Consumer Blog

Today's New York Times editorial warns "Investors Beware." Why? Powerful special interests continue to demand weakening amendments to proposed financial reform legislation. This week's biggest hit was the House Financial Service Committee vote that -- if sustained -- would permanently exempt all publicly traded companies with market values under $75 million from full accountability to investors. Fraud and malfeasance do not simply occur at bigger companies. There is no rational reason to exempt smaller firms from transparency and audit requirements that have been shown in numerous studies to be a modest burden and a massive benefit.  As a statement from the PIRG-backed Americans for Financial Reform and Consumers Federation of America said:   "the opponents just keep coming with their demands for a small-company exemption. As a result of these attacks, companies with under $75 million in market capitalization have still not implemented the audit requirement more than seven years after the [Sarbanes-Oxley post-Enron] law took effect.  Thanks to the Adler/Garrett  amendment, they never will." Adler and Garrett are, respectively, Democratic and Republican representatives from New Jersey. The House FSC will continue work on its package of reforms Tuesday, and a House floor vote on the full package, including the Consumer Financial Protection Agency bill (that needs protection from further debilitating amendments) and a derivatives reform bill (that needs a lot of improvement) is expected in early December. Have members of the Financial Services Committee forgotten that just one year ago in September -- following a decade of deregulation, dangerous practices and lax oversight -- that the entire U.S. financial system collapsed and took down the world economy with it? Why are they still cutting deals? And why is the White House helping?