Does the Sarbanes-Oxley Act Have a Future?

Yale Law & Economics Research Paper No. 385

159 Pages Posted: 20 May 2009 Last revised: 22 Jun 2009

Roberta Romano

Yale Law School; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI)

Date Written: May 14, 2009

Abstract

Although the enactment of the Sarbanes-Oxley Act (SOX) received nearly unanimous congressional support, only a few years thereafter its wisdom was increasingly questioned and its supporters had to stave off attempts to recraft the legislation. The financial crisis of 2008 has sidelined efforts to alter the legislation’s most costly provision, as Congress’s attention has turned to overhauling the regulatory regime for financial institutions. There is, nonetheless, much to be learned about financial regulation and SOX’s future, from an in-depth examination of the interplay of the government and private commissions created with an eye to revising the legislation, media coverage of those entities, and congressional responses. That interaction provides a map of political fault lines and assists in forecasting the prospects for recrafting SOX’s most costly provision. It also serves as a cautionary tale regarding significant regulation enacted in the midst of a financial market crisis. The ongoing financial crisis has sidelined SOX, but its burdensome costs suggest that it might well, in due course, reemerge on the legislative agenda.

Keywords: Sarbanes-Oxley Act, financial regulation, media, corporate governance

JEL Classification: G38, K22

Suggested Citation

Romano, Roberta, Does the Sarbanes-Oxley Act Have a Future? (May 14, 2009). Yale Law & Economics Research Paper No. 385. Available at SSRN: https://ssrn.com/abstract=1404967 or http://dx.doi.org/10.2139/ssrn.1404967

Roberta Romano (Contact Author)

Yale Law School ( email )

P.O. Box 208215
New Haven, CT 06520-8215
United States
203-432-4965 (Phone)
203-432-4871 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

European Corporate Governance Institute (ECGI)

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

HOME PAGE: http://www.ecgi.org

Paper statistics

Downloads
824
Rank
22,638
Abstract Views
4,252