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Non-Tech : The Enron Scandal - Unmoderated -- Ignore unavailable to you. Want to Upgrade?

To: Glenn Petersen who wrote (2848)	11/30/2003 7:36:57 AM
From: Raymond Duray	Read Replies (1) \| Respond to of 3602

Glenn, I'm afraid somebody is very unclear on the concept: (Spitzer's) Investigative results show up federal agencies Ahem, does it cross you mind that the Federal government is now working full time for the crooks? If not, this ought to be enough to convince you: Message 19546197

To: Glenn Petersen who wrote (2848)	11/30/2003 6:19:04 PM
From: Glenn Petersen	Respond to of 3602

With Rules, It's Look Before IPOs Leap story.news.yahoo.com By Steve James NEW YORK (Reuters) - Private companies thinking of going public have always had to adjust to a shift in corporate culture of being accountable to thousands of shareholders instead of a handful of owners or board members. Tough new accounting and compliance regulations in the 2002 Sarbanes-Oxley Act are forcing firms to look even more carefully before launching initial public offerings and leaping into the public markets, where their books will be more strictly scrutinized. At a recent panel here on Sarbanes-Oxley and IPOs, Randy Lampert, managing director of investment bank Morgan Joseph & Co. Inc. said: "I think Sarbanes-Oxley has been a watershed event for the capital markets." "More importantly, underlying all of (the rules and regulations) will be cultural changes and behavioral changes in the way people approach the public market," Lampert said at the panel discussion, which was organized by PR Newswire, the press release distribution service. Separately, META Group Inc. (Nasdaq:METG - news), which offers strategic business consulting and information technology research, has reported a 40 percent increase in inquiries from private businesses and smaller public companies on how to meet minimum Sarbanes-Oxley compliance requirements. Private firms planning an IPO and public companies with strong revenue projections are even setting aside portions of their information-technology budgets for Sarbanes-Oxley projects, META said. "The Sarbanes-Oxley compliance impact is not just being felt by large public companies. Rather, its impact will be felt by most companies doing business in the U.S.," said John Van Decker at META Group. The new rules are scaring off some foreign companies who had wanted to list on U.S. markets. And federal regulators are trying to be sensitive to their concerns. "If companies are torn between our requirements and their home countries' requirements we will try to accommodate them. We want to ensure that there are no insurmountable impediments for them to come to the U.S," SEC Commissioner Paul Atkins said during a visit to Hong Kong this month. Whether Sarbanes-Oxley curtails IPOs by U.S. firms is far from clear as the market is slowly rebounding from a three-year slump. The sector is off the dizzying heights of the 1990s, when there were an average of 200 IPOs a year; nine were priced in the first half of 2003 and 31 in the third quarter. NEW DOS AND DON'TS Many experts believe the new rules will make companies tighten internal controls before taking the IPO step. Lampert said the key was "compliance with philosophies of fair disclosure, fair dealing, honest and candid behaviors required to elicit the support of investors when you go public." Michael Wagner, a managing partner in the New York software group of PricewaterhouseCoopers who works with public and pre-IPO companies, told the PR Newswire panel he was helping pre-IPO companies regarding internal control rules of Sarbanes-Oxley. "Even though the act is only related to public companies, the amount of time and effort that pre-IPO companies are currently spending is quite significant," Wagner said. Adam Golden, a partner in the law firm Kaye Scholer involved in corporate finance, private equity and venture capital investments, said some companies have been reluctant to access the public markets as a result of Sarbanes-Oxley. "But it may be a little overstated in that ... companies and investors are going to be driven by the marketplace, and is the marketplace receptive to offerings?" Golden said at the meeting. "The last year or two has been a struggle for companies looking to go public. It's starting to improve ... that's a market reality," he added. Golden said Sarbanes-Oxley is the framework "creating a decidedly improved culture" of corporate governance. "Even private companies are using that framework to establish best practices standards with respect to internal controls," Golden said. He added that taking a company public under Sarbanes will require "a lot more scrutiny" by investment bankers, lawyers and accountants. Lampert said Morgan Joseph had revamped its checklists and due diligence procedures. "In the past, investment bankers might look at an infraction and say, 'Well, as long as we disclose it adequately and correctly ... we've done our job.' Now, the firm says: "If we find something that previously might have been disclosed, it might now be something that says we don't want to do this offering," according to Lampert. Golden said he has advised pre-IPO firms to raise significant issues with the underwriters "and get their take on it up front ... A number of underwriters may take the position that they're not going to participate in an offering, given a potential legal issue." Wagner said companies should also focus on audit committees. He encourages pre-IPO companies without any independent audit committee members who are financially literate: Don't wait until the IPO process to bring those people in. "You want to start bringing them in earlier on, so you're not making a complete change when you go from private to public," he said. Reuters America Equities Editor Martin Howell was also a member of the PR Newswire panel.