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U.S. Securities and Exchange Commission

Responses to ACSPC Request for Public Input

General Impact of Sarbanes-Oxley Act

Question 5. Does the current securities regulatory system adversely impact or enhance this country's culture of entrepreneurship? Has the current system impaired or enhanced the ability of American companies to compete on a global basis? If so, how?

The following answers have been received:

08/02/2005 13:57:44   SOX is killing public capital formation for small companies. See my answer to questions number 1 and 2 above. With the added costs of SOX, not to mention the added liabilities and other requirements, no one in their right mind will take a small company public now if any kind of meaningful alternative exists. It is scary to me that, if Microsoft was in its infancy now, no responsible corporate attorney would recommend that it go public.

08/02/2005 17:44:12   Entrepeneurship is negatively impacted. Entrepeneurs need to focus most of their energies on strategy and its implementation to create value. Management of small companies needs to adhere to regulations and the laws, but not to burden levels that take away the competitive edge. Access to capital in public markets should be safeguarded, but not to an impossible level.

08/02/2005 18:15:55   adversely impacts

08/02/2005 23:36:32   Might make small companies think twice about going public and thereby limit their capital.

08/03/2005 01:39:17   404 audits represent a subtle way for government to take over business. The private sector is being regulated out of existence. This is similar to how other governments have driven minority groups out of existence. The penalties for failure to comply are extremely serious, and there are too many regulations (ADA, HIPAA, SOX, IRS, etc.) to ever be in total compliance. As a result, any executive or company can be entrapped at the will of the government. 404 poses a threat to destroy entrepreneurship. The conceptual CEO's and CFO's in private enterprise cannot tolerate the anal approach of this audit. Only bureaucrats can tolerate it.

08/03/2005 07:01:34   look at all the form 15's (withdrawal from registration) being submitted. This is a very difficult and burdensome environment to do business. the political world versus reality is a very difficult balance that's need to thought thru very carefully before implementation. Kneejerk reaction to the enron's for political purposes can be very devastating to a fragile group of small, HONEST compamies... And I belive this has happened.

08/03/2005 08:55:04   Adversely impacted. In order to grow the need for more capital and thus more shareholders. It has caused us to reconder if the growlth is worth the additional cost.

08/03/2005 08:58:39   The cost is too great for a small company.

08/03/2005 10:40:26   Fewer companies will become publicly held, thus adversely impacting our culture of entrepreneuurship. I feel the current sytem impairs our ability to compete globally.

08/03/2005 11:03:25   We are not a "global" competitor, however it does hurt our competitivness against credit unions, and similar sized banks that are not subject to SOX.

08/03/2005 12:17:58   adversely impact small companies. the SEC allows the DTCC stock loan program to exist, and, in effect create shares out of dust, which are never settled or paid back.

08/03/2005 13:55:42   The very fact that the SEC does nothing about short- selling companies out of business is a turn off for people like myself.

08/03/2005 15:01:40   It adversely impacts entrepreneurship since many of the creative minds in smaller companies have to spend more time on control issues rather than creative marketing and efficincy improvement issues. Competing on a global basis has probably been impaired by the current system since more time is spent on control issues rather than global competition issues. Eventually, public companies adjust to the new requirements by hiring more people. I am the CFO and chief accounting officer in our company. I was swamped with too much work before SOX was introduced. As a result of SOX, we hired another CPA in a controller role which has now left me more time to be creative than before SOX. We have also hired additional accountants to improve internal controls which gives me more peace of mind, allowing more creativity.

08/03/2005 15:22:49   No doubt taking a company public today with no exemption based upon smaller market capitlization would be more difficult and would adversely impact entrepreneurship.

08/03/2005 18:01:35   Please look into item no 29

08/03/2005 18:05:44   The current securities regulatory system has adversely impacted the country's culture of entrepreneurship by making raising capital difficult and expensive. Also by making being public expensive fewer companies will want to do it. Investors will not want to invest in small public companies because capital will be wasted on compliance and not spent on corporate projects.

08/03/2005 18:30:29   x

08/03/2005 19:54:33   If Bill Gates were to be starting out today, in this environment, we would never see the personal computer. Bill would be flipping burgers, dreaming of what could have been. The current securities regulatory system inhibits entrepreneurial spirit through allo the forms and papers which must be filled out with little leeway for timliness. But that aside, the worst part is the selectivity in prosecuting delinquent companies. Two examples: One company continually pubished PR announcements, describing tremendous potential, and an offer to buy the company for more than 10 times current pps. Sis months later, another PR comes out, with the company president admitting all the prior PR's were lies. The company is still trading. Another company, releasing PRs, getting naked shorted, yet has proven assets, an intrinsic company value that is estimated to be over one trillion dollars, has an income flow, joint venture partnerships with several other related industry companies, all with income producing activities, but grossly in arrears in filing. The company is making (VERY expensive) attempts to get all filings caught up, but through a quick decision at a hearing, will have its trading status revoked within a few more weeks (if not sooner). The second company has the potential to become the largest single provider of its product in the world, with a uniquely developed product, to a growing target audience of consumers. The current situation will delay this potential, since it will have to go private to continue its activities, or perhaps move to a non-US exchange. If it moves off shore, the tax loss to the US Department of Revenue will be staggering.

08/03/2005 19:55:50   In 1989 I turned an 86 item complaint package concerning a public company named Daleco Resources Corp into the Federal Government. In November of 2001 I communicated with the Federal Government on a "Pump & Dump" etc. concerning a public company named Regency Affiliates, Inc. Go to www.ragingbull.com message board for Daleco (symbol-DLOV) and message board for Regency (symbol-RAFI) and read posts by "virgule" for a detailed description of these two public companies contribution to corporate FRAUD! The current regulatory system, in the past, has impaired the ability of American companies to compete on a global basis!!!!

08/04/2005 09:17:19   I think the regulatory system is having a negative effect on entrepreneurships. There are such strict guidelines out there that requires alot of money up front to get things in place to be compliant. Money that would have been used more for true start up costs is having to go to these issues before start up could even begin.

08/04/2005 09:37:56   Clearly decreases it - though the idea behind the legslation was corect. It was overzealously pursued. Apply existing rules better and we are fine

08/04/2005 09:39:15   The FCPA is the only regulation which impairs American companies on a global basis.

08/04/2005 10:40:16   Very small companies are not adversely impacted initially but it is a disincentive to grow.

08/04/2005 12:09:05   Entrepruneurs focus on a creative vision. They are looking to the future and challenging what is possible. SOX is bogging those minds down with control logs, redundent meetings, and bureaucratic red tape. True entreprenuers will look to alternatives to becoming an SEC registrant, because the cost in terms of lost "creative time" is staggering. How much was truly lost at worldcom and enron in actual money invested? Not market cap created when the stock ran up on false info. If you consider the amount lost, and then compare it to the $$$ being spent on SOX, we could create a fund to pay off all future losses and still save these companies money. We're spending $100 to same $2.

08/04/2005 13:38:24   I would think that entrepreneurship occurs at a much lower level. It is still taking place long before a company ever goes public. The areas of SOX outside of 404 are very good and provide much benefit to investors and American companies. It's just that section 404 is at a level where it is too difficult to comply with.

08/04/2005 13:53:47   They system impairs small companies because they cannot afford the additional legal/accounting fees to comply and get up to speed with SOX.

08/04/2005 14:20:27   In the long-run if we continue to legislate impediments into the system it will adversely impact the culture of entrepreneurship.

