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U.S. zeal for reform cooling as trials heat up

U.S. zeal for reform cooling as trials heat up

by Rick Turoczy on January 24, 2005

The U.S. wave of corporate governance reform, widely emulated in Canada and elsewhere, has stalled, critics warn, even as the showcase trials of alleged boardroom bad boys Kenneth Lay, Bernie Ebbers and others are finally at hand.

If Big Business has its way, a spate of regulations to deal with the ethics meltdown, including some key parts of the watershed Sarbanes-Oxley law, may now be watered down, meekly enforced or simply forgotten.

“The pace of reform has come to a grinding halt,” said John Coffee, a securities law professor at Columbia University in New York.

This month marks a crucial milestone as several disgraced CEOs go on trial.

Canadian-born Bernie Ebbers, who guided WorldCom to the largest bankruptcy in U.S. history, went to court last week in New York. Also last week in New York, former Tyco chief executive officer Dennis Kozlowski began his second trip to court (the case ended in a mistrial last year).

Two other landmark cases are also gearing up.

U.S. zeal for reform cooling as trials heat up

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