Start-Ups Slam Into Sarbanes

Bryce Linsenmayer knew Sarbanes-Oxley would affect his work as a corporate attorney. What surprised him was just how it did.

Last year, a client asked Linsenmayer, a partner at Haynes and Boone in Houston, about listing on the London Stock Exchange. Frontera Resources, a Texas-based company exploring for oil in the republic of Georgia, wanted closer access to European investors. But there was another reason driving its desire for a U.K. listing: Frontera was eager to avoid the millions in costs to comply with Sarbanes-Oxley.

As word of Frontera's British IPO spread, Linsenmayer began hearing from other small U.S. companies hoping to debut on the LSE's Alternative Investment Market for small companies. Again and again, Linsenmayer heard that one of the main reasons these start-ups were looking to list abroad was to sidestep Sarbanes-Oxley burdens. ...