08/04/2005 18:05:44   The current regulatory system is so complex and is such a burden that it has to dampen entrepreneurship in the U.S.

08/05/2005 10:54:31   I believe the additional regulation has in the short term reduced the amount of risk that manangement of companies are willing to take. In that context it has adversely impacted entrepreneurship.

08/05/2005 12:38:34   Daleco Resources Corp (OTCBB-DLOV) - 1977 through 1985 - Submitted to the SEC in August of 1989 by Marv Eatinger Although United Westland Resources Ltd. (now Daleco Resources Corporation) and Reef Resources Corporation were shown in the Wall Street Journal as listed on the NASDAQ (over the counter) stock market, neither company was registered with the NASDAQ. United Westland Resources Ltd. did not register with the NASDAQ until sometime after September 30, 1984. United Westland Resources Ltd. never filed any financial reports with NASDAQ or the SEC until its form 20-FR registration with the SEC on May 31, 1984. Reef Resources Corporation never had its books audited in its two and one-half year existence, and never filed any financial reports anywhere in the world! As a result of United Westland Resources Ltd. and Reef Resources Corporation amalgamation on November 25, 1981, shareholders of Reef Resources Corporation got one share of the new company (United Westland Resources Ltd.) for each two shares of Reef Resources Corporation. "Reef Resources" first appeared in the Wall Street Journal as listed on NASDAQ on Monday November 16, 1981. "Reef Resources" appeared with a bid price of $2.00 per share. "UtdWestlnd Res" bid price was $4-3/8 per share in the November 17, 1981, issue of the Wall Street Journal. Since Reef Resources Corporation never had its books audited in its 2-1/2 year existence, and never filed any financial reports anywhere in the world, this bid price of $2.00 per share gave the 2 for 1 share exchange a look of legitimacy. In reality this share exchange should have been at least 8 for 1 if not more. As long as you are not registered on NASDAQ, it would appear that the sky was the limit! Daleco Resources Corporation emerged from this amalgamation with a name change in 1986. The only reports issued were the Annual Reports to Stockholders (1981 & 1982 reports were not filed with any regulatory authorities in Canada or the United States). The Annual Reports for the fiscal years of 1981, 1982, 1983 & 1984 all showed United Westland Resources Ltd. as listed on the NASDAQ. The fact is that United Westlands Resources Ltd. was not even registered with the NASDAQ! Shea & Gould law firm (Washington, DC) was United Westland Resources Ltd. United States counsel from sometime in 1983 to 1992. Coopers & Lybrand (Toronto, Canada & United States) was United Westland Resources Ltd. (now Daleco Resources Corporation) and Daleco Resources Partnership (two Nevada companies) auditors from at least 1977 through 1996. United Westland Resources Ltd. was not registered with the SEC until the 20-FR registration on May 31, 1984. In order to be a foreign corporation (Canadian) not registered with the SEC but listed on the NASDAQ, United Westland would have been subject to the "information-supplying exemption" Rule 12g3-2(b)[17 CFR 240.12g3-2] under the Securities Exchange Act of 1934. This meant that United Westland Resources Ltd. would have had to furnish the SEC with copies of disclosure documents required to be made public pursuant to the law of the country of its domicile or in which it was incorporated. Since United Westland was not registered with the NASDAQ until sometime after September 30, 1984, The SEC had no idea that United Westland was selling its stock to United States citizens as if it were listed on the NASDAQ. On October 5, 1983, revisions were made to Rule 12g3-2 that terminated the ability of Canadian issuers of stock in a public corporation to use the "information-supplying exemption" to facilitate a listing on NASDAQ without registering with the SEC. If the regulatory authorities have read my past certified letters, registered letters, Federal Express packages & emails you will have seen the damage that the "information-supplying exemption" Rule 12g3-2(b) has inflicted on disclosure requirements by foreign companies (Canadian) to their United States investors! Specifically, the United States investors in United Westland Resources Ltd. (now Daleco Resources Corporation). Shea & Gould law firm and Coopers & Lybrand accounting firm were part of a conspiracy concerning tax fraud and securities fraud that were a result of a total lack of disclosure by Daleco Resources Corporation. Coopers & Lybrand would not have aided and abetted Daleco's fraudulent accounting transactions without having known going in that the "information-supplying exemption" and the manipulation of Daleco's public filings into different branches of the SEC Division of Corporate Finance by Shea & Gould law firm, were going to be the modus operandi. In September of 1983 United Westland Resources Ltd. sold 1,000,000 shares of no par value common stock with Series A Warrants attached at a price of C$1.75 per unit (the "Offering"). The Offering consisted of one common share and two warrants. The warrants, which were in bearer form, authorized the holder to purchase one common share for each two warrants held at any time up to 180 days after the date of the Offering, after which time any unexercised warrants became void. This Offering was sold through the facilities of the Vancouver Stock Exchange. The total Offering of C$1,750,000 would fall just below the SEC radar screen of US$1,500,000. This meant that United Westland Resources Ltd. would avoid having to register this Offering under the Securities Exchange Act of 1933. To have to register this Offering would blow United Westland's cover, because they were not registered with the NASDAQ at the time of this Offering. Yet, United Westland Resources Ltd. was shown in the Wall Street Journal and BARRON'S as a listed NASDAQ company. In addition to the advertisement by United Westland Resources Ltd. (now Daleco Resources Corporation) in the November 30, 1981, issue of BARRON'S, United Westland Resources Ltd. had advertisements in BARRON'S on the following dates: September 21, 1981 page 73, January 31, 1983 page 62, February 14, 1983 and February 1, 1984 page 66. At the bottom of each one of these advertisements was a company to contact other than United Westland Resources Ltd. This company was Howard Bronson & Company, Inc. Phone (212) 867-6160. It is very possible that a majority of the 1,000,000 common shares and associated warrants (Units) issued by United Westland Resources Ltd. in the above mentioned "Offering", were absorbed by United States investors who thought that United Westland Resources Ltd. was legally listed on NASDAQ and therefore was filing some kind of financial report with a regulatory entity in the United States. When in fact, United Westland Resources Ltd. was not filing any financial reports with any regulatory entity in the United States, until their 20-FR registration with the SEC on May 31, 1984! ABBREVIATED SUMMARY OF DALECO RESOURCES CORPORATION'S INITIAL FINANCIAL BUSINESS PLAN IS SHOWN AS FOLLOWS: In 1977 Daleco Partnership ( two companies incorporated in Nevada with a parent co.