Mismatching SOX

Naturally the pressure to fully release firms below $75 million in market capitalization from Section 404 raises troubling issues, since it is historically the penny stocks, and not larger firms, where most of the accounting scandals have been discovered. In fact, the NYSE does not even want to list firms that small.

Meanwhile, when we ask CEOs how they feel about most Sarbanes-Oxley elements such as curtailing options backdating, eliminating covert executive loans, stopping legal late reported insider stock sales, disgorgement of executive bonuses from companies which collapse, whistleblower protection, independent financial expertise on an audit committee and improved oversight of public accounting firms, they applaud such reforms.

Our CEO surveys also tell us that 85% feel their firms under-invest in nanotechnology -- but then 92% later admit they have no idea what nanotechnology really is. Perhaps the ideological pronouncements and public grandstanding last week have brought more heat than light to the reform process.

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