Published: September 20, 2006 09:53 am      

Sarbanes helped restore faith in financial markets

Thank you Sen. Paul Sarbanes. Thank you for many years of public service to the citizens of Maryland and the United States.

Being a conservative, fiscally and socially, I would nowise vote to replace Paul Sarbanes with a new liberal U.S. Senator. Now is no time for the overly liberal social policies of a new Democratic senator. But amongst all the meaningful accomplishments reflecting the career of Sen.. Sarbanes, I would like to commend his leadership in the Sarbanes-Oxley Act of 2002.

As a financial services industry professional, I could see how some companies were abusing the industry at the expense of general public customers. It was clear to me that public customers who invest in supposedly regulated U.S. capital markets were becoming more and more disillusioned with the increasing stench and smell of highly organized financial trickery like insider trading, front running, questionable accounting, and stock options as unrecognized compensation, lacking proper public disclosure of high-level executive salaries, etc. The stinky practices were floating out of the executive offices into just about every level of the financial industry. It was a huge dilemma involving accounting scandals comparable to 1929.

The Sarbanes-Oxley Act has borne much criticism from those it is designed to regulate, with the main gripe being the cost of compliance in keeping the required records. But we proponents of law counter that cost of the law should be taken with a grain of salt. The markets of 2002 needed something dramatic and real to help reestablish one simple thing, and that was faith in the marketplace. I say greater confidence has materialized, and therefore my commendation to our retiring Maryland U.S. Senator.

Now, if gains from improved business operations were combined with a lower cost of compliance, the overall benefit of "SarbOx" may be even more significant. Surely there will be those who push for a scaled-down version of SarbOx, but again thank you retiring U.S. Sen. Paul Sarbanes for putting the focus back on the standard of integrity in our financial markets. Best wishes for a long and fulfilling retirement.