(Daleco Resources Ltd) incorporated in Vancouver, British Columbia ) set about to delineate an oil & gas field in Texas. United Westland Resources Ltd., at that time, was a public co. on the Vancouver Stock Exchange which was incorporated in Vancouver, British Columbia. Daleco Partnership raised money through United Westland Resources Ltd. by selling stock, putting down oil & gas wells & then borrowing money ( loans ) using the successful wells as collateral for the loans. In 1979 Daleco Partnership invented a co. called Reef Resources Corp. which was incorporated in Vancouver, BC. Reef had a subsidiary in Nevada called Reef Resources. Daleco Partnership took all the dry holes & worthless leases that were a result of delineating the Texas field & sold them into Reef Resources through an 8 million dollar common stock issue on the Vancouver Stock Exchange. Since Daleco Partnership never had much, if any, income & was using full cost accounting for oil & gas assets, this 8 million dollars of worthless properties would not have had a reduced tax basis due to amortization & depletion expense. So here you have a partnership that never had any of its own money invested, and yet was able to gain 8 million dollars on the sale of worthless properties. No capital gains tax would ever be paid because the tax basis on Daleco Partnership books was 8 million dollars & that is the price Reef Resources paid for these worthless properties! THE REST IS HISTORY: a. In 1980 Daleco Partnership borrowed approximately 6 million dollars & put these loans on United Westland Resources Ltd. parent co. books in Canada ( United Westland also had a wholly owned subsidiary in Nevada named Westland Resources Corporation). b. In 1981 an illegal pooling of interest amalgamation between United Westland parent co. in Canada & Reef Resources parent co. in Canada was completed. Nevada subsidiaries of these two parent companies were left separate until they were illegally merged (using a merger of form rather than substance) in Nevada on Jan. 25, 1984. c. The pooling of interest was the accounting cover for the 6 million dollars in loans that Daleco Partnership ended up with but were put on United Westland parent co. books in Canada. Worthless dry holes & leases from Reef were used as debts to offset the 6 million dollars in loans that Daleco Partnership stole through United Westland parent co. books. d. Oct. 1, 1983 changed United Westland parent co. books in Canada to successful efforts accounting & wrote off 8 million dollars of worthless properties from Reef 1981 pooling of interest. e. From 1981 through 1984 United Westland subsidiary in Nevada would forfeit back to Daleco Partnership 8 million dollars worth of good properties. This would balance the subsidiary books in Nevada to the parent co. books in Canada after Reef(Nevada) & Westland Resources(Nevada) were illegally merged on January 25, 1984. f. On Oct. 1, 1984 Westland Resources (Nevada) changed from full cost accounting to successful efforts accounting. Since the merger took place on Jan. 25, 1984 and the fiscal year started on Oct. 1, 1983, Westland Resources (Nevada) would absorb Reef's 8 million dollars of worthless properties into its amortization & depletion base. TO SUMMARIZE: 1. Daleco Partnership gained 8 million dollars & paid no capital gain taxes from the sale of worthless assets to Reef in 1981. United Westland got worthless properties & Daleco Partnership got 8 million dollars. 2. 8 million dollars of worthless properties were written off Canadian parent company books & added in on the Nevada subsidiary books. This means that United Westland would have 16 million dollars in well costs that were a fraudulent result of the Reef pooling of interest amalgamation in 1981. 3. 8 million of good properties were forfeited back to Daleco Partnership in order to balance United Westland subsidiary ( Nevada ) books to offset the 8 million dollars of worthless properties that were added in by the merger with Reef (Nevada) on Jan. 25, 1984. 4. Daleco Partnership got 6 million dollars in loans & cash that United Westland ended up paying for with forfeiture of assets to the Union Bank of California. The stockholders of United Westland Resources Ltd. (now Daleco Resources Corp. OTC--DLOV) ended up with nothing! My question is, did I reinvent the wheel with this case or was this standard business tactics in the 1970's & early 1980's? THE PLAYERS: 1. COOPERS & LYBRAND--TORONTO--AUDITORS FOR UNITED WESTLAND & DALECO RESOURCES CORP. (FROM 1977 THROUGH 1996) 2.COOPERS & LYBRAND--UNITED STATES--AUDITORS FOR DALECO PARTNERSHIP (two Nevada corporations-Amiroil International 100% owned by Dov Amir & Coast Exploration Company 100% owned by Louis Erlich) 3.SHEA & GOULD LAW FIRM (DISSOLVED IN JAN. 1994 AT A SPECIAL NIGHT MEETING OF PARTNERS. ONE WEEK AFTER RECEIVING THE THIRD CERTIFIED LETTER THAT I HAD SENT THEM OVER A PERIOD OF TWO YEARS. THEY NEVER ANSWERED ANY OF MY CERTIFIED LETTERS CONCERNING DALECO'S SEC FILINGS). 4. MARIO V. MIRABELLI (now with Patton Boggs--one year ago was with Baker Hostetler) MANAGING PARTNER SHEA & GOULD UNTIL JAN. 1992. (MANIPULATED UNITED WESTLAND SEC FILINGS INTO DIFFERENT BRANCHES OF THE SEC DIVISION OF CORPORATE FINANCE TO COVER UP THE FRAUD)-MARIO V. MIRABELLI WAS AN SEC ADMINISTRATIVE LAW LAWYER FROM 1969 THRU 1973! 5. CERTAIN NASD EMPLOYEES WHO WERE RESPONSIBLE FOR REPORTING NASDAQ LISTED QUOTATIONS FROM JAN. 1981 THRU SEPT. 30, 1984. (UNITED WESTLAND RESOURCES LTD. NEVER REGISTERED WITH THE NASDAQ SYSTEM FROM JAN. 1981 THROUGH SEPT. 30, 1984. THEREFORE, THEY COULD NOT LEGALLY HAVE BEEN LISTED ON NASDAQ. YET, THEY WERE ABLE TO TRADE THEIR SHARES AS IF THEY WERE LISTED ON THE NASDAQ SYSTEM FROM JAN. 6, 1981 THROUGH MAY 31, 1984 WHEN THEY FILED A 20F REGISTRATION WITH THE SEC). This enabled United Westland Resources Ltd (now DALECO) to not file any financial reports either in Canada or the United States for the fiscal years of 1979, 1980, 1981 & 1982. 6. AND OF COURSE THE MANAGEMENT OF UNITED WESTLAND RESOURCES LTD. (NOW DALECO RESOURCES CORP.--OTC:DLOV). 7. A COUPLE OF CANADIAN LAWYERS IN TORONTO & VANCOUVER! NOTE: I have all the documents to prove these allegations!
Regency Affiliates, Inc. (OTCBB-RAFI) - Complaint email submitted to the Miami office of the SEC in Nov. of 2001 by Marv Eatinger William R. Ponsoldt Sr. created a press release price rally in Regency's stock in February of 2000. Three days before the first press release he established a corporation in Nevada named Liberty Group, Inc. This corporation was owned (my analysis) by Statesman Group, Inc. an irrevocable trust in Nassau, Bahamas for Ponsoldt's children. Statesman Group, Inc. was a reporting entity to the SEC. Starting in March of 2000 until approximately April 15, 2000, Ponsoldt sold approximately 1,800,000 common shares of Regency's stock (this stock was owned by Statesman Group, Inc.) through Liberty Group, Inc. of Nevada. This stock was sold at prices from $3.00 to $5.50 per share. No shares of stock owned by Statesman Group, Inc. were ever reported to the SEC as being sold by Statesman Group, Inc.!! Yet the disappearance of these shares showed up in the reports filed by Regency showing Statesman's ownership of Regency's common stock. Ponsoldt paid what amounts to nothing for these shares! (See www.ragingbull.com message board for Regency Affiliates, Inc. Symbol RAFI - Posts by "virgule" for detailed description)

