I've been posting about the cost of SarOx pretty much since I began Going Private, but with some renewed vigor these past two weeks as the debate over "the real reason" for the flight of IPO business from United States capital markets began (somewhere out there I suspect like-minded people are busy at work tracking down "the real killers" of Nicole Brown Simpson) and the imminent death of private equity as we know it becomes the theme of the week month for financial "reporters."
Regular Going Private readers will, therefore, understand my interest in some of the recent developments in the study of SarOx costs.
Corporate Tool started the trend with some personal observations about my SarOx cost calculations. Following that, I ran into a piece on the very timely titled Conglomerate Blog pointing, in turn, to a Financial Times article which then cites a study by the law firm Foley & Lardner (subscription required) the findings of which "...confound predictions that US companies would only face a one-off increase in audit fees and other costs as a result of the legislation, introduced after the Enron and WorldCom scandals." This suggests my calculations of SarOx costs are even more absurdly low than I suspected (and just as Corporate Tool indicated) as I assumed a trailing off of 404 compliance costs after the first year and this was clearly erroneous. This, in turn, suggests incentives to bail on public capital markets in the United States due to SarOx are even higher than I expected and, following that logic, that certain commentators who should perhaps stick to reporting on how "Street Fashion Blogs Keep Tabs on the World's Most Stylish Pedestrians," instead of mouthpiecing for the London Stock Exchange got it awfully wrong. (Not that there's anything wrong with the London Stock Exchange, mind you).
Conglomerate Blog goes on to cite an excellent paper by Emory Law Professor Bill Carney that I now re-cite both because of its excellent content, and because I enjoy harboring the fantasy that the paper's title ("The Costs of Being Public After Sarbanes-Oxley: The Irony of 'Going Private'") is a thinly-veiled fan-reference to my writings here.
