Politicians love Sarbanes-Oxley. It showed their prior inaction action reaction to Enron, Worldcom, Adelphia et al. In July of 2002, they were decisive with votes of 423-3 in the House of Representatives(Note that Ron Paul was one of the 3 Nays) and 99-0 in the Senate and a very rapid non-veto from President Bush.

Since then, there’s been a lot of talk about how expensive certain provisions are (Section 404) and how it makes it tough to be a public company…blah blah blah. Those complaints are all a big distraction really and that’s all that we seem to hear about the bill - complaints about complying and all the stock listings we’ve lost. And here I thought SarbOx was supposed to be all about punishing bad corporate executives, bad accounting firms and bad corporate attorneys for misleading investors and in so doing, creating confidence in the financial markets. The act even created a whole new part of the Federal government to supervise this whole mess, the PCAOB (we need bigger government I guess.)

Please take a few moments and think about all the Sarbanes-Oxley violations that have occured since 2002. HMMMMMM!?!?! Tough right? How many execs do you remember taking the “perp walk” for financial statements that were fraudulent? You cannot include Enron, Worldcom, Adelphia or any other company that encourage Congress to protect investors. Try to only name companies or execs that were naughty after SarbOx was put into place. Good luck. Here is a help…check with the SEC and see how many SarbOx violations they have enforced or with the PCAOB and see how many of the companies / execs / accountants that have been punished are familiar to you.

Since it is so difficult to come up with a few(or any) names, you might think that SarbOx is a huge success. Draft a law, pass it almost unanimously(always watch out for unanimous legislation), and then tadaaaaaa … no meaningful enforcement actions must mean that everyone was so afraid of being naughty they just cleaned up their act. Well, that might be what the supporters of the legislation want you to believe. But do you believe that? Really?

With all the goofy financial statements coming from the finance industry over the past few years…do you have confidence that the statements were 100% accurate?