08/05/2005 12:44:28   I believe that the more cumbersome regulations become, the more this hurts start-up entities. These companies need to concentrate on their business model to the exclusion of jumping numerous regulatory hurdles. This in turn should hurt our ability to compete globally.

08/05/2005 15:34:53   Entrepreneurs also will seek the path of least resistance. If it can get done somewhere else quicker and cheaper, that's the path that will be taken.

08/05/2005 15:43:46   The ability of de novo or start-ups in banking to attract strong capital positions without attracting enough investors to breach the registration limits is very much an issue. In addition, if the initial investors are limited to avoid registration but later increase through sales or distribution of shares, costs may esclate.

08/05/2005 16:45:38   No, this regulatory environment does NOT affect entrepeneurship. What affects entrepenuership is the stupidity of some legislation that is incorrectly rewarding outmoded business models and the ideas of Intellecetual Property that are far over-reaching the reality of the need to build on wel-known concepts. That kills innovation, not the market regulation.

08/05/2005 19:33:08   It changes the entrepreneurial atmosphere. Much more likely to do venture capital than public offerings.

08/06/2005 13:52:06   Going public has been a source of capital and liquidity for many start-ups. SOX has made going public more expensive. Lack of capital will reduce competivness of US companies.

08/08/2005 11:10:11   it only hurts if the small company wants to go public to attract the capital it needs to grow.

08/08/2005 11:39:29   Given a choice of starting a new company, I would not utilize the option of going public. At a certain size, it is a must, but is this how we want our capital markets to be preceived? Larger companies can fund SOX requirements based on their large earnings stream. Smaller companies has hurt not by just the money, but the lost time and energy involed in complying with SOX. Historically, the only advantage a small company has is its ability to move fast and meet a customer's individual needs better than a big company. Time spent on SOX does little to help.

08/08/2005 14:06:10   The SOX 404 compliance requirements will have an adverse impact on both the culture of entrepreneurship in the US and the ability of our companies to compete on a global basis. First of the added cost of compliance takes resources away from the company that they could otherwise deploy to improve their competitive stance in the marketplace. Secondly, if you are considering expansion into foreign markets through acquisition, etc., you now have to be cognizant of making sure that you remain SOX compliant. In some cases that may prove to be cost prohibitive. Just because an entity cannot stand up to the rather onerous and in some cases downright adsurd requirements of the COSO framework doesn't mean that they are rife with fraudulent activity. Most non-public companies in the US would not get an unqualified SOX opinion on their internal control structure. That doesn't mean they are fraudulent enterprises. Finally if you are considering an acquistion in a foreign market, the acquiree now understands that they would have to become SOX 404 compliant and they may not want to go through the hassle. That leaves the US company with a very distinct disadvantage when it comes to competing in the global marketplace.

08/08/2005 15:43:24   Smaller companies will have to grow up before becoming public. There will be many fewer "going public" situations as soon as possible. This is not all bad from the investor's perspectives. However it will impair the ability to compete on a global basis.

08/08/2005 21:39:10   The answer to this question depends on the size of the company that is going public. Large companies greatly benefit from our regulatory system in that investors have certain expectations that the regulatory system isures are met. Very small companies are hindered by the demands on their time and resources needed to avail themselves of the U.S. capital markets. There is a definate cost to being public, and at some point, the benefits do not exceed the cost.

08/09/2005 09:30:31   Adversely affect. It is difficult to compete in local and regional markets, global market aside, when additional resources are required for SOX compliance.

08/09/2005 13:04:16   I don't believe the current regulatory system has significantly impacted this one way or the other - there are still exit strategies for the early entrepreneur. Globally, again the additional costs of SOX is the major factor.

08/09/2005 16:26:34   Counter entrepreneurship...over regulation. No impact on global competition unless it is negative due the costs.

08/09/2005 17:25:10   Adversely impact. Entrepreneurs want to use their time creating value, improving operatons and maximizing shareholder value vs. spending time on documentation of what they know to be good controls. It's window dressing.

08/10/2005 09:04:41   no clear answer. the costs adversely impact; the regulation/monitoring tries to keep things honest - which enhances.

08/10/2005 13:44:39   More regulation, and related costs of compliance causes inefficiencies in American companies. To a point these inefficiencies are offset by greater confidence in the market an as such better share prices and the larger the company the smaller the effect of these inefficiencies. For a small company wanting to go public, the bar has been raised and as such the jump requires a bigger jump to get to a point that the benefits outweigh the costs. This can hurt those marginal companies that as a result try to grow too fast, and inhibit small companies that don't want to take the additional risk of the large incrase in growth.

08/10/2005 16:00:18   I believe it has to have adversely affected it. The regulatory environment, especially for small community banks like we are, has become suffocating and the amount of dollars spent ridiculous!

08/10/2005 17:18:15   No impact on entrepreneurship as this is primarily in the private sector. The current system has impaired American companies to compete globally as non-US companies do not have these costs.

08/10/2005 22:09:27   Although our strength is the fact we are a country of law and therefore minimize the fraud and extortion other countries face, we are now turning our country upside down with frivolous suits and non value added cost burdens on American business. The American worker is by far the most productive in the world and I can speak to that on a educated basis seeing first hand production operations in many parts of the world. We, management, consider our employees to be a very important part of the overall success of our companies. Yet we are now facing costs that are mounting very quickly with very little if any value to the well being of our companies.You need only to look at double diget cost increases in medical costs. When I first started at our Company we paid all of the employees medical coverage (we were self insured) slowly we increased that to a small token cost then an increase in copay. Yet we provide company paid pension and company paid profit sharing to every employee. And we gave every employee stock options if they were granted by the Board. With some of the changes our legislators are discussing on expensing options ( which is truly a farce using the Black Shoal treatment) it will further reduce some of the incentives our emplyees now enjoy.Penalize the criminals but leave the honest people alone

08/11/2005 20:27:22   Although I have no statistics - I would assume that fewer companies would look to the security market to provide funds for new ventures.

08/12/2005 13:12:10   I believe it adversely affects entrepreneurship as evidenced by the number of my peer banks choosing to go private in the face of SOX. I personally know of some of them who took their company public with a great deal of excitement about growing the bank for the benefit of their shareholders, but that excitement waned in the face of SOX. That action is living proof that entrepreneurship has been adversely impacted. If you agree, then the ability to compete globally has been adversely impacted, as well, because entrepreneurship is what drives competition.

08/12/2005 14:46:45   Definitely enhances! Many foreign countries are discussing taking similar actions. I believe it enhances American companies ability to compete on a global basis. However, the inital cost were much higher than necessary given the over zealous efforts by external auditors whether due to lack of guidance or not.

08/12/2005 16:35:01   If anything, SOX decreases the desire to be a pulic company which may increase entrepreneurship but decreases access to public capital markets and decreases global competitiveness.


08/15/2005 13:08:27   By limiting the attraction of the public markets to emerging companies, one major potential source of liquidity for these companies is lost. Without this alternative, return on investment can only suffer overall. The resulting decrease in returns will limit the availability of investment in emerging companies, overall.

08/15/2005 14:27:30   Historically, US capital markets have encouraged entrepreneurship far beyond what any other economic system has been able to achieve and this is one of the cornerstones of US competitiveness. Judged against the competition, the US regulatory structure remains at the top of the list. That is not to say it could not be improved.

08/15/2005 15:10:05   It enhances the perception of American companies that they are culturally capable of only thinking short term, regardless of who gets burned. There will always be a culture of entrepreneurship in the US because of that mindset; it's only the behemouth corporations that will always be fishing for small companies to line their pockets with that will protest the extra cost of controlling companies they will acquire.

08/15/2005 15:13:01   It's definitely decreased the competitiveness of small companies who are looking for small amounts of capital. The options now for the entrepreneur is to find a venture capital firm or a bank who will provide the funds necessary to start/grow a business. The costs associated with being public basically kill the ability of an entrepreneur from taping that market unless he/she is going to procure a significant amount of funding.

08/15/2005 15:14:45   It should have only impacted those individuals that need access to the listed capital markets. If one could get by on private capital, then I would. If I needed more access, I would sell and let the purchaser be the public company. Global competition for investor money should be enhanced, since the rules for US capital would be significantly more stringent than other countries. Global competition for sales would be negatively impacted, since it would significantly increase our costs of goods sold.

