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Privacy Is Overrated – Executives at publicly held companies insist they want to take their firms private. They’re lying.

Privacy Is Overrated – Executives at publicly held companies insist they want to take their firms private. They’re lying.

by Rick Turoczy on September 22, 2004

Corporate America is whining about costs associated with the Sarbanes-Oxley Act, the regulatory bill passed in the wake of the corporate scandals. A study released last week by the law firm Foley & Lardner found that 21 percent of public firms surveyed said they were considering going private “as a result of new corporate governance and disclosure reforms.” Business Week’s May 24 issue suggested that smaller companies are avoiding the public stock markets, perhaps hindering capital formation.

But while many executives are bitching about the costs of Sarbanes-Oxley, few are doing anything about it. If being a public company were really so troublesome post-Sarbanes-Oxley, managers, being rational creatures, would be taking their companies private at a rapid rate. And they’d be shying away from taking private companies public. The data shows neither is happening. Since Sarbanes-Oxley went into effect, more than twice as many companies have gone public as have gone private.

Privacy Is Overrated – Executives at publicly held companies insist they want to take their firms private. They’re lying.

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