Judging a legacy at the SEC

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By now, you've surely seen the news that William Donaldson, one of the most influential chairmen ever of the Securities and Exchange Commission, has announced his retirement. Donaldson led the commission during the corporate scandal era, and is credited by many for adopting an aggressive reform agenda. He was a tough cop in an environment where discipline was lacking.

Still, I wonder how he is viewed by Inc. readers. On the one hand, his staff did rein in reckless and wayward corporations in a number of fields, which appeals to my sense of fairness and justice. On the other hand, the SEC's robust enforcement of Sarbanes-Oxley has served as a check on the ambitions of many entrepreneurial companies just as surely as it has curtailed the shenanigans of corporate giants. In fact, it may disproportionately hurt growth companies, as up-and-coming firms may have a hard time complying with the new laws (and affording complaince, which is a different matter altogether.) Moreover, growth companies may blame the shadow of Sarbanes-Oxley (and thus the SEC) for the limp IPO market, which has limited their financing options and growth prospects at least to some degree.

What do you think? Is Donaldson's legacy a positive one? Or has the SEC gone to far, bedeviling many honest companies in order to catch the dishonest few? And, if that is the case, does Donaldson bare some responsibility for that? Or do you blame the Congress and the president for enacting draconian, anti-growth laws?

Last updated: Jun 1, 2005




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