More U.S. Companies Drop Out, Clam Up

[Sinistrous]

Reuters link here.

A classic example of the Law of Unintended Consequences:

More U.S. Companies Drop Out, Clam Up
Sun Mar 6, 2005 07:46 AM ET

By Joseph A. Giannone and Brendan Intindola

NEW YORK (Reuters) - In an era of greater scrutiny, a number of U.S. companies are deciding being public just isn't worth the hassle anymore.

After the collapse of Enron Corp, WorldCom Inc. and others, regulators and lawmakers raised financial reporting and corporate governance standards for publicly traded companies to increase accountability and transparency.

In the latest and final phase of the reforms, known as Section 404, companies must assess internal financial controls and report findings to the Securities and Exchange Commission.

Confronted with rising costs to comply, and tougher penalties if they don't, a growing number of companies are dropping out of the public arena.

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[Robert Oak]

1. give me a break

1. this is *the* most favorable "publically traded" corporate political environment in history.

2. is private that bad? To me, the more sane companies are the private ones...no pressure to increase short term profits for "share holders".

[Sinistrous]

2. And your reply relates to the issue of increased transparency how?

.

[sendero]

3. There is no need..

... for a private company to be transparent as a public one must be.

I agree with him. Private companies are more sane, they do not spend half their time trying to fool shareholders.

[Sinistrous]

4. The point being that many of the companies that engaged in

creative accounting are now going "private" so that they can practice their chicanery without the hinderance of oversight by law enforcement. The public is still being cheated. We just have no way of proving it with a "private" corporation. Unintended consequence.

[sendero]

5. You don't seem to understand..

... that if they are "private", only the insiders are involved there are no shareholders to protect.

Any fraud they commit not related to securities fraud is still subject to prosecution or civil suit by the insiders themselves, but there is no "public" interest.

There is nothing wrong whatsover with going private. If they do not wish to play by the securities rules we have, they cannot raise monies from the public markets. Fair enough.

[Sinistrous]

6. Customers. Tax payments.

This is a license to screw the public one way or another.

[Massacure]

7. "one way or another"

Well I suggest you figure out before you try to convince everyone it is a bad thing.