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I am also the Chairman of the Board's Investor Advisory Group and Chairman of the Investor Working Group of the International Forum of Independent Audit Regulators.I will direct my remarks from those vantage points.I am honored to be a member of the panel with Kayla Gillan, my predecessor at the PCAOB, as well as Stephen Brown from TIAA-CREF; Matthew Cedergren from the Stern School; Charles Elson, Director of the John L.Weinberg Center of Corporate Governance at the University of Delaware; Adam Emmerich from Wachtell, Lipton, Rosen & Katz; Robert Herz, former Chairman of the Financial Accounting Standards Board; and Paul Washington of Time Warner.At the outset, I must state that the views I express are my own and do not necessarily reflect the views of the Board, any other Board member, or the staff of the PCAOB.I am regularly asked about the effectiveness of the Sarbanes-Oxley Act and for my response to those who argue that it should be repealed.You probably won't be surprised that I believe the Act has been very effective and should not be repealed. The Sarbanes-Oxley Act was not just a response to Enron despite the failures its collapse exposed.
Former House Financial Services Committee Chairman, Michael Oxley recently described the effects of those business failures saying, "It was a severe shock to our system, to the core of the capital system that depends on honesty and integrity and on having investors believing in the companies they invest in." He added, "That was really the shock to me, as a pro-business Republican, who was looking at what I thought was the disintegration of the capital market." Chairman Oxley was not exaggerating.
In July 2002 alone, the Dow dropped over 15 percent.
Thank you for inviting me to participate in the "Ross Roundtable on The Sarbanes-Oxley Act of 2002: Ten Years Later." You asked us to discuss briefly the success or failure of the Sarbanes-Oxley Act from the point of view of our various constituencies.
I do not think of myself as representing any particular constituency.
I was, however, the Staff Director and Chief Counsel of the Senate Banking Committee under Chairman Paul Sarbanes and was intimately involved in the crafting of the Sarbanes-Oxley Act.