FOR IMMEDIATE RELEASE
Thursday, May 9, 2019
Contact: Press at press@bettermarkets.com
Washington, D.C. – Dennis Kelleher, President and Chief Executive Officer of Better Markets, issued the following statement regarding the Securities and Exchange Commission’s (SEC) proposed rollback of Sarbanes Oxley’s 404(b)’s requirement that auditors attest to the adequacy of certain companies’ internal controls:
“Nothing focuses a corporate executive’s attention like having to personally certify something because such certifications create personal liability as well as significant reputation risk for that executive. That’s why today’s action by the SEC is so important and pernicious. The SEC is proposing to eliminate an executive certification rule that applies to hundreds of so-called ‘smaller reporting companies’ that have millions of shareholders. These rules promote executive accountability and protect investors against fraud and deceit by corporate insiders.
“Company executives currently are required to certify annually that their companies have adequate financial controls, and these certifications are independently attested to by outside auditors. This rule was designed to prevent executives from evading responsibility and accountability by claiming they relied on others or did not know the companies’ key financial controls were weak and inadequate.
“These rules were enacted by Congress in response to the massive frauds at Enron and WorldCom, which cost investors tens of billions of dollars. The rules are meant to hold executives accountable when their companies ‘cook their books’ and engage in financial fraud. For that reason alone, the proposal is unwise and should be rejected. However, there are many additional reasons why this proposal is baseless and against the public interest as Commissioner Rob Jackson detailed in his dissent today, with which we agree.”
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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies – including many in finance – to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.com.
