Also, the top administration officials including Bush, Dick Cheney, and Treasury Secretary Henry M. Paulson Junior are gearing up their support in an effort to eliminate post Enron-World Com regulations by claiming that the laws (Sarbanes Oxley Act) enacted by the Congress in October 2002, to protect investors from corporate-accounting frauds, are restricting the US competitiveness in the world at large.
On March 14, 2007, The Wall Street Journal carried an article by Ana Company, Russell Gold, and Chip Cummins in an effort to spin the earlier proclamations made by the top Bush officials that claimed that the securities industry must be freed from the excessive regulations that is impeding the Corporate America.
The article, apparently, defended the Halliburton’s move to shift its headquarters to Dubai by claiming that, “It’s unlikely that Mr Lesar moving to Dubai will shield the company from a variety of Congressional investigations, and DOJ’s inquiries, and that the shifting of office was a result of the three year oil boom, which has led to big investments, and increasing heft in the region.”
The US major business news channel CNBC also ran a special programme in its “Kudlow & Company,” by Larry Kudlow, in which it invited the Treasury Secretary HP in an effort to make the case that could eventually lead to the overall elimination of the SOX.
The debacle of Enron-WorldCom forced the Congress to evaluate the then prevalent financial statements disclosure requirements. In October 2002, the Congress finally passed the Sarbanes Oxley Act in an effort to save investors against the corporate frauds. The SEC also created an oversight board – commonly known as the Public Company Oversight Accounting Board (PCAOB) that could monitor the accounting industry, tighten audit regulations and control, and toughened the punishment against executives who commit frauds.
The company has its presence in Iraq and remains one of the major providers of the logistics support for the US military. Its decision to move the company’s HQ to Dubai can very well be linked to the changing ordeal involving the Congressional, and DOJ’s (Department of Justice) investigations. To keep the matter secret, blame is being shifted towards the harms that stiffer regulations are causing in making the corporations leave for the off-shore.
But that’s not all of it! Stiffer regulations are also being attacked as though laws that are enacted to protect investors against the corporate frauds are making the US less competitive in the world market. Despite the correction that was set in the US capital markets last month, the hedge funds, and private-equity funds still seems to be in tact, and financial managers still reap profits.
Amidst all this power game, the US capital markets remain to be the world’s largest attraction for the foreign capital, as more than $2 trillion worth of US stocks are still held by the foreign investors. And there remain thoughtful concerns as to how regulations can be improved.
Former SEC’s Chairman Arthur Levitt and Christopher Cox (current SEC’s Chairman) have addressed many of the issues including evaluation of the infamous Rule 404, and the manner in which FAF’s (Financial Accounting Federation) board of trustees should be appointed, but the way current US politics has it – nothing can seriously be anticipated. Not, at least, during the hawks’ administration.
The writer is based in the US. e-mail: razaalmashadi@msn.com