Categories:United States

Wall St crisis? Blame SarBox

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  • Extremely Insightful Look At Wall Street Crisis

    Superb article, an extremely insightful look into the crisis plaguing Wall Street. Mr. Maalouf is exactly right, without the IPO revenue, which the investment banks were deprived of by Sarbox, Wall Street could not afford the losses from the risky investments in the subprime mortgage sector.

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  • excellent article

    Sarbox is the greatest single threat to the U.S. financial services industry, what we need is to repeal this poorly thought out piece of legislation which only hinders the finance sector from acting efficiently, excellent article.

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  • NFA does it again now for Forex

    We haven't learned our lesson. This week the NFA and congress regulators fired anther dart into a much less known industry but as damaging will be the result. Brokers aka FDM's in foreign exchange "FX" until a year ago could participate as market makers with as little as 1mm. Now the industry has decided in the name of regulation and for the good of the people it should be 20mm. I have been in the industry now for 10 years and know many many brokers that will simply leave the country looking for a more capitalist society. If you don't think this matters you should know that the industry is about 60 billion a day in trade volume. All going off shore now!

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  • What?

    Sarbox did about as much to "cause" this crash as weak breaks would in a car driven by a drunk.

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  • The regulators never learn

    Exactly right, the regulators never learn. They keep over regulating the market and fail to see the negative ramificartions of their actions.

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  • Really!!!

    It is a sad fact that business does not like being monitored but really needs it. SOX benefitted those businesses who complied because it exposed areas where controls were deficient.

    The IPO's that failed to materialise obviously did not want these deficiencies exposed. Also, it is not only the American banks that are suffering now. Where are the foreign bank profit cusions they got from the IPO's America missed out on?

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  • Sarbox is responsible for the decline in the IPO market

    Sarbox is one of the greatest contributors for the decline in the US-IPO market. The section 404 of Sarbox is the most contentious aspect of the legislation requiring management and the external auditor to report on the adequacy of the company’s internal control over financial reporting (ICFR).

    It is also the costliest aspect of the legislation for companies to implement. It involves the documenting and testing of the important financial controls both manual as well as automated, which in turn requires enormous resources of the company in terms of infrastructure and manpower allocation.

    It requires an upgrade to the corporate IT infrastructure to comply with all the reporting requirements as required by Sarbox. Implementing SOX section 404 could potentially cost a mid-sized company approximately 5% of total sales revenue in the first year and approximately 2.5% of total sales revenue every year thereafter.

    No wonder the accounting firms love SOX as it contributes to a fat portion of their total revenues for consulting on implementing and reporting requirements for Sarbox.

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  • Brilliant Article

    Brilliant article, Mr. Maalouf has hit the nail exactly on the head. The U.S. has regulated itself out of the investment banking industry, Wall Street as we know it is gone and now the country is suffering. Mr. Obama perhaps you should consider nominating Mr. Maalouf as your new Secretary of Commerce, he seems to be one of the few people who understand the cause of the current crisis and therefore how to solve it.

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