Prometheus 6

This is NOT the German Marshall Fund.

This is the Committee on Capital Markets Regulation, just announced yesterday, and only anti-civil rights organizations are named more cynically. It should be called the Committee on Capital Markets DeRegulation.

Panel of Executives and Academics to Consider Regulation and Competitiveness
By FLOYD NORRIS

A committee filled with business leaders and academics was created yesterday to consider changes in the Sarbanes-Oxley Act and other laws and regulations governing securities markets and companies, with the intention of improving competitiveness for American markets.

The group, called the Committee on Capital Markets Regulation, has no official status but the announcement of its creation included praise from Treasury Secretary Henry M. Paulson Jr., who said that the issue of American competitiveness “is important to the future of the American economy and a priority for me.”

Who are these guys?

Among the committee members are Samuel A. DiPiazza Jr., chief executive of the accounting firm PricewaterhouseCoopers, and Donald L. Evans, the former commerce secretary who is now chief executive of the Financial Services Forum, a lobbying group for major insurers, banks and investment banks. Mr. Paulson is a former chairman of the group.

There are also chief executives of DuPont, Office Depot and the CIT Group, and top officers of mutual fund companies, Lehman Brothers and the New York Stock Exchange. William G. Parrett, chief executive of Deloitte Touche Tohmatsu, another major accounting firm, is also a member, as is Ira M. Millstein, a leading corporate lawyer.

And what is the first suggestion they have to improve the competitiveness of American markets?

Among the issues to be considered are whether laws need to be changed to limit both civil and criminal liability for companies, auditors and directors. One matter Mr. Scott cited is the proper role of state governments in financial market issues, including the cases brought by Eliot Spitzer, the New York State attorney general.

The committee will consider whether Section 404 of the Sarbanes-Oxley Act, which requires audits of internal controls at corporations, should be changed. Critics say that such audits are too expensive and have kept foreign companies from listing their securities in the United States.

Mr. Scott said the committee would also review whether the Securities and Exchange Commission needed to adopt better procedures to weigh the costs and benefits of its regulations, and whether some other government agency should be charged with reviewing those decisions.

The final area to be discussed, he said, is shareholder rights, including the efforts of hedge funds to force changes in corporate policies, and whether shareholder approval should be required for takeover defenses.

This is wrong on several levels. I need to come back to this...probably later today, definitely no later than tomorrow.