That the SEC, established to safeguard investors and insure an honest market, would file a brief in the Supreme Court urging a narrow and restricted interpretation of the nation's securities laws is highly troubling. That this is not part of a well-orchestrated industry campaign to roll back post-Enron safeguards is laughable. Thus, corporate counsel Roma Theus says that cases like Enron and World Com "were watersheds" and "we're not turning back." He is half right. But if his clients get their way, we are not only turning back, we are reversing course entirely.
Enron and World Com were two of the worst examples of a pattern of fraud in the late '90's that also included such cases as HealthSouth, Global Crossing, QWEST and AOL Time Warner.
Billions were lost including the retirement income of countless Americans.
In response, Congress enacted the Sarbanes Oxley Act imposing relatively modest controls on Wall Street. Corporate executives were required to certify in writing the honesty of their financial reports to shareholders; the statute of limitations on fraud was extended; and criminal penalties were toughened. That law is now under siege by Wall Street - with the active encouragement of the Bush Administration.
Recently, for example, a business financed "Interim Report of the Committee on Capital Regulation, " released with the blessing of Treasury Secretary Paulson , made 32 recommendations to undo most of Sarbanes Oxley . With no trace of irony, they included making the SEC more "business friendly."
Notwithstanding record profits and bonuses being paid on Wall Street (New York City Ferrari
dealers recently ran out of cars), the rationale is that , because of these reforms, US markets are no longer competitive with their foreign counterparts.
While a Democratically controlled Congress is less likely to do the bidding of corporate interests, the power of money is bipartisan. Unless the American public is vigilant, the next Enron is just around the corner.