London and Hong Kong ‘Heart’ Sarbanes-Oxley
Jan. 10, 2007 — Note to visitors from Wikipedia: The Sarbanes Oxley entry at Wiki claiming that this post supports the notion that “The amount of business displaced from Wall Street to the City of London remains disputed” is incorrect. My entry below notes that displacement is taking place and quotes ONE person relative to the percentage of new IPOs being listed in the US since SarBox. Though some may be disputing what that person has said elsewhere, no “dispute” of that person’s statement is noted here. A contemperanous BizzyBlog post noting this is here.
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2 PM UPDATE: Thanks to Kudlow’s blog for linking to this post!
I’m getting the impression that there might be interest in bumper stickers and perhaps other items containing the (ahem, copyrighted) design below. If you are in the financial, business or political community, e-mail me at this e-mail address and let me know the particulars of what you might like to see (products, number of people involved), along with the necessary contact info (e-mail and phone number at least). Prices will be comparable to similar items seen elsewhere.
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Sarbanes-Oxley Quotes of the Day: Kudlow Discussion Group and John Fund Column
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If people won’t listen to the US business and investing communities about the negative impact of Sarbanes-Oxley, maybe they’ll take note of the unconcealed glee overseas.
Here’s one example from Larry Kudlow’s show last Thursday (posted at his blog on Friday), on the post-SarBox IPO (initial public offering) dry-up (bold is mine):
Mike Holland: I’d like to put a fact in here. Before Sarbanes-Oxley, 50 percent of all IPOs around the world listed in the United States. Would anyone, including Herb, like to guess how many since Sarbanes-Oxley have listed in the U.S.?
Herb Greenberg: Give me the number.
Mike Holland: It’s 8 percent. And the last 25 largest IPOs, they all listed abroad. I was in Europe a couple weeks ago–they’re talking about erecting statues to Sarbanes and Oxley in London’s financial center.
Kudlow: Yes. Absolutely. ….. That’s what people don’t understand. We’re going to lose competitiveness.
John Fund, at today’s OpinionJournal.com, notes Hong Kong’s gratitude for SarBox (bolds are mine):
Increasingly, Hong Kong and London are the places where companies are finding it easier and cheaper to list their shares and raise capital. Last year, of the 25 largest initial public offerings in the world, only one took place in America. This year, Hong Kong is likely to end up as the No. 1 market for stock offerings world-wide.
Perhaps the top culprit in New York’s relative decline as a trading center is the Sarbanes-Oxley corporate accountability rules that were put in place in 2002 in the wake of the Enron and WorldCom scandals. Henry Tang, Hong Kong’s financial secretary, couldn’t be more blunt on the good fortune Sarbanes-Oxley has brought his city. “Our success is giving [Treasury Secretary] Hank Paulson a few raised eyebrows,” he told a delegation from the Fraser Institute, a Canadian free-market think tank, last week. “Thank you, Mr. Sarbanes and Mr. Oxley,” he said, referring to Democratic Sen. Paul Sarbanes and GOP Rep. Mike Oxley, the law’s chief sponsors.
….. Our foreign competitors ….. are taking advantage of our curious refusal to reform our financial markets, which could make the U.S. a global also-ran. As one leading Hong Kong businessman told me, “Your current policies amount to unilateral disarmament in the contest for IPO’s. The next year or so will be a test for whether you can wake up in time.”
Are we really going to cede an entire sector of the financial services industry to overseas competitors without a fight because of a bunch of unnecessary busywork?
Cross-posted at NewsBusters.org, with additional media bias-related commentary provided there.
Sarbanes Oxley and acts like it are purposely designed to tighten control over free enterprise which makes enterprise, of course, less free. Sooner or later the entrepreneurs who fuel the economic engine get tired of funding parasitic government bureaucrats and rapacious “global elite” banking interests.
They quit working and that is the end of an economy and the civilization.
It has happened before. It can happen again and the trend of burdening actual producers with “one size fits all” regulations is accelerating not decelerating.
Once Basel II takes hold in the U.S. adding to Sarbanes Oxley, the super control agenda of the “very best global elite” will be fulfilled and we can expect economies and civilization in general to deteriorate very rapidly.
What’s the answer?
Well, we think it is financial literacy. How many people engaged in business really understand an Income Statement? A Balance Sheet? A Cash Flow Statement? Every one engaged in business should understand these financial reports and their personal responsibility to ensure reporting accuracy.
But the % of individuals engaged in business that truly understand financial reporting is probably very small. And so they make mistakes or are open to fraud perpetrated by ethics deficient “experts”.
The market crashes, the public is shorn and their savings harvested.
Some politicians rise up on their hind legs, wring their hands and pass legislation to “protect the public”. The law gets applied to everyone whether they had an ethics problem or not. Usually, the fox in placed in charge of the chicken coop as was the case with Joe Kennedy being made the first SEC chairman by Roosevelt after Kennedy made a fortune short selling before the created crash of 1929.
The “global elite” pay their 100 million or so in fines
negotiated by their global elite attorneys and then carry on business as usual working their fines and cost of compliance into their numbers.
The true entrepreneur gets squashed further.
The only way the “global elite” get away with this racket is to make the subject of finance so complex that us ordinary beings can’t confront it.
The answer is to simplify the subject matter so a critical
mass of businessmen will truly understand the language
of finance and its rules, will see how they are getting ripped off by parasitic elements and will “throw the rascals out”.
Our latest course – Sarbanes Oxley Simplified make that
actual act understandable and fun to learn.
Maybe enough people will spot the super control agenda
behind acts like Sarbanes Oxley and Basel II and take back
ownership of their countries and economies from the parasites.
Kind regards
Jessica Byrnes
Competence Software Inc.
Comment by Jessica Byrnes — December 5, 2006 @ 10:03 pm