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Sarbanes-Oxley corporate reform measure under attack

Sarbanes-Oxley corporate reform measure under attack

by Rick Turoczy on January 4, 2005

Two-and-a-half years after Congress passed the most sweeping corporate reforms since the Great Depression, trade groups are maneuvering to revise them, arguing that they are too expensive, too time-consuming and too much trouble for small businesses.

In recent weeks, industry coalitions including the American Bankers Association and the trade group AeA, formerly the American Electronics Association, have asked their members to gather complaints about costly requirements for tuning up their financial systems to help uncover fraud and mistakes.

The effort is part of a broader campaign to modify the Sarbanes-Oxley Act, passed in 2002 after financial blowups at Enron and WorldCom cost investors billions of dollars and exposed serious lapses in the way companies are governed.

Mutual-fund giant Fidelity Investments persuaded Sen. Judd Gregg, R-N.H., to insert language into a conference report in November on a fast-moving spending bill, directing the Securities and Exchange Commission (SEC) to justify a new rule that forces fund companies to appoint directors without ties to management.

The U.S. Chamber of Commerce has hauled the SEC into court over the rule.

Sarbanes-Oxley corporate reform measure under attack

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