it's called the sarbanes-oxley act of 2002.verwhelmingly passed by congress and signed by president bush following the last big round of corporate scandals, involving enron, tyco and worldcom. it was supposed to restore confidence in american corporations and financial markets. the sarbanes-oxley act imposed strict rules for corporate governance, requiring chief executive officers and chief financial officers to certify under oath that their financial statements are accurate, and that they have established an effective set of internal controls to insure that all relevant information reaches investors. knowingly signing a false statement is a criminal offense punishable with up to five years in prison. frank partnoy is a highly regarded securities lawyer, a professor at the university of san diego law school, and an expert on sarbanes-oxley. >> frank partnoy: the idea was to have a criminal statute in place that would make c.e.o.s and c.f.o.s think twice, think three times before they signed their names attesting to the accuracy

new jersey republican scott garrett says sarbanes-oxley was a costly over-reaction. >> now, it's the 10-year anniversary, so its not like we're moving in a knee-jerk reaction in response to undo it, or to change it. its been 10 years to see how it played out, and we've seen that it played out pretty poorly. >> reporter: garrett is backing legislation that would exempt companies with a market capitalization of less than $350 million from the toughest sarbanes-oxley accounting controls. the president's jobs council suggested an exemption of up to $1 billion. securities law professor john coffee estimates that would cover roughly half of the companies listed on the new york and nasdaq stock exchanges. >> so we are seeing a cycle. there is a crisis. congress tightens controls. thereafter, the industry quietly lobbies step by step, cutting little slices off the salami at each stage to escape that regulation, usually saying it is costly and interferes with job creation. >> reporter: garrett says sarbanes-oxley cost far more than originally estimated and did little to improve the quality of

canseco's questions were focusing on sarbanes-oxley, focusing on godfrey. we've got the 33 act, the 34 act. all sorts of things, but the thing we don't have some specific requirement that there be a segregated account. that may be too harsh on the system and won't operate very efficiently. but in this instance, it would've potentially blocked or been a firewall to slow down the movement of the money. so i am just trying to figure out as mr. y no less, how could we have prevented this? because in the last days, your work was chaotic. >> congressmen, until the facts are peeled that i literally thousands of transactions, i am moving into a speculative for him and i could be misleading. ! mr. avila, giovanni response to that? be her year as legislators. i'm not here to judge what happened. a lot of people lost a lot of money and i'm trying to figure out if there is a way that could be -- we could do with it in terms of the law to stop this from happening. >> congressmen, at the risk of repeating myself, i think that we will and the fullness of time, when we und

rehearsed, but also couched in the language that could serve as a defense against sarbanes-oxley.u'll be talking about it more on the journal editorial report. paul, thank you. he hosts that report every day -- i'm sorry, every saturday, 2 p.m. eastern here on fox news channel. jenna: well, state governments drowning in debt now slashing their budgets over the last few years in response, so one of the questions we have today is how is spending actually going up? dan springer with more on this from seattle. dan? >> reporter: yeah, jenna, it's because politicians really at all levels have a different definition of what a budget cut is. they say they're cutting way back when, in fact, all they're doing is spending a little less than what they had hoped to spend. they are actually spending a lot more. take washington state, for example. the governor is calling for a big sales tax increase to avoid $2 billion in spending cuts. she says the state has already cut to the bone by chopping $10 billion, but her numbers don't quite add up. total state spending rose $2 billion since 2008, stat

. >> what do you think now of all this talk to repeal share babs oxley. the view is-- share bains observationly. the view is that all these views and all these reforms have done veriological to prevent other fraud and financial crises and they say it is time to repeal this, what are your thoughts? >> well, let's not look at repealing, you know, sharbanes-oxley. obviously something was needed. when they coulds lad, all those 2002 collapses, congress looked at stock options, but was pushed back. we've got to look at why our compensation system are incent vising this gamble the company risk that was epitomized with the 2008 collapses. >> susie: so what would you like to see happen? it has to be more than just stock options. there's a lot of things that are not quite right with the system that we see. the financial crisis, mf global recently, countrywide, what is behind all of that? >> well, when you really look at inside those companies, even within leeman brothers they had risk management folks that were ph.ds, very bright that were warning company executiv

