If members of Congress wanted to create a million jobs, all they would have to do is repeal in its entirety the legislation that is known as Sarbanes Oxley. It is the most destructive legislation that has ever been written, causing hundreds of millions if not billions of dollars in waste and problems. It has virtually destroyed the IPO market for midsize companies and caused thousands of public companies to de-list. I know personally of at least 10 companies that have chosen, because of Sarbanes Oxley, to go public on foreign stock exchanges rather than listing in the U.S.
The problem with the legislation is the massive cost of compliance and the stilted way that companies need to operate in order to comply with it. All this is waste. The law was put in place in response to the accounting and financial fraud that came to light in the early part of the decade at several companies, most notably Enron. What is little understood today is that people at Enron and elsewhere were successfully prosecuted under the then-current security laws were. The rules in place dealt with the problems effectively. Piling on a huge regulatory burden was totally unnecessary.
We live in a global economy and having companies in the U.S. carrying the added burden of high compliance costs and the inefficiency that entails only makes U.S. businesses less competitive. Companies backed by venture capital have created massive numbers of jobs in the U.S. but because the law has made it harder for them to go public (or to stay public), the amount of VC money has dried up. Newly-formed companies have been denied the IPO exit that all investors want, and the math is quite simple: No exit equals no more investment.
If you want to start a company and some day take it public, contact your Congressional representatives and ask them to repeal Sarbanes Oxley. It was and is a horrible burden on everyone.
Last updated: Nov 2, 2009
Veteran entrepreneur NOLAN BUSHNELL is the founder Atari, Chuck E. Cheese, Etak, ByVideo, Axlon, and uWink. Among his accomplishments, Bushnell invented Pong, hired Steve Jobs, and developed a series of robots. He lives in California. @NolanBushnell