The Long Arm of the Sarbanes-Oxley Act.(EDITORIALS)
Byline: THE WASHINGTON TIMES
The names Sarbanes and Oxley are being begrudged all over Europe and Asia. That's because the Sarbanes-Oxley Act, which President Bush signed in July, lays down regulatory guidelines, not just for American companies, but for foreign companies that list in U.S. stock exchanges as well.
"There is such a thing as overreacting and overshooting the mark," said Frits Bolkestein, European commissioner for the single market, regarding the law's application to foreign companies. His comment is generally reflective of foreign perceptions of the law. In particular, Sarbanes-Oxley's requirement that chief executives and chief financial officers certify earnings and that auditing functions be segregated from consulting services have been bitterly criticized abroad. Also, the so-called noisy withdrawal provision, which requires corporate lawyers to drop their client and inform the Securities and Exchange Commission of their withdrawal if they come upon incriminating information, has also been quite unpopular.
Many U.S. companies are also less-than-enthusiastic about having to comply with stricter regulations. And, since the Sarbanes-Oxley Act sought to restore investor confidence in wake of the Enron and WorldCom implosions, it makes sense that, in the interest of uniformity, foreign companies that list on U.S. exchanges should follow the same rules as U. …