X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Smaller U.S. public companies got an additional one-year reprieve Wednesday from a key part of the anti-fraud law enacted after the series of corporate scandals in 2001-2002. The Securities and Exchange Commission voted 5-0 at a public meeting to give smaller companies a second extra year — until July 2007 — to meet the requirement to file reports on the strength of their internal financial controls under the Sarbanes-Oxley Act of 2002. A number of companies, especially smaller ones, have complained about the burden of complying. It was the SEC’s first public meeting presided over by Chairman Christopher Cox, whom President Bush chose in June to lead the agency after the surprise resignation of then-chairman William Donaldson. Cox, a free-market conservative and former securities lawyer who was in Congress for 16 years as a California Republican, left the House to assume the SEC job last month. He has walked a delicate line, stressing the importance of protecting investors while remaining neutral on controversial regulatory issues. Cox has said he would not allow enforcement by the SEC to slacken. Wednesday’s move by the regulators giving smaller companies an additional reprieve “in no way reflects any desire to back away” from the requirements of the Sarbanes-Oxley law, Cox said before the vote. The SEC already in March gave smaller companies, defined as having a market value of up to $75 million, a one-year delay in complying with the internal controls rule. Smaller companies have complained about the impact of the law enacted at the height of the scandals that ensnared Enron Corp., WorldCom Inc. and other big corporations, saying it is too costly and difficult to comply. Last December, the SEC set up an advisory committee to help it understand how smaller public companies are being affected by the anti-fraud law and securities laws. The panel recently recommended an additional year’s delay for the internal controls rule. The SEC also has considered possible revisions to the anti-fraud law itself. Copyright 2005 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.

Want to continue reading?
Become a Free ALM Digital Reader.

Benefits of a Digital Membership:

  • Free access to 3 articles* every 30 days
  • Access to the entire ALM network of websites
  • Unlimited access to the ALM suite of newsletters
  • Build custom alerts on any search topic of your choosing
  • Search by a wide range of topics

*May exclude premium content
Already have an account?

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.