No Crony Left Behind
The Bush Administration continues its efforts in the all-important No Big Money Crony Left Behind program:
The Securities and Exchange Commission has begun to take steps on two fronts to protect corporations, executives and accounting firms from investor lawsuits that accuse them of fraud.
Last Friday, the commission filed a little-noticed brief in the Supreme Court urging the adoption of a legal standard that would make it harder for shareholders to prevail in fraud lawsuits against publicly traded companies and their executives….
Critics said that the moves signaled a major retrenchment from the post-Enron changes and showed that a lobbying push by big companies, Wall Street firms and the accounting industry was gaining traction as they seek to roll back what they see as onerous regulation and excessive investor litigation.
But Christopher Cox, the chairman of the commission, said in an interview Monday that both efforts were in the best interests of investors because they aimed at preventing the accounting industry from further consolidation and at limiting what he called “fraudulent lawsuits,” including some he said were filed by “professional plaintiffs.”
Institutional investors and some analysts expressed alarm at the developments, noting that the number of shareholder lawsuits was declining significantly. “It is clear from these actions that this is a commission intent on reversing seven decades of rule making, by Democrats and Republicans, that have protected investors and opposed shielding auditors,” said Lynn E. Turner, a former chief accountant at the commission and the managing director of research at Glass Lewis, an adviser to large shareholders. “This administration and this agency are very pro-business and anti-investor.”
Yes, because the currently declining number of lawsuits indicates….what? That the regulatory environment might actually be working as a deterrent to fraudulent activity by the very executives who were bilking investors in the past without such stepped-up measures. You know, that this type of regulatory environment has actually been successful at putting a stop to inappropriate, criminal and fraudulent behavior by executives who might otherwise let their personal greed get the best of them.
Never let it be said that the Bush Administration could leave well enough alone. If something is actually working as it is supposed to work, it's clear that it has to be tweaked into failure. Heckuva job.