Yes, they're dirtbags, and they took actions to mislead shareholders. But I have a bigger gripe with these two. Their actions gave politicians a veritable pinata to beat on (they could hit it from any number of directions and have something good come out) when pushing through regulations like Sarbanes-Oxley.
Far-reaching legislation like SOX has provided a lot of fodder for academics looking for research topics (in fact, I've done some). But it's also drastically changed the American capital markets, and I doubt for the better. The negative effects of SOX aren't limited to the drastically higher compliance costs they've foisted on public companies (particularly for smaller firms, when measured on a percentage basis). They also include the less obvious but still economically significant costs to our economy of decreased likelihood of entrepreneurs deciding to to go public (and the related trend of more public companies deciding to go private), increased incidence of foreign companies deciding not to list their stock on American stock exchanges (or delisting if they're already there), greater difficulties in attracting qualified board candidates because of increased time and liability costs, and overall greater conservativism as executives focus excessively on compliance rather than shareholder wealth creation.
If you want a flavor of what some of the more well-known commenters in the blogosphere have to say, here's a quick tour (to be updated as new posts of note occur):
- Professor Bainbridge, with thorough commentary and a nice link s as usual
- The WSJ Law Blog with some other links to video footage
- A diarist at Daily Kos wh0 (not surprisingly given the source) lays it all at the Bush's feet
- Larry Ribstein, who raises an interesting question about the insider trading verdict
- Professor Bainbridge again with an extended answer to Ribstein's question on insider trading.
- Barry Ritholtz, who has an Enron trivia question
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