A Social Defense of Sarbanes-Oxley

19 Pages Posted: 14 Jul 2008

See all articles by James A. Fanto

James A. Fanto

Brooklyn Law School and Co-Director of the Center for the Study of Business Law & Regulation

Abstract

In this essay, I argue that the scandals leading to Sarbanes-Oxley and the resulting rapid and powerful backlash against it arose because of the prevalence of the self-interest ideology in business, finance, and indeed, U.S. society, which views individuals solely as profit-maximizers. Sarbanes-Oxley is fundamentally a reassertion of social values against the socially destructive aspects of the self-interest ideology. I provide several examples of the law's social orientation, which require professionalism in the boards of directors of public companies and in the research analysts in investment banks. I also observe that changing the ideology of executives and financiers will likely require more than the legal reforms offered by Sarbanes-Oxley. Yet, this law's contribution to an alternative, more pro-social perspective and its practical reforms are grounds for its defense.

Keywords: Sarbanes-Oxley, regulation of business

Suggested Citation

Fanto, James A., A Social Defense of Sarbanes-Oxley. New York Law School Law Review, Vol. 52, 2007/2008, Brooklyn Law School, Legal Studies Research Paper No. 111, Available at SSRN: https://ssrn.com/abstract=1158589

James A. Fanto (Contact Author)

Brooklyn Law School and Co-Director of the Center for the Study of Business Law & Regulation ( email )

250 Joralemon Street
Brooklyn, NY 11201
United States
718-780-7566 (Phone)
718-780-0375 (Fax)

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