The IPO Task Force and Sarbanes-Oxley

After many months, the IPO Task Force consisting of 36 individuals (in addition to CEOs and institutional investors), made the following conclusion on October 20, 2011: “In summary, the IPO Task Force has concluded that the cumulative effect of a sequence of regulatory actions, rather than one single event, lies at the heart of the crisis. While mostly aimed at protecting investors from behaviors and risks presented by the largest companies.”  Essentially, this same conclusion was described in detail in Wave Theory for Alternative Investments last year:

The Sarbanes-Oxley Act

“As small, fast-growing companies look to grow and head toward an IPO,
Sarbanes-Oxley, which held CEOs and CFOs accountable for the accuracy
of their company’s financial statements, has turned into a hindrance,
not a help. Sarbanes-Oxley is about as useful as surfing with a two by four
and as helpful as throwing a heavy anchor to a surfer washed out to sea by
a sudden, vicious storm. The intention might have been good—to help
the surfer—but it was not done the right way, and the expenses have
thwarted many fine companies from going public. Moderation would be
more helpful with venture capital. On one hand, you do not want to redtape
and restrict-to-death growth companies. On the other hand, you do
not want a free-for-all. Companies that want to go public in the United
States are now looking abroad to markets in Europe or Asia where restrictions
are not as stringent nor costs as high. Sarbanes-Oxley costs small public
companies a lot of money to comply. Not a lot of companies have extra
funds to throw around.”

Wave Theory for Alternative Investments, Chapter 8, Venture Capital Market Dynamics, Pages 131-132

This entry was posted in Uncategorized and tagged , , , , . Bookmark the permalink.

One Response to The IPO Task Force and Sarbanes-Oxley

  1. Greetings! Very helpful advice on this article! It is the little changes that make the biggest changes. Thanks a lot for sharing!

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>