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02mydafsoup-01
Robert Reich: Don't Wait for Reform
There's already a law on the books that holds Wall Street CEOs and executives to account -- now it needs to be enforced.


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Banks fear genuine financial reform would cost them a bundle....

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So even as Wall Street sheds crocodile tears about the terrible things it's done, it is throwing money at Capitol Hill to thwart reforms that would prevent it from continuing to do terrible things. The political payoffs seem to be working. Proposed legislation from Treasury and the House (at this writing, the Senate Banking Committee hasn't reported out) has loopholes big enough to allow bankers to drive their Ferraris through them. Specifically, they permit secret derivative trading in foreign-exchange swaps (similar to what Goldman used to help Greece hide its debt) and in transactions between big banks and many of their corporate clients (as with AIG). Before you wallow in hopeless cynicism, though, it's worth noting that we already have a law against this. It's called the Sarbanes Oxley Act of 2002. It just needs to be enforced..."

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(Summarized on http://delong.typepad.com 20100329 | likewise on soup.io )

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Think back to the corporate looting scandals that came to light almost a decade ago when the balance sheets of Enron, WorldCom, and others were shown to be fake, causing their investors to lose their shirts. Nearly every major investment bank played a part in the fraud -- not only advising the companies but also urging investors to buy their stocks when the banks' own analysts privately described them as junk.

Sarbox, as it's come to be known, was designed to stop this. It requires CEOs and other senior executives to take personal responsibility for the accuracy and completeness of their companies' financial reports and to set up internal controls to assure the accuracy and completeness of the reports. If they don't, they're subject to fines and criminal penalties.

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— read the complete article on http://prospect.org | 20103029

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