08/15/2005 16:33:43   adversely. Our competition as a company is private companies in the U.S. as well as foreign processors from Brazil and Thailand. We operate in a low margin business, canned vegetables, therefore we can ill afford to be at a competitive disadvantage due to the cost of being public. When it was $160K, it was manageable- no longer.

08/15/2005 16:41:14   Adversely impacts.

08/15/2005 18:59:52   The burdensome aspects of the regulatory (effectively) increase the cost of capital and so adversely affect the culture of entrepreneurship and competitive ability.

08/16/2005 09:51:21   Decrease

08/16/2005 10:10:36   Yes. There is disincentive to tap the public equity markets.

08/16/2005 10:21:17   Little short term impact. Long term I believe SOX can make American companies more competitive.

08/16/2005 10:26:28   may reduce entrepreneurship; entrepreneurs do not tend to enjoy bureaucracy and it slows things down US companies may now be less competitive unless they were already far ahead of the rest

08/16/2005 10:27:48   The current regulatory environment certainly doesn't make businesss any easier. The entrepreneural spirit of small business has historically driven our econmony. Don't handcuff that spirit when it is "big business" that you want to rein in.

08/16/2005 10:42:02   If nothing else, the diversion of an inordinate amount of money and management focus to issues of internal control for the sake of satisfying regulatory requirements (as opposed to focusing fewer resources on more appropriate control systems and measuers) has unnecesarily reduced profitability and cash flow of American companies.

08/16/2005 10:44:16   As long as entrepreneurs can stay private, it has not had an effect. I think it's burdensome on smaller public companies.

08/16/2005 11:18:54   I believe it has adversely affected entrepreneurship. Making it more costly to go to market to raise capital, which this system does, will inevitably have an effect.

08/16/2005 11:41:07   Adversely impacted. Business is now much slower now that everything must follow process. If some does do so, or does go through a documented exception process, they can get fired. This discourages risk taking.

08/16/2005 11:52:16   Yes. We are paying for accountantants and lawyers rather than growing our business. Foreign entities do not have this burden.

08/16/2005 12:14:10   Entrepreneurs have often looked to the opportunity of an IPO and a public company while still a fairly small company--that is not possible until the company is of much larger size. American companies especially mid size or larger size companies should not have a problem competing Smaller companies will not have access to capital via and IPO and will be less compeittive.

08/16/2005 12:40:54   Destroys entrepreneurship. As a founder of a sucessful company I have watched the risk reward totally change. There is not reward for sucessfully taking risks, and hugh penalties for any mistakes

08/16/2005 12:42:56   The giant sucking sound isn't NAFTA anymore, it's the sound of entrepeneurial activity moving to Shanghai. There are two, and only two, factors causing this: SOX404 and FAS123.

08/16/2005 13:04:14   See 4. above. SOX compliance will most likely cause fewer entrepreneurs to use public offerings as a means of financing start-up and growth.

08/16/2005 13:12:04   The burdensome and draconian present "SOX" kills entrepreneurship. With the extra cost burden, we have trouble competing here in the US; we cannot compete on a "level playing field" with foreign competition if trying to do so from US locations. The only viable alternative is to compete in foreign markets from foreign locations. This what we are doing; in the long-run this will reduce US employment!

08/16/2005 13:19:29   Unknown

08/16/2005 13:20:23   I don't believe it has a major impact at all on either entrepreneurship or international competitiveness. I dont subscribe to the theory that the costs of SOX are a burden for US companies

08/16/2005 13:25:32   I believe the current system, post SOX, adversely impacts the culture of entrepreneurship. The cost of SOX, not just in financial assets but more importantly in management focus, is a competitive disadvantage.

08/16/2005 13:27:00   The current system makes it much more difficult to raise money and become a public company than it was in the past. The U.S. still has the best capital markets, but SOX has eroded the advantage.

08/16/2005 13:30:33   The current systems increases our costs over the costs incurred by our international competitors.

08/16/2005 14:08:05   No. Entrepreneurship is funded primarily by angel capital, followed by venture capital. Since private equity is growing very quickly, those funds will most likely finance good business ideas in the future.

08/16/2005 14:23:10   The current securities regulatory system clearly adversely impacts this country's culture of entrepreneurship. We have redirected significant resources from evaluating and analyzing how to improve efficinecy and profitablity to improving documentation and testing of controls. Executive time has been refocused from investing, capital projects, product development evaluations, mergers and acquisitions to the following: improving documentation of controls, evidence of controls, testing of controls, meetings with auditors, evaluations of deficinecies and related reporting of controls, deficiencies, and remediation. Clearly global companies and private companies are at an advantage relative to public US companies. The administrative, documentation, and consultant expense as well as the internal audit and exteral audit expenses are significantly higher for US public companies.

08/16/2005 14:44:16   Entrepremeurs are not looking for the public market in the planing stage unless they can clearly see a plan that will take the proposed venture beyond the small size - very negative. The small companies are not having a level playing ground with the global market as a direct result of SOX.

08/16/2005 15:15:12   Anything that adds to the overhead of running a competitive business adversely impacts that company's ability to compete. Entrepreneurship in this country remains high, but regulation continues to squeeze the opertion and dampen enthusiasm. This is especially true in the global market where competing companies from other countries are not saddled with the same amount of regulatory burden.

08/16/2005 16:08:50   If significantly changes the mode of entreprenuers who, for the most part, lose one possible avenue to raise capital.

08/16/2005 16:09:47   No opinion

08/16/2005 16:16:04   Definitely burdens the entepreneur.

08/16/2005 16:45:09   Yes! Entrepreneurs have little interest in complex regulatory enviornments. Those traped in that situation loss their entrepreneurship. Those not traped, avoid the enviornments. Yes!If you reduce entrepreneurship as noted in the prior comments you loss position relative to the global markets.

08/16/2005 18:35:41   Adverely impacts, due to the formal evaluation and certification of controls that must be considered for every new initiative.

08/16/2005 19:18:56   I believe our regulatory system adversely impacts the country's culture of entrepreneurship. I believe the country's culture of entrepreneurship remains strong but I do not think that the current regulatory system particularly enhances that culture. As I have said above, I think it is more difficult for smaller companies to gain access to the public capital markets and many smaller companies spring from entrepreneurial sources.

08/16/2005 21:29:07   Foreign firms seem to have far fewer constraints.

08/16/2005 21:40:38   SOX is as far from entrepreneurial as you can get. There are only so many hours in the day. Time spent on pretending to look for enron ghosts is time not spent minding the business.

08/17/2005 10:59:57   The current regulatory system has adversley impacted our country's culture of entrepreneurship by limiting public equity markets for smaller companies to tap into because of the cost.

08/17/2005 12:28:22   It has hurt us in a way that we spent an incredible amount of time and resources on SOX 404 and received little value, where we could have invested that money in executing our strategic growth plans faster.

08/17/2005 12:36:00   American public companies remain a beacon of stability and performance.

08/17/2005 12:48:33   Decreased. Cost and fear.

08/17/2005 18:49:20   Why does being held accountable for fairly stated financial statements and strong controls run counter to being a good entrepreneur? The problem with too many entrepreneurs in smaller companies is that all too often, almost anything goes to get that next sale. This culture creates such a poor performance culture throughout the middle market since employees will respond to what they see. If they see their senior managers bending rules and walking on the edge, soon employees care less about doing things right. I believe SOX will over time, vastly improve American business.

