Twenty, count’ em, law school professors have written a letter to SEC Chairman Cox in which they contend that the commission has no legal authority to exempt small companies from the Section 404 requirements of Sarbox.
According to the copy of the letter that former chief accountant Lynn Turner passed along (sorry, no link), they argue that in contrast to other provisions of the law, Section 404 was not enacted in the form of an amendment to the 1933 or 1934 securities acts. And that, say the profs, reflects Congress’s intent to set the provisions in legal stone, providing the SEC with no leeway as to whom to apply the rules.
My two cents: If the professors’ views carry any weight, those in favor of 404 rollback for small companies will have to do more than lobby Cox.
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