Skipper Sees Another Year of 'Tough Sledding' for Big Tech

8. Recently, you've expressed concerns that some of the governmental attempts to reform Wall Street and corporate governance are misguided. Would you elaborate?

It is really important that we reform the securities industry. During the bull market, there were several flaws in the regulatory fabric that were exposed. They were compounded by bad behavior by what appears to be a small number of very influential people.

My concern is largely that regulators appear motivated by as much political concerns as a desire to make the securities business a better place. In the process, they've chosen a set of issues that to me don't feel like the most important ones.

To me, the American capital markets are the greatest in the world and are a crown jewel in our economy. Protecting the integrity of the capital markets is the prime directive of the Securities and Exchange Commission, the accounting industry and the brokerage industry. That's how we make our livelihood and it's really important that we all protect it.

When it comes to issues like financial disclosure and all that, we should always err on the side of more disclosure to the extent that new regulatory efforts induce greater levels of transparency.

What we shouldn't lose sight of is that most of what Enron did was actually legal. It is alleged that they looted the company. But those off balance sheet things, where they owned 97% but got to remove it from the balance sheet, that was perfectly legal! You know who allowed that to happen: The Financial Accounting Standards Board.

They actually passed specific rules to enable that during the 1990s! People are not paying attention to the role the accounting industry, in particular the FASB, played in the financial shenanigans of the past few years.