08/17/2005 18:49:27   I think the overall securities regulatory system in teh US is very good, and particularly so for large companies. The additional burden on smaller companies undoubtedly raises the cost of public capital for smaller companies, raising the cost of capital means some otherwise attractive investments will not get made. This is the (I assume) unintended consequence of SOX - it will reduce overall investment by smaller public companies and smaller companies that want to become public. These smaller companies are the innovation engine in the economy and it is inescapable that the innovation engine is now less productive than it was pre-SOX

08/17/2005 19:31:08   It will adversely impact entrepreneurship since fewer small entrepreneurial companies will desire to go public. Therefore, the opportunities for a risk/reward payoff for entrepreneurs has been reduced. Therefore, I believe it will negatively impact the entrepreneurial spirit.

08/17/2005 21:27:12   I believe it has made it more difficult to complete due to the high costs of implementing and maintaining compliance with Section 404. For a small company the costs of compliance are significant as compared to revenue.

08/17/2005 22:55:14   It adversly impacts the culture of entrepreneurship and will adversly impact our ability to compete globally. We have a significantly higher regulatory burden than almost any other country.

08/18/2005 08:03:31   Not Applicable

08/18/2005 15:26:25   SOX now impacts real business decisions, such as whether to buy a new subsidiary or not because of the costs to comply and the timeline. In addition, investment in growth has to be curtailed in order to fund compliance costs.

08/19/2005 02:56:12   The tremendous level of required disclosures, while good for shareholders (at least those who can understand the disclosures), often puts smaller public companies at a competitive disadvantage to their private and foreign counterparts. This discourages new growth in public markets by putting registrants at a competitive disadvantage.

08/19/2005 11:44:44   I could foresee an impact whereby a newer company may look elsewhere (venture capitalists, private placement) if it needs additional capital to maintain its growth.

08/19/2005 12:28:03   Entrepreneurship is risk taking - the current regulatory system seems to be about limiting the public risk. If that is indeed the thrust then yes our ability is impaired.

08/19/2005 13:49:01   The culture of entrepreneurship in this country will not change because of the current securities regulatory system; what will change is the pace at which companies decide to move from being a private company to becoming a public company. As a result of this current regulatory system, US companies operating in the international marketplace are now imposing the US standards on their foreign operations causing them to modify the way they interface with their customers. In some cases this is limiting their ability to recognize revenue on items that would previously have been recognized. For example, in France, where the only credit reference that can be obtained is a statement from the Bank of France regarding whether or not a potential account has had any checks of insufficiency, companies previously relied on their relationship with a potential customer to make a decision regarding a possible sale. Now, with the requirements that have been promulgated with SOX, companies are waiting to either receive payment for an order directly from the customer or to receive a lease from a third party financing agency. This trend not only creates a problem for the US companies in recognizing revenue but also harms the interpersonal relationships between the local sales personnel and their customers as an air of doubt arises. Conversely, there are other international companies that operate in the US who, because they are not listed on any US exchange, do not have to comply with the provisions of SOX and therefore are spared the financial burden that US companies have to bear.

08/19/2005 14:40:28   The new regulatory requirements have had a defintie negative impact on entrepreneurship within smaller public companies in the short-term. Funding is tight and profit margins are usually tight for these firms. Every dollar spent on compliance is one dollar less for current entrepreneurial expansion. In the longer term (i.e. 5 - 8 years) this trend could reverse when the business community as a whole, becomes more efficient in expending resources towards regulatory compliance issues.

08/19/2005 14:50:07   No opinion.

08/19/2005 17:03:28   It may adversely impact entrepreneurship after a business reaches a certain size, but small businesses have other means of raising capital.

08/21/2005 03:34:34   I think that measures had to be taken after the Enron and Worldcom crisis; however, there was an overshooting, and small companies pay this price of over shooting. So now, that the scale went too much in one way, it does impair the ability of American companies to compete globally.

08/21/2005 04:46:26   Reduces entrepreneurship and competitiveness. See explanation in #3.

08/21/2005 22:19:50   Because compliance is so expensive, it makes the investment in business greater and could affect entrepreneurs.

08/22/2005 14:21:23   On smaller companies this has killed entrepreneurship becuase we are so wrapped up in documentation we have little time to do much else!

08/22/2005 15:20:23   Entrepreneurship is negatively impacted. In a start-up, growing enterprise, resources and focus are needed on operations and sales. SOX is a cost and distraction that penalizes entrepreneurship and does not provide an adequate cost/benefit.

08/22/2005 15:47:02   Probably low impact on larger companies. In fact, tigher controls make sense for diversified multinational companies where management has less visibility to the effectiveness of internal controls.

08/22/2005 15:47:34   It has not changed this country's culture of entrepreneurship. Competition is based on price and quality. Regulation affects cost. For small businesses the cost of compliance is disproportionate as compared to larger businesses that can spread cost over more units of production.

08/22/2005 17:54:28   Anything that increases costs and reduces flexibility will make entrepreneurship less robust. That is why heavily regulated countries have correspondingly less entrepreneurial activity. The same statement applies to national competitiveness, which also declines under SOX.

08/22/2005 17:56:59   Adversely impacted because of cost and distraction from effort of growing sales. Puts us at a competitive disadvantage.

08/22/2005 19:27:18   American will be entereneurs, but many more ideas will be stiffled by the cost of Sarbannes.

08/22/2005 20:10:17   At this point I would presume entreprenuers might seek venture capital infusion in lieu of a public offering, due to SOX and Internal Control compliance costs and issues.

08/23/2005 00:42:38   adversely impact - focus of management is on compliance, not on building a business. impared- see number 4 above.

08/23/2005 07:47:56   the current regulation system impact the enterpreneurship spirit and give advantace to non american companies that can spend less on regulation

08/23/2005 15:56:30   Public Offerings used to provide necessary capital and opportunity to entrepreneurs. Smaller companies, in complying with SEC rules, including the expanded disclosure requirements, lose competitive advantage over similarly sized, non-public competitors.

08/23/2005 16:49:34   The high cost of reporting for small companies definitely affects their ability to compete in a global basis.

08/23/2005 18:10:00   Not enhanced. Adds further burden to capital formation.

08/23/2005 21:11:03   The current regulatory frameworks, particularly SOX, will adversely impact the culture of entrepreneurship. The tone and context of SOX and similar regulatory frameworks its towards risk avoidance and punitive/criminal charges for even legitimate errors in judgement. There is nothing in the current regulatory framework that is intended to stimulate entrepreneurship, innovation, or riks taking. It is a far better situation right now for smaller companies to be private and have the latitude to make management decisions for the longer term, innovate based on best judgement, and avoid the continual second guessing of the regulatory and publich investment market place. Far better to have a smaller number of like minded private investors than the "I want it now" and "I will sue you if you don't perform" mindset of the public retail investment market.

08/24/2005 08:50:18   It's definitely hurt entrepreneurship in going to roundtables in the area. SOX is overdone. The main focus should have been on controls at the executive level where the large frauds occurred.

08/24/2005 10:14:02   SOX has negativly impacted the ability of US companies to compete on a global basis. Example - complete contract disclosures unwarranted.

08/24/2005 11:28:21   I do not feel that the regulatory system has negatively impacted the culture of entrepreneurship. However, I do feel that the ability to compete on a global basis has been negatively effected since the costs of compliance are significantly greater once you go beyond North America. With the higher cost strucutre in place, US businesses are at a distinct disadvantage to their foreign counterparts.

