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Thursday, July 01, 2010

SCOTUS Takes on Sarbox

In a decision released on June 28, the U.S. Supreme Court struck down a portion of the 2002 Sarbanes-Oxley law. That's good news, but much more is needed from our elected officials to rein in this law that imposes heavy regulatory costs on the business community, including small businesses.

Sarbox was a knee-jerk reaction to the Enron and Worldcom scandals. Government regulation always comes with costs, but when passed in hasty fashion - with politics completely overwhelming economics - many costs and consequences get ignored. Sarbox, for example, discouraged many firms from going public, thereby making it far more difficult for entrepreneurial firms to gain access to the capital needed to innovate, invest, expand and hire more employees.

The U.S. Supreme Court decision, unfortunately, does not directly address these matters. But it does bring some much-needed accountability to regulation under the law...

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