by John Tamny RealClearMarkets
Back in the early days of this decade when executive malfeasance was the scandal du jour, there was a rush among many CEOs to support Sarbanes-Oxley, a bill that would allegedly make them more honest. Sarbox on its own would have and did spook the markets, but unspoken of at the time was the oily eagerness among top CEOs to endorse a law’s passage that would to some degree treat them like criminals.
To some, the way in which executives prostrated themselves before Congress was the biggest scandal of all. More soothing to an investor would have been mass protest on the part of company chiefs offended that their integrity was being questioned by a political class famous for lacking anything of the kind. We’ll never know, but it’s fair to wonder if part of the reason stocks sold off before and after Sarbox’s passage had to do with investors wondering if CEOs were in fact corrupt; their lack of protest a suspicious signal.