08/24/2005 12:24:07   It has reduced the flexibility for smaller companies to reward high levels of risk.

08/24/2005 14:30:13   Adversely impacted. I understand what SOX was meant to be but its overboard. Its penalizing companies that were ethical and doing things the right way before for the sins of other that weren't ethical. Its very difficult when you are a small company to have all the staffing and procedures and systems in place to be SOX compliant. We spend a lot of time focusing on these issues of being SOX compliant rather than on the business and therefore lose focus. Which impacts how you compete.

08/24/2005 16:19:27   Adversely impact. We have gone overboard. Again, the compliance costs are too high and the legislation is too far reaching. A much simpler less expensive solution is needed. We need to take out the good aspects of the legislation and kill those aspects that are costing so much to comply with. The two forms that the CFO and CEO have to sign quarterly are plenty of regulation.

08/24/2005 16:26:56   Generally, greater regulation deters entrepreneurship, and could cause entrepreneurs to seek other markets in which to operate. If our regulatory system isn´t competitive globally, the cost of capital in the US will be higher relative to foreign economies.

08/24/2005 16:54:47   Reduced. Small companies have traditionally taken risks and operated informally. SOX prevents that.

08/24/2005 20:16:09   It is adversely impacting small companies. The $75MM in market float is too low. We are a small community bank but must report and comply with SEC regulations that are the same for very large companies. It is expensive and of no increased value to our shareholders.

08/25/2005 13:39:06   Adversely impacted. Companies have incurred significant expense without increasing our ability to compete in a global market!

08/25/2005 15:23:41   The SEC reporting (besides 404) is still fair, however with the burden of SOX 404, entrepreneurship definately suffers due to the economic costs of the project.

08/25/2005 16:04:36   Entrepeneur's always find a way. The regulatory system is a necessary hurdle. No impact on global competition.

08/25/2005 16:26:29   Impaired due to negative impact on earnings and cash flow.

08/25/2005 17:02:43   Adversely impact. See answer to question 3.

08/26/2005 12:41:42   We compete directly with companies in India and China. Increased overheads make us less competitive.

08/26/2005 13:07:22   No Comment

08/26/2005 15:31:29   Over the long haul, the current system will enhance American companies. It encourages the entrepreneurship type cultures to implement the basic building blocks/foundation of regulations, corporate governess, controls, etc. into a more structured and reliable framework which should result in more reliable financial statements and ultimately a strong entity.

08/26/2005 16:22:08   I believe that SOX has made it more cumbersome for smaller businesses to enter the capital markets and therefore lessens their ability to compete.

08/26/2005 17:46:13   Very adverse effect on entrepreneurship.

08/26/2005 19:53:54   It is a significant adverse impact. It cuts off one of the most important avenues to investment capital as many entrepreneurs will not be able to comply and will therefore avoid the public markets. It is a huge negative for growth and innovation.

08/27/2005 11:21:03   It is a hindrance, because additional SOX compliance costs do not add value.

08/28/2005 23:37:43   Increased compliance costs compete head on with resources which otherwise would be dedicated to product or process improvements.

08/29/2005 07:07:37   Not significant either way.

08/29/2005 10:21:15   Our current goals do not include global markets, so we can only speak to the U.S. impact. As previously stated, we do believe certain provisions of SOX adversely impact the entrepreneurial culture. SOX adds significant regulatory burdens that require significant amounts of money to be spent on compliance exercises versus spending such resources enhancing the operational value of the business. Such regulatory burdens pose significant problems for start-up companies and, to an extent, limit their desire to delve into the capital market given the costs involved.

08/29/2005 10:21:25   Our current goals do not include global markets, so we can only speak to the U.S. impact. As previously stated, we do believe certain provisions of SOX adversely impact the entrepreneurial culture. SOX adds significant regulatory burdens that require significant amounts of money to be spent on compliance exercises versus spending such resources enhancing the operational value of the business. Such regulatory burdens pose significant problems for start-up companies and, to an extent, limit their desire to delve into the capital market given the costs involved.

08/29/2005 11:21:29   Anytime government get too heavily involved with regulating business, it has an adverse impact on entrepreneurship. Banking is already one of the most heavily regulated industries, and SOX increases the burden ten times. Would I want to start up a publicly traded bank in today's environment knowing what I'm going to have to do to comply with regulation. No way. American companies need government to assist companies in competing globally by making sure the playing field is as level as possible. The SOX burden just increases the advantages of foreign competition because it adds to the American companies cost of producing a product

08/29/2005 14:18:47   I do not believe that the current securities regulatory system adversely impacts the country´s “culture of entrepreneurship” for several reasons. One, the supposed impediments posed by SOX are not completely transparent. While some rather incredible numbers have been tossed around for the “costs” of SOX, aggregate corporate profitability in the post-SOX period has been robust. So, either firms have found ways to cope with increased costs imposed by the regulatory system - or they weren´t that onerous in the first place. Two, I believe that genuine entrepreneurs would find a way to deal with the regulatory system - they wouldn´t let it stop them from succeeding.

08/29/2005 14:53:30   2nd question: Impaired. Higher cost with no benefit to the company or its shareholders and misdirection of management time and company resources only raises small company operating costs and makes them less competitive (please see my answer to question 6. below).

08/29/2005 15:31:21   Over-regulation would always adversly impact the culture of entrepreneurship and the ability to compete because of the added costs of compliance.

08/29/2005 16:10:53   Adversely impacts the culture of public company entrepreneurship, not entrepreneurship generally. You may have to answer the second question----How much is enough? When our companies are at a substantial disadvantage and can't compete---then we will look at some of helpful way of fixing the system.

08/29/2005 16:20:53   No opinion

08/29/2005 17:09:27   The regulatory system has created a competitive disadvantage for smaller companies competing with non-public entities.

08/29/2005 17:12:26   I beleive it has had an adverse impact because of the large amount of scarce resources that have been diverted to deal with compliance instead of more entrepreneurship efforts. Probably impaired the ability to compete due to added costs.

08/29/2005 17:36:32   It is causing entrepuers like me to be subjected to an additional stress level.

08/29/2005 19:02:32   Again, small companies are adversely affected by the added cost of money and of time spent on dealing with regulations.

08/29/2005 19:05:24   Smaller companies have relatively limited resources. The current regulatory system was burdensome prior to adoption of SOX 404. With the additional requirements imposed by SOX 404, a significant amount of our executive management´s time is spent on technical regulatory compliance issues rather than business and operational issues. We believe this adverse impact on both smaller companies´ culture of entrepreneurship and their ability to compete in the marketplace is significant, particularly given the historical leadership role that small businesses have provided related to job creation and the development of new technologies and innovations.

08/29/2005 21:00:01   I would say the current securities regulatory system adversely impacts entrepreneurship where it involves taking a company public. I believe there are companies that are less likely to become public if they have access to capital in the private sector. This could potentially reduce competition from a global perspective.

08/29/2005 22:40:58   Current securities regulation with high compliance costs will continue to diminish our country's culture of creative entrepreneurs and our ability to compete against global companies that are not subject to the same regulations and costs.

08/30/2005 15:04:16   Entrepreneurship and regulatory control are contradictory terms. The very nature of an entrepreneur is free thinking and unconstrained. Where as, regulation implies structure, due process and control. While in the past, entrepreneurs could obtain support and help to advance their ideas - many such resources are no longer available as many players are unwilling to deal with the increased regulatory burden. Forget entrepreneurship in the USA, China and India will attract most of the capital.

