The Damage Caused by Sarbanes Oxley

Foreign companies are continuing to leave the US as a result of Sarbanes Oxley and its enormous cost of compliance. Can you blame them? Not if you're a capitalist, which evidently, none of our congressmen are. I recently had the pleasure of listening to a very respected financial man, a Democrat, from the US who indicated that SarbOx has not caused companies to leave the US. The data in this article would say otherwise.

At the beginning of this week, 428 non-U.S. companies traded on the NYSE, 9.5 percent fewer than in 2002, according to the exchange's Web site. The exchange's non-U.S. listings have dropped every year since Sarbanes-Oxley was signed in 2002. Twenty-three foreign companies have dropped listings so far this year, the fastest pace since 2002, according to the NYSE's site.

Our congress knows that SarbOx is hurting the US economy. Sarbanes and Oxley themselves have admitted that it's done more harm than good. So why do these regulations stick around? Just look at FDR's legacy. People get used to the pork (in this case accountancy companies) and they come to depend upon it.