Interesting story about Sabanes Oxley

One of the reasons I got out of public accounting was the horrible law passed by Congress after the Enron debacle and other financial collapses in the late 90's/early 00's. This post on Dealbook I thought was pretty interesting regarding the decision of one company to delist its shares in order to attempt to avoid compliance with the law. It was by the company's estimate an attempt to save $750K in costs a year to comply with the law. However, some investors protested and the price of the stock dropped sharply.

To me, this shows two sides of this legislation. One, that the high cost to comply with these laws can be a big motivation to go private. Second, investors do like the transparency of financial reporting that comes with the law as evidenced by the drop in the stock price right away following the decision to delist. Somehow there has to be a happy medium to benefit both the needs of shareholders to know about their investment and the desire of management to reduce cost for the ultimate benefit of those shareholdings. I think this is an interesting paradox that as financial regulations become more complicated, at what cost is it worth to continue to comply?

I think the original authors of the legislation probably did not envision the results of the law for the long term, rather as politicians typically do, they just looked at the immediate benefits in the witch hunt following Enron. I definitely think this law should be reworked as to be more efficient in its application.