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To: Barry Grossman who wrote (168435)	7/18/2002 1:02:56 AM
From: wanna_bmw	Read Replies (1) \| Respond to of 186894

Barry, amazing article! Andy Grove states an obvious problem, but one that many have chosen to ignore. His insight precedes his reputation. I whole-heartedly agree with his recommendations, and hope that the U.S. is bold enough to reform what needs to be reformed, and address the real problems at hand. wbmw

To: Barry Grossman who wrote (168435)	7/18/2002 6:24:00 AM
From: Amy J	Read Replies (1) \| Respond to of 186894

Hi Barry, great article. RE: " open season on corporate executives...This just at a time when their combined energy and concentration are what's needed to reinvigorate our economy." As an Intel investor, very much appreciate the hard work of every executive and employee at Intel, a ethical, humble and hardworking bunch. RE: " Corporate misdeeds...are a result of a systemic problem, and a systemic problem requires a systemic solution.... ...separation of powers ...auditors should provide only one service: auditing ...financial analysts should be independent of the investment banks that do business with corporations." Great article. Regards, Amy J

To: Barry Grossman who wrote (168435)	7/18/2002 12:18:23 PM
From: Road Walker	Respond to of 186894

What's Worse, Fraud Or The Feds? Vahan Janjigian, 07.18.02, 8:00 AM ET NEW YORK - The Dow Jones Industrial Average has fallen almost 2,000 points in a very short period of time. TheS&P 500 is down about 200 points. Volatility has been extremely high, as evidenced by exaggerated intra-day price swings. Why are stock prices so weak when economic data look quite promising? Given recent accounting scandals, the obvious answer is malfeasance on the part of corporate executives. Its seems that each day brings with it news of another accounting scandal. Problems range from expenses being incorrectly booked as investments to revenues being inappropriately accelerated. Insider trading has also become a major concern as corporate executives are accused of dumping shares just before announcing bad news. There is no doubt that fraudulent behavior on the part of some executives has shaken investor confidence. But is fraud so widespread as to justify the significant plunge in all major indices? We don't think so. We believe investors are also worried about excessive regulation. The recent scandals guarantee that more government regulation is forthcoming. The proposals made so far seem reasonable and practical. But due to political pressures, even President George W. Bush will be tough on business; perhaps more so than a Democratic president would be at this time. And every member of Congress who hopes to be reelected is jumping on the regulatory bandwagon. One new proposal by Harvey Pitt and the Securities and Exchange Commission requires principal executive and financial officers to certify the veracity of information contained in quarterly and annual financial reports. This rule would make it easier to hold top executives accountable when published information is deemed misleading or fraudulent. No doubt, everyone is in favor of improving the accuracy of financial reports. Investors and analysts alike must be able to rely on published accounting results. However, no amount of regulation will make equity investing a risk-free endeavor. Regulation that goes too far can be just as harmful to our markets as no regulation at all. The SEC's new proposal sounds great at first blush. After all, who would oppose sending corporate executives to jail when they knowingly release misleading financial information? Yet we wonder how many executives are willing to expose themselves to even the minimal risk of being prosecuted for honest mistakes. The new SEC standard might even result in a few high profile resignations, and corporations may find it at least a little more difficult to fill vacancies in the executive suite. Excessive regulation could also be the death knell of the IPO market. More businesses may choose to remain private and avoid subjecting themselves to increased scrutiny. Going-private transactions (the reverse of IPOs) could rise in number. If increased regulation is deemed too excessive, we suspect the best investment opportunities in the future will be in private equities. Unfortunately, the small investor will find it difficult to access this market. Excerpted from the July issue of the Forbes Special Situation Survey Learn more/subscribe to Forbes Special Situation Survey