Drooping SOX

Boy, do I ever feel of two minds about this one. Fact is, I think Sarbanes Oxley, the securities disclosure megadeath act, is mostly a bad idea—a lot of makework paperpushing that increases the chances of discovering corporate malfeasance from, oh say one in a billion to, oh say one in a million. I don’t see any plausible evidence that it is causing a rush away from American markets but (except for the lawyers and accountants and assorted seminar proprietors who have flourished in its wake, or rather by churning out its wake) it seems to be an annoying waste of time.

And guess who is the latest recruit to the drooping-SOX club? Drum roll…that’s right, our old friend Michael Oxley of Ohio (link), co-author, or at least co-marquee-host, of the legislation that bears his name. Would he do it differently today? “Absolutely,” says Oxley. "Frankly, I would have written it differently…" And then in a deathless finish:

“But these were not normal times.”

Damn straight these were not normal times. All those little investors who have such a stake in American capitalism (as the Republicans keep reminding us)—all those little investors had fire in their eyes, and steam coming out of their ears. They were looking for revenge, and Oxley, who up to that point had (almost?) never met a management abuse he didn’t like, was in danger of getting his sorry corporate lapdog butt shot off. What he meant to say was “I would have written it differently, but when it came to choosing between good legislation and my own career, why the question just answers itself.”

Steve Bainbridge, the kind of guy who ought to know better, bills this as “Oxley Recants” (link) (see also Tigerhawk (link))..

Yeh, right. American Heritage Dictionary gives “recant…v.intr. to make a formal retraction or disavowal of a previously held statement or belief.” Dictionary.com gives: “L recantāre to sing back, sing again.” Perhaps better “singing a different tune.” Anyway, if Oxley in his Congressional career had been more serious about seeking true functionality and integrity in securities markets, we might not be in the mess he helped to create.

Fn.: In the elided portion of the quotation, Oxkley says “and he would have written it differently,” referring to his co-author former Sen. Paul Sarbanes. Be interesting to see whether this is true.