08/30/2005 15:07:00   The current regulatory system adversely impacts entrepreneurship. Rather than companies focusing on growth they are focusing on whether the CEO indicated his approval of an expenditure by signing an invoice. The additional costs of SOX compliance has impaired American companies' abilities to be competitive.

08/30/2005 16:27:18   Adversely impacted. Entrepreneurs are not as able to enter the capital market due to increased regulation. The inability of companies to acquire other operations due to the timing and potential impact from SOX has limited large company growth.

08/30/2005 17:08:46   The current system has impaired the ability of American companies to compete globally due to the potentially adverse impact of the unique cost/compliance burden that is not present outside the United States.

08/30/2005 18:26:14   The current system adversely impacts entrepreneurship because executives, now requiring a higher level of sophistication to understand issues as they relate to SOX compliance, may no longer be willing to take entrepreneurial risks. The additional cost and burden damages the ability of American companies to compete with those that are free from these requirements.

08/30/2005 18:48:02   Having a good securities regulatory system is vital to this country's culture of entrepreneurship and to the ability of American companies to compete on a global basis. The current system is so-so. Its reputation is better than that of 3rd world markets but is an also-ran in comparison with some of the developed nations.

08/30/2005 18:51:48   We believe that smaller entrepreneurial companies thrive in a less formal environment. The structure required under the current securities regulatory systems will adversely affect their ability to compete on a global basis.

08/30/2005 19:47:16   See above answer.

08/30/2005 21:07:56   Adversely impacted the culture of entrepreneurship and impaired the ability to compete globally.

08/30/2005 21:39:41   We believe that current regulatory system has had an extremely negative impact on entrepreneurship in a public company. If foreign companies are not subject to SOX compliance requirements, they are at a big advantage because they can make decisions more quickly. This loss of competitive advantage will hinder the SEC registrants in the long term.

08/30/2005 23:57:28   The current system impaired the ability of American companies to compete on a global basis due to (i) Significant resource is allocated to SOX, lack of resource for business, like employ more marketing staffs, improving factilities. (ii) block their conference in acquiring overseas companies. Uncertain whether the overseas company can compliance with SOX due to culture difference.

08/31/2005 08:31:59   Adversely impact. More and more jobs are moving out of the US because the US companies are losing their competitive advantage. It costs more to operate a company in the US than abroad.

08/31/2005 09:09:25   The current system adversely affects entrepreneurship because of the high cost of being a public company.

08/31/2005 10:19:14   The advent of SOX may drive small entrepreneurial companies to remain private companies with less than 500 shareholders. If a small company goes public, the cost of SOX,executive compensation and US based wages and benefits can certainly make it difficult to compete on a global basis.

08/31/2005 10:21:37   Adverse impact as entrepreneurs have an aversion to devoting resources to the effort. The system does impair American companies to compete globally as some foreign companies do not appear to be restrained by corrupt practices.

08/31/2005 14:00:16   SOX clearly discourages new company development. The costs are just too great. This is unfortunate since U.S. capital markets pride themselves on just the opposite.

08/31/2005 14:12:37   In the short-term, we believe it is clear that the current securities regulatory system has had an adverse impact on U.S. companies when compared to their foreign counterparts. In our experience, we have seen smaller companies with $100 - $200 million in annual revenues spending $1 - $2 million just to comply with the provisions of SOX 404. While similar-sized foreign companies can invest these dollars into research and development, public companies in the U.S. are dedicating large amounts of dollars to regulatory compliance. What remains to be seen is the long-term impact. Hopefully, the current regulatory system will achieve its intended results and U.S. public companies will be able to command investment premiums because of the improved internal control environments. However, our clients remain skeptical that this will occur.

08/31/2005 14:25:37   The current system has had a major adverse impact. Two companies I am working with now on loans: first question, how do I stay out of SEC registration.

08/31/2005 15:19:27   I feel that it has an adverse impact as it dampens the entrprenerial spirit and indirectly forces corporate and mgmt structures to conform to a model that is SOX compliant, regardless of whether or not that is best for the company. The initial impact in the global market is simply the costs. It strains the bottom line. In many markets companies are not able to raise their prices to cover these additional costs.

08/31/2005 16:05:33   I think it may help enhance the culture because it informs investors but puts American companies at a disadvantage because everything in their businesses is disclosed.

08/31/2005 16:13:45   The current securities regulatory system has adversely impacted both the culture of enterpreneurship in the United States and the ability of American companies to compete on a global basis due to unnecessary regulation and fear of litigation.

08/31/2005 16:16:33   5. The current securities regulator system probably has not adversely impact this country´s culture of entrepreneurship. However, it is too soon to determine this impact. Generally, entrepreneurs have a number of avenues to attract capital and create new companies. In the world of SOX, entrepreneurs have alternatives for raising capital if they are concerned with complying with the current system.

08/31/2005 16:29:59   Yes, costs determine where items are manufactured, costs incurred in this country that are not incurred by firms in other countries results in an disadvantage for US companys and certainly small companies trying to obtain a manufacturing foothold.

08/31/2005 17:16:33   Of course it has adversely impacted the culture. 404 requires every decision point to be documented. We have trained our managers to price based on many factors. Once 404 is in place they will have to work towards a company approved matrix rather then apply good sense and reasoning to their individual decisions. Does that sound intrepreneurial?

08/31/2005 17:57:10   Yes, diminished due to the additional significant compliance cost and time involved.

08/31/2005 18:22:30   We do not believe it has much of an impact one way or another. We are simply seeing a shift in how entities monetize the results of their efforts. We think the U.S. system overall provides a competitive advantage to U.S. based global companies. Our system is the most transparent world-wide, and thus provides the lowest relative cost of capital.

08/31/2005 18:23:08   Adversely impacts – more time is spent on formalizing processes and procedures than being practical about what it takes to get a business going and growing it. A business can still account for their finances accurately without jumping through extensive hoops. From a competitive standpoint, it has to impair the competition globally because the costs of doing business are not the same

08/31/2005 19:16:05   5. The answer to this question will depend on what alternative funding mechanisms develop for products and companies that service smaller markets or develop niche products, but unfortunately public equity will probably cease to be a viable alternative for these types of companies under the regulatory environment that is now developing.

08/31/2005 20:55:07   The current securities regulatory sytem will severely cramp the entrepreneurship in this country because the only viable exit strategy for those start ups is to be acquired, as the cost of getting ready for an IPO is prohibitive. If this had been the case in the past we would never have seen such companies as Apple, Cisco, and many others. This would curtail technological innovation and creativeness in this country.

09/01/2005 11:40:19   I think American companies are less competitive with privately held businesses and foreign companies due to the additional costs and focus of management on 404.

09/01/2005 14:30:54   There can be no doubt that SOX has discouraged smaller companies from doing public offerings – the burdens are just too great. This forces small companies to seek new capital in other areas which, in the long term, do not have the potential for appreciation of stockholder value. In short, the management (usually the owners) of smaller companies must give up more control to outside investors who will not give as much “credit” for success as the public market might.

09/01/2005 17:12:34   It adversely impacts entrepreneurship. Many small companies will have to consider other avenues of obtaining capital rather than through this country's public markets. We figure it takes $500k to open a direct office in an international market. The first year of SOX compliance could be the equivalent of 3 to 4 international offices. This is hurting the company's ability to compete with larger competitors.

09/04/2005 07:42:16   We are a foreign company

All Survey
Main Survey



Modified: 10/13/2005