November 21, 2006
Secretary Paulson, Your Pedigree is Showing!
Mr. Paulson weeps for the cause of American Capitalism (well maybe for Wall Street Investment Bankers). This is where the venerable US Treasury Secretary Paulson is a former Goldman-Sachs Chairman.
He cries in yesterday's speech at how his buddies on Wall Street are practically impoverished these days with IPO's declining. But the facts show something different.
The IPO record for this year is close to the record of 2000 (the year is not over yet) but the fess are at an all time record. But yet Sarbanes-Oxley has really hurt his pals on Wall Street. It needs to be revised so that the children of Wall Street Bankers have shoes to wear.
Meanwhile, bonuses on Wall Street are at all time highs.
"Despite the blast of $50 billion in mergers announced Monday, the value of U.S. deals still hasn't topped the record in 2000. But don't feel bad for the Wall Street firms arranging the marriages: Their pay has already hit a record. So far this year, investment banks have earned $14.8 billion in fees for helping along the year's deals, says Thomson Financial. That tops the previous record of $14.6 billion in 2000 amid the frenzied AOL-Time Warner (TWX) era.
With five weeks left in 2006, the value of U.S. deals could still hit a record, especially if there are more days like Monday: Private equity firm Blackstone offered $20 billion for office owner Equity Office; Freeport-McMoRan offered $25.9 billion for rival metals producer Phelps Dodge; Bank of America offered $3.3 billion for Charles Schwab's U.S. Trust unit; and Russia's Evraz offered $2.3 billion for Oregon Steel Mills."
Isn't time for a little honesty on this topic, Secretary Paulson:
1. Yes the "Big Four" Accounting firms have been overzealous in their approach to SOX 404. This should be changed. They have been too busy collecting high fees.
2. But the US markets were severely compromised after the Enron scandal. Now that faith has been restored, Wall Street and many public company CEO's seem to want to break that trust. Where there is no trust, there is not market. No trading and no fees.
3. The real problem is that the US process for bringing a company public is onerous and expensive because too many lawyers, bankers and accountants have their "hands in the pockets" of their clients.
4. SOX 404 needs a new audit standard. SEC Chairman Cox is working feverishly on this with the PCAOB. Let them do their work. Cox knows Wall Street too. Let him do his work.
5. If Wall Street were really interested in US capital markets, they would trim their fees to get more business. But that is out of the question. This is all someone's else's fault.
6. AIM and Hong Kong Markets are cheaper to list stocks on. So companies will go there. Standards are lower. Companies will list there. There will be a scandal there just as there was on the much raved about Dubai Stock Exchange which lost all credibility when it was tainted by insider trading scandals.
7. In the end, other countries have become smarter and more competitive. Isn't this capitalism at work!
8. The largest IPO this year, was Chinese state owned. Is it realistic to think the Chinese are going to list on US markets and be subjected to our transparency? Look at their record on human rights and you will have your answer.
Come on Secretary Paulson:
1. Do your job! Be honest about what is really causing US markets to slip - the high costs all around. SOX costs are not the whole picture.
2. Cox and company are doing their job. Give them a break and quit posing for the cameras.
3. Above all, please do not so blatantly lobby for your old pals. It is unseemly.
4. Give it a rest. The work being done is the right work. You cannot shut Pandora's Box now. Once you give investors transparency and they prove they like it, you risk a total collapse of trust in US markets.
5. Grow up and get Global! The rest of the world has caught up to the US.
Time to innovate. That is our spirit and our secret to success.
If your company is listed on US or Canadian exchanges and needs to comply with the requirements of Sarbanes-Oxley Section 404 and/or MI 52-109 cost effectively, see http://www.issuescentral.com/ to learn more about Compliance Playbook®. For companies headquartered in Canada and listed on Canadian or US exchanges, go the website of our exclusive Canadian distributor, Thomson Carswell, http://www.compliancepartner.ca/ to learn more about Compliance Partner(tm).
He cries in yesterday's speech at how his buddies on Wall Street are practically impoverished these days with IPO's declining. But the facts show something different.
The IPO record for this year is close to the record of 2000 (the year is not over yet) but the fess are at an all time record. But yet Sarbanes-Oxley has really hurt his pals on Wall Street. It needs to be revised so that the children of Wall Street Bankers have shoes to wear.
Meanwhile, bonuses on Wall Street are at all time highs.
"Despite the blast of $50 billion in mergers announced Monday, the value of U.S. deals still hasn't topped the record in 2000. But don't feel bad for the Wall Street firms arranging the marriages: Their pay has already hit a record. So far this year, investment banks have earned $14.8 billion in fees for helping along the year's deals, says Thomson Financial. That tops the previous record of $14.6 billion in 2000 amid the frenzied AOL-Time Warner (TWX) era.
With five weeks left in 2006, the value of U.S. deals could still hit a record, especially if there are more days like Monday: Private equity firm Blackstone offered $20 billion for office owner Equity Office; Freeport-McMoRan offered $25.9 billion for rival metals producer Phelps Dodge; Bank of America offered $3.3 billion for Charles Schwab's U.S. Trust unit; and Russia's Evraz offered $2.3 billion for Oregon Steel Mills."
Isn't time for a little honesty on this topic, Secretary Paulson:
1. Yes the "Big Four" Accounting firms have been overzealous in their approach to SOX 404. This should be changed. They have been too busy collecting high fees.
2. But the US markets were severely compromised after the Enron scandal. Now that faith has been restored, Wall Street and many public company CEO's seem to want to break that trust. Where there is no trust, there is not market. No trading and no fees.
3. The real problem is that the US process for bringing a company public is onerous and expensive because too many lawyers, bankers and accountants have their "hands in the pockets" of their clients.
4. SOX 404 needs a new audit standard. SEC Chairman Cox is working feverishly on this with the PCAOB. Let them do their work. Cox knows Wall Street too. Let him do his work.
5. If Wall Street were really interested in US capital markets, they would trim their fees to get more business. But that is out of the question. This is all someone's else's fault.
6. AIM and Hong Kong Markets are cheaper to list stocks on. So companies will go there. Standards are lower. Companies will list there. There will be a scandal there just as there was on the much raved about Dubai Stock Exchange which lost all credibility when it was tainted by insider trading scandals.
7. In the end, other countries have become smarter and more competitive. Isn't this capitalism at work!
8. The largest IPO this year, was Chinese state owned. Is it realistic to think the Chinese are going to list on US markets and be subjected to our transparency? Look at their record on human rights and you will have your answer.
Come on Secretary Paulson:
1. Do your job! Be honest about what is really causing US markets to slip - the high costs all around. SOX costs are not the whole picture.
2. Cox and company are doing their job. Give them a break and quit posing for the cameras.
3. Above all, please do not so blatantly lobby for your old pals. It is unseemly.
4. Give it a rest. The work being done is the right work. You cannot shut Pandora's Box now. Once you give investors transparency and they prove they like it, you risk a total collapse of trust in US markets.
5. Grow up and get Global! The rest of the world has caught up to the US.
Time to innovate. That is our spirit and our secret to success.
If your company is listed on US or Canadian exchanges and needs to comply with the requirements of Sarbanes-Oxley Section 404 and/or MI 52-109 cost effectively, see http://www.issuescentral.com/ to learn more about Compliance Playbook®. For companies headquartered in Canada and listed on Canadian or US exchanges, go the website of our exclusive Canadian distributor, Thomson Carswell, http://www.compliancepartner.ca/ to learn more about Compliance Partner(tm).
