Sarbanes-Oxley to create litigation nightmare
Just a month after it was passed by the US Congress, the Sarbanes-Oxley Act has already been met with criticism from an important business lobbying group.
The US Chamber of Commerce, one of the few lobbying group in the country, has said the act will create litigation chaos.
In an interview with the Financial Times, the Chamber’s chief economist Martin Regalia said the law had been hastily drafted by a variety of different authors cobbling together a host of last minute amendments.
He added it will have unintended consequences such as increased bureaucracy and rampant litigation, which will in the end do more harm than good.
The Act was introduced following a spate of accounting disasters at high-profile companies like Enron, WorldCom and Adelphia and is aimed at restoring investor faith in corporate America by tightening up corporate governance and financial control.