From: George M. Middlemas
The proposed changes do not take in to account the immense cost, with little derived or measurable benefit caused by this law. It costs each of my small-cap companies about $1.5 million per year to comply with this law, with little or no benefit to the shareholders or the public. In effect, we are replacing engineers and salespeople with accountants and lawyers. This may be good for the legal and accounting profession, but it does not create productive jobs in the technology sector. It is also worth noting that practically all incremental jobs added to the US Economy comes from the small and microcap segments, since these growing companies are usually net consumers of capital whilst in high growth mode. The SOX law has not prevented one company from abusing its responsibilities and it would not have prevented Enron, Global Crossing or any of the other abuses that occurred. Rather than promulgating public confidence, it has stifled risk-taking, which is the bedrock of capitalism. Why are so many companies looking abroad to go public, and why are foreign companies delisting? The entire law should be scrapped. It is also worth noting that in the private economy, when a mistake is made it is faced up to and corrected. This abominable law serves NO public good, and if not done away with, will result in the US markets being weakened vis-à-vis their global competition.
George M. Middlemas