U.S. PIRG Consumer Blog: Investors: Watch it, Wall Street wants to eliminate protections

Despite a series of post-Enron scandals, and despite that Enron was only five years ago, the accountants and Wall Street are cheering the retirement of investor champion Paul Sarbanes (D-MD), the U.S. Senator who led passage of the bi-partisan 2002 Sarbanes-Oxley Act to crack down on the culture of corporate crime and lax corporate governance that had lessened investor confidence and led to the loss of billions of dollars in retirement investments for millions of average Americans. According to Steve LaBaton and Floyd Norris in Panel to Urge Rewriting Rules to Aid Companies in today's New York Times, a group of academics aligned with Wall Street will release a report today describing the ways that our corporate crime laws must be weakened further to keep Wall Street happy: Excerpt:

It recommends making it harder for companies to be indicted by the government or sued by private lawyers, and urges policies to keep the Securities and Exchange Commission from adopting rules that impose high costs on business.

The corporate chiefs and academics behind this effort, disappointingly endorsed by Bush Administration Treasury Secretary Henry Paulson, acting more like a cheerleader than a regulator, seem to have forgotten that SOX merely restored some balance to investor protection laws that had already been chopped way back throughout the 1990s. We'll be reminding the Congress of this and hoping that House Financial Services Chairman Barney Frank (D-MA), Senate Banking Chairman Chris Dodd (D-CT), and SEC Chairman Chris Cox, another report target for rollbacks, maintain a healthy dose of skepticism, and a long enough memory to remember Enron, Worldcom, etc.