Sarbox was a knee jerk reaction to blatant accounting fraud. Fraud that was covered by existing regulations and ignored by the accounting firms tasked with the audits. Unfortunately, the Sarbox solution was dictated by the accounting lobby in what could best be described as a CYA effort.

The cost of Sarbox never ends. The accounting lobby made sure that they were well positioned to pickup the pieces and force their way deeper in to companies. They now dictate technology requirements proclaiming greater support of Sarbox. They venture far outside of the financial systems realm and work to dictate standards that are not applicable. Sarbox gave the accounting firms a self-fulfilling prophecy; they know something is wrong and they are going to find it and you will continue to pay because something will always be wrong.

Now we have the Fed, Treasury and SEC trying to deflect blame for the current crisis to the players on Wall Street and now SHR. This is not an issue of inheritance. Geithner was the President of the NY Fed and presided over a miserable failure of his office’s primary role, the regulation of Wall Street. He did not need broader powers, he needed to enforce the regulations in place and ask questions.

Do venture capitalist need additional regulations? Absolutely not! We need the Fed, Treasury and SEC to enforce the existing regulations where applicable regardless of the organizational type.

To my first question; at what point does government stop regulations of commerce? I have no idea, but hope we all survive the conflicted contradictions in the interim.

Geithner put it better in his remarks: “We can’t allow institutions to cherry pick among competing regulators, and shift risk to where it faces the lowest standards and constraints. . . . [O]ur regulatory system must be comprehensive and eliminate gaps in coverage. “

What would be so wrong with investment pools having to register in the same manner that individual investment advisors do? No one wants innovative, small private companies to have to reveal competitively sensitive information, but we probably do want a financial eco-system that is fully accountable to investors as to how money is managed, and by whom. This information might also be useful to private companies, too, when assessing the suitability of their prospective investors.

My bet, Bill, is that if markets were better and the IPO window was open, you wouldn’t be complaining about Sarbox. You would be flushing companies out into the market as quickly as you could.

Yes, sarbox is a requirement. it is a cost of doing business, and understanding your business.

all of you VC’s love to blame someone else for something. how many of your companies are profitable? oh, wait, sorry, none and its all because of Sarbox, right.

perhaps the focus should be on building profitable long lasting franchises. the rest will follow.