According to this report from Huffpost, two Democrats will offer amendments to Sarbanes-Oxley Act to weaken it. John Adler and Carolyn Maloney are the guilty parties.
Sarbanes-Oxley was passed as a response to Enron, Worldcom and other past accounting scandals. It applies to publicly traded companies. The purpose was to restore some level of credibility to publicly disclosed information particularly financial statements. It requires a third-party audit of internal reporting controls.
But I guess that is too much for these two Democrats. First, Adler's potential amendment:
Adler, a member of the pro-business New Democrat Coalition, is proposing to exempt publicly-traded firms with market capitalization less than $700 million from a provision of Sarbanes-Oxley mandating an external audit of the firm.
Specifically, Adler's provision calls for "less stringent requirements" for these firms, and would require the Securities and Exchange Commission -- the federal watchdog overseeing the capital markets -- to develop rules that would ease the "burden" on these firms. But until the SEC developed those rules, firms worth less than $700 million would be completely exempt from mandated external audits.
Check this complete bullshit justification for this amendment (from spokesperson for Rep. Adler):
Congressman Adler's amendment will exempt small businesses from cost prohibitive regulations. Small businesses are the backbone of our local economies and this necessary reform will help keep and create jobs for hard working Americans."
What fu*cking small business are they talking about? When it comes to small business publicly traded companies certainly don't come to mind particularly ones with less than $700 million market cap.
I like this quote from a former high ranking SEC official:
"What Adler is really doing is dialing for dollars," said Lynn E. Turner, chief accountant for the SEC from 1998 to 2001. "He's got a job that he wants to keep, and he has to run for that job every two years. So this is probably a strong indication that Adler couldn't care less about investors, and cares much more about getting the money so he can keep his job."
Now for Maloney's amendment:
Maloney's amendment, co-sponsored with Rep. Scott Garrett, a New Jersey Republican, would exempt from the independent audit requirement entirely those publicly-traded firms with market capitalization less than $75 million.
Amazing. I am sure she would try to use the small business excuse as well. This despite a SEC study that shows the cost of complying with Sarbanes goes down after the first year of compliance.