| September 2006
By Ben
Warwick
Sovereign Wealth Management
SOX Rocks the Market?
It's been four years since the Sarbanes-Oxley Act (SOX) went into
effect. Enacted partly in response to the Enron and WorldCom debacles,
SOX is universally seen as the most sweeping legislation to affect
public accounting since the 1933-34 securities acts. While its reach is
enormous, the impact of this sweeping reform is having some surprising
effects, both direct and indirect, on the stock market.
There was
ample evidence that before SOX was passed, companies with better
governance structures enjoyed higher stock returns. A study performed by
Paul Gompers and others at Harvard Business School (see the February
2003 Quarterly Journal of Economics) showed that in the 1990s, firms
that scored in the highest decile of shareholder rights earned abnormal
returns of 8.5% per year, enjoyed higher profits and sales growth, and
made fewer corporate acquisitions
Click
here for
the full article and this month's Index Numbers.
© 2006 Wicks Business Information, LLC
 |
Also at InvestmentAdvisor.com
September
Issue Web Extras
Additional editorial content related to items in the September issue of
Investment Advisor.
Prudential
Agrees to Pay $600 Million
Fines and restitution to
settle market timing charges.
Also by Ben Warwick
Dissecting
The Value Rally
Growth stocks are being taken to the woodshed as value indexes,
regardless of capitalization, continue to outperform—Searching
for Alpha, August 2006.
The
Currency Conundrum
As if investors don’t have enough to worry about, here comes
another beast to tackle—currency exposure.
More Hot Topics
available at InvestmentAdvisor.com
Alternative Investments
Broker/Dealers
Columnists
Compliance
Custodians
Insurance
Marketing
Mutual Funds
Planner Profiles
Practice Management
Retirement Planning
Tax Planning
Technology
|