a lot of people dislike aspects of sarbanes-oxley.equires the cfo and ceo, the top dogs of these companies to attest to the financials at these large corporations and that hasn't been enforced. if you aren't going to enforce, why make all these new laws that just make it complicated. the ten commandments fits on one page. >> capital requirements is two words. anyway, it's an absolute pleasure, mike. congratulations on the book. and again, if you're going to read a book about wall street, i really can't think of somebody who understands better how banks actually work and how they they have worked for a long time than mike. "compile on wall street: one analyst's fight to save the big banks from themselves." congratulations and thanks for the time today. >> thank you. >> and good-bye to the panel. straight ahead, talk about fanatics, as we head into bowl season, a new survey goes inside the minds of college football fans and the results are next. my doctor told me calcium is best absorbed in small continuous amounts. only one calcium sup

starting to cool off though oxley in the suburbs. those numbers falling into the low 40s. just know that. 43 in gaithersburg. 46 in leesburg. and coming into manassas with the current temperature of 45 degrees. as far as what we'll be seeing rainwise, the storm 4 doppler radar is all clear. we're not any rain over the next 24 hours. it could be a little different story as we make our way into thursday but we'll talk more about that coming up. your good night wake-up forecast first. dropping to about 40 degrees by 9:00. 39 by 11:00. up tomorrow morning once again in the mid 30s. it is going to be a rather chilly start out here. and right now we're a little on the cool side. that doesn't seem to bother the neighbors. say hi, guys. we're going to meet the family coming up in just a minute. and we're going to ask them, 81 inflatables. yeah? all right. wait until you see them. >> really? >> we want to hear from them. >>> a proposed law in the district is bad news for college kids who park their out of state cars in nearby residential neighborhoods. they are considering a bill t

honestly, i helped write sarbanes-oxley.ceo of country-wide signed those statements. i don't understand why in god's name, lenny brewer, eric holder rmpbt going after him and putting him in jail. >> you have folks like the attorney general of new york, snyderman. >> lisa madigan and others. >> why has the administration not taken a firmer stance? >> i'll tell you why they haven't done it. it's easy. >> last thing the obama administration wants to be is on the opposite side -- they have a tenuous relationship. >> there's a good story in the "wall street journal" today talking to a former fbi prosecutor or investigator saying we're bringing civil cases in a lot of these areas because it's very difficult to bring criminal cases based on stuff in the mortgage documents. maybe you disagree. maybe it is easy to bring the criminal cases. there are now people on the record saying we just made the decision to go civil enforcement. s.e.c. fraud cases. >> the administration should pony up at least one of two of these jokers and just ta

enron scandal shook the accounting industry, leading to tougher federal standards under the sarbanes-oxley act. the company's implosion also left the accounting industry with four big firms, instead of five. accounting professor thomas lys from northwestern university's kellogg school of management says less competition has been costly. >> that certainly puts restriction on price competition or service competition, which in turn increases the cost. >> reporter: for altair advisers, the last ten years have been good ones. the firm has tripled in size. still, founding partner jason laurie says watching what happened to andersen was a valuable business lesson. >> just because you're a big firm, just because you've been in business a long time doesn't necessarily mean that you'll stay in business. >> reporter: diane eastabrook, "nightly business report," chicago. >> susie: tomorrow, we talk with the woman known as the "enron whistle blower". sherron watkins was the enron vice president who alerted then- c.e.o. ken lay of accounting irregularities at the energy giant. >> tom: here's what we're

look at this data it says something entirely different i thought we had this law called cert means oxley it apparently doesn't apply to people showing up on you know various mainstream media outlets are claiming how wonderful they are all their company is on the brink of collapse fold but there needs to be some kind of enforcement mechanism here when you have firms that have their representatives showing up in the media to claim things that turn out to just plain old fashioned be false i don't understand how this not something that you could sue over as an investor but it appears that you know this falls into the idea that well you know we all the first amendment right to speak and it doesn't really matter whether know we say has anything to you know any any resemblance to the truth right now of course the banks earned the thirteen billion from processing the secret loans and also know their earnings were then paid out as bonuses so the other taxpayer have the right to reclaim at least that thirteen billion that was fraudulent least on from them unfortunately probably not but you could p

he may have broken the law sarbanes oxley in falsely certifying financial statements.he may, we could go through a list of possibilities. but talking with the investigators, talking with the congressional committees i can tell you. this right now not one single agency has evidence of wrongdoing so far as i can determine going through my conversations with the folks involved. merrill lynch debacle stanley o'neal. we know why they went bankrupt because of the mortgage derivatives and all of that we know. they lost all their money in that. but we don't know where the money is in mf global and corzine says he doesn't know. i think there has to be an fbi investigation. somebody might have stolen the money, lowe. somebody might have stolen it. >> absolutely. >> whether you have 1.2 billion missioning from a company that had $41 billion in assets, that is a lot of money by any definition. >> bill: yes. >> we do know that there is an investigation into the criminal possibilities here as well. so, don't give up hope. >> >> bill: i'm not hoping. i don't want to be a bad guy. i'm

you borate supporter of sarbanes oxley -- you were a supporter of sarbanes oxley. >> my understanding is that our books and records were reflecting the chaos that occurred in the last two or three days as the firm was under severe pressure and have lost the confidence of the marketplace. i think that is distinct from the books and records. i have reason to believe based on the reporting that occured that they were not in a mess. that is a question i think others will have to think about after they look at them. hourss clear in the last there were many, many, many more transactions than typically occur. >> why did mf global report that it didn't have any position when it began entering into transactions that entered into debt exposure? >> i believe without the ability to be certain on this, always open to confirming with records, you must be looking to the month end reports on our capital position. in september 2010, it is quite possible that beginning positions we took were on the books. >> my time has expired. we appreciate the indulgence. we turn to the ranking member of people like

[applause] three, repeal sarbanes-oxley immediately. every one of these steps creates more jobs. it lib rates small banks, moves in the right direction. i do think you need some health reform right after you repeal obama care. we need to reform some financial services after we repeal dodd-frank but this system is guaranteed to be crument and wrong and it is crippling the american economy. now, a couple more stems. we need to replace the environmental protection agency with a brand-new -- [applause] we need a brand-new environmental solutions agency. i would not transfer anybody from the current agency. this is an institution which has grown so radical, so lacking in common sense and so dedicated to crippling american business and dictating to local communities that it needs to be replaced bay common sense pracks -- practical organization that focuses on innovation and developing new and better approaches and not punishment and dictating to the whole country. i am for a 21st century food and drug administration, which is in the laboratory, understanding science and accelerates get

dodd-frank, sarbanes oxley, and the lack of ability to give options and because of the we regulations litigation, the labor laws that we have. no. we started in 1978, 1979 and we did 2349 have -- not have these problems. >>neil: but you had an economy mired in a recession as bad as things get and you got it going. >>guest: yeah, but america wants to help you. america wanted to let you grow. and things everyone not out there. we did not have this antibusiness we attitude that we have today and it is permeated not only in the government but it is starting in our schools, as well, kids are taught that capital im, and i am sorry i used the word, the free enterprise system is bad. it is not bad. it is like you are afraid to use the term. that is why we started the job creators alliance and the reason was that we wanted business people to be able to go out and talk about not only what the federal government is doing to them, but what local governments and state governments and all the regulations they have to go through and i would hope that someone, whoever is going to be president of the

the spending restraints and getting rid of obamacare, sarbanes oxley, and dodd-frank this is what a conservative growth reagan economist president would do and newt who was there at the beginning, he is proposing exactly the reagan camp agenda. >>dagen: great to see you thank you for coming to us first. art laffer, take care. happy new year, too. despite the endorsement, larry sees ron paul or romney taking top prize. we should not be ready for big surprises? >>guest: i am sticking by it but i am always ready for a surprise. remember, in 1980 everyone was shocked when bush beat ronald reagan or when pat robertson pushed the same george h.w. bush in third place in iowa and four years ago, everyone was shocked when mike huckabee beat romney in iowa. so, iowa is full of surprises. we are always welcoming those surprises when they happen. >>dagen: you don't think, do you think the likelihood of a rick santorum coming out of nowhere, how small is it next week? >>guest: well, if you are talking about finishing first, obviously sit a very small probability. but, if there are three or four tickets out o

. >> reporter: i know the kids oxley love it. the kids in the neighborhood love it.ou guys set it up where you have that nice little path that comes through the front over to the back so that everybody can see the back of the yard, too. you've done something that incorporates a little bit of a game for the neighborhood kids, too. >> i created an i spy game where the kids can count the number of mickey mouses or different characters as they look around. >> there are seven mickey mouses. >> thank you. >> reporter: i tried to count the santa clauss and i stop at 23. i'm not sure where i'm going from there. let's take a look at the numbers as far as the temperatures. you know it is a little on the cool side. it feels like krl out here. 47 in the washington, d.c. area. i almost said orlando, then philadelphia. now washington. gaithersburg at 37 degrees. baltimore at 42. down to the south, fredericksburg around 37 degrees. we're starting to cool off under clear skies. and we're going to continue to do so. into the 20s once again in most of the suburbs. 26 in frederick. 24

president obama talked about section 404 of sarbanes oxley. we heard how remains one of the most egregious deterrents towards small business men and women accessing capital but i don't know that you or the sec has said anything about the cