Dodd-Frank Part V: Sarbanes Relief at Last
By David Feldman at 21 July, 2010, 10:48 am
As I write this taking a break from the M&A conference I’m speaking at in Chicago, Pres. Obama is speaking before signing the historic Dodd-Frank bill. By the way, I’ve changed my mind and no longer want to call it “Dank.” I thought it was a cute combination of Dodd and Frank, but I thought about the word dank, which means “unpleasantly moist or humid; damp and, often, chilly.” I will soon be summarizing my overall thoughts on the bill, which I do consider an overreaction to an admittedly serious issue. But I don’t think it’s so bad as to be considered unpleasantly moist or humid! So let’s think of something new to call it. Frodd doesn’t work, it sounds like a character from “The Godfather” or some marsh-dwelling creature. The acronym for the Wall Street Reform and Consumer Protection Act would be WSRACPA (“wiz-rack-pa?”). Aren’t you glad people like me are worrying about things like this?
Seriously, small public companies indeed can rejoice in the last minute addition of relief for “non-accelerated filers” from Sarbanes-Oxley Section 404(b), which requires outside auditors to attest to the adequacy and sufficiency of internal financial controls. These filers are now (once the President signs it – I just looked and he’s still speaking!) permanently exempt from the provisions of 404(b), as I have reported here. In addition, the act directs the SEC to study whether it would be good to broaden this permanent exemption to companies with market capitlizations between $75 and $250 million. This may well be the best news for smaller reporting companies since Sarbanes was passed back in 2002.
Only two more pieces to this series coming- first on the executive compensation changes, then summarizing it all. Then back to regular stuff!
I thought you almost had the perfect name with “Dank.” But I would go with “Donk,” (the “Do” from Dodd and the “nk” from Frank) — as in the sound of smacking bankers in the noggin.
Frodd wouldn’t work at all. Might work if we only referred to it in print, but once the radio-TV guys got to talking about it, the audience would be confused by how “Frodd failed to prevent fraud.”