AND the fact that the company clown who sold shares into the market has no doubt been enjoying that cash and will continue to do so while I and many others have been chatting with Ameritrade about why we are being jerked around! I can live with the loss in terms of money if in fact it goes that way but the SEC/NASD will be hearing from me on a regular basis asking them how their buddies from GVRP are doing.....and I will also make it a point to offer all of this info to Senator Mary Landrieu in person. Perhaps she'll drop this in to her conversation with nominee Cox...then again perhaps Mr. Cox already knows some of these players......
It is the Cox nomination, however, that signals the return to pliant directors, misleading financial statements, disenfranchised shareholders and runaway executive salaries. Cox's philosophy of corporate governance is that investors who don't like how a company is run should simply sell their shares and put their money somewhere else. Look for Cox to make it easier and cheaper for companies to issue new shares of stock, even when they have no business doing so, while soft-peddling enforcement against big brokerage and insurance firms that merely aid and abet corporate fraud but don't actually do it themselves.
The proposed new chairman of the SEC is a leading proponent of the idea that accounting rules are simply too important to be left to the professionals but ought to be subject to the discipline of the political marketplace.
A decade ago, when the Financial Accounting Standards Board was first considering requiring companies to treat grants of employee stock options as an operating expense, our man Cox helped lead the congressional effort to block FASB's initiative.
Around the same time, FASB was preparing to shut down an accounting gimmick popular with high-tech firms that used stock rather than cash to buy other firms. Experts had long complained that the "pooling of interests" accounting hid the true costs of mergers and acquisitions. But threats by Cox and other members of Congress to pass legislation blocking the change forced FASB to weaken the new rule and delay it until the stock market bubble had already burst.
Cox was also part of the congressional cabal that thwarted SEC chairman Arthur Levitt when he tried to push through a rule preventing accounting firms from doing lucrative consulting work for companies whose books they audited. After the story of the Andersen-Enron debacle came out, several members of the cabal stepped forward to acknowledge they were wrong about that one. But Cox, who relied heavily on political contributions from the accounting industry, was not among them.
Cox was also the author of legislation that would have made it virtually impossible for shareholders to bring suit against companies that misled or deceived them. With the increase in frivolous lawsuits brought by unscrupulous lawyers, some sort of reform was clearly warranted. But Cox's proposal would have shielded executives and directors who fed happy talk to investors and analysts without checking to see whether it was true. Happily, the Cox "hear-no-evil, see-no-evil" defense was largely written out of the final bill.
Cox has repeatedly demonstrated a preference for sacrificing investor protection to the larger cause of promoting economic growth. He is more ideologue than pragmatist, and an unabashed partisan to boot. Those hardly seem like the necessary qualifications to succeed Bill Donaldson, a champion of the investor, a paragon of independence and a general all-around pro.
Steven Pearlstein can be reached atpearlsteins@washpost.com.
Thinking about possible losses, wait til the Dempsey Morks, Zaparas, gary morgans, roland breetons, and numerous others of their ilk get wind of this and figure it out.
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