and time we waste for no benefit to anyone, I get really angry. I strongly urge you to adopt these badly needed reforms.