Arthur Levitt on Sarbanes

I'm all for investor protection, but I don't know if S-O is it. And I know a hot of companies that do crazy paperwork for no real reason (you can still get the fraud in if you want).

Having Audit report to the Head of Risk Committee(board of directors). Makes a Great deal of sense to me. Cost of compliance with SOX keeps dropping from what Levitt says.

By Gregory Mott and Ken Prewitt
Nov. 4 (Bloomberg) -- Former U.S. Securities and Exchange
Commission Chairman Arthur Levitt said Wall Street lobbying is
undermining efforts to overhaul financial-industry oversight
after the worst economic crisis since the Great Depression.
Companies working to influence lawmakers, including House
Financial Services Committee Chairman Barney Frank and Senate
Banking Committee Chairman Christopher Dodd, will gain a
“watered-down” consumer-protection agency among other changes,
Levitt said today in a Bloomberg Radio interview.
“We’re not getting the best re-regulation,” Levitt said.
Levitt, an adviser to Goldman Sachs Group Inc. and the
Carlyle Group, is a board member of Bloomberg LP, parent of
Bloomberg News.

http://www.huffingtonpost.com/2009/11/05/civil-war-in-corporate-am_n_347704.html

Astonishingly, at a time when the public is crying out for greater regulation to limit excessive risk-taking by financial institutions, the banks are trying to get Congress to agree that the next time there's a big downturn, they should have the ability to alter their accounting standards -- essentially, fudge the numbers -- so that the public and investors won't be able to tell how insolvent they really are. By ignoring their declining asset values, they can avoid the standard requirement of raising more capital.

The mechanism is contained in an amendment set to be introduced in mid-November by Rep. Ed Perlmutter (D-Colo.) that would move final authority over the Financial Accounting Standards Board (FASB) from the Securities and Exchange Commission to a new body, a so-called "oversight" board, that would include the officials charged with managing systemic risks to the financial markets.

http://www.latimes.com/business/la-fi-bank-failure7-2009nov07,0,2745693.story

United Commercial was burned by commercial lending losses, especially loans to developers and home builders during the housing boom. But it also was tainted by a financial scandal that resulted in a shake-up of its top management.

UCBH announced in September that its financial reports could not be trusted because of the "deliberate and improper actions and omissions of certain bank officers," who had understated losses in "an apparent desire to downplay deteriorating financial conditions."

The company's longtime chief executive, Thomas S. Wu, resigned in September, along with its chief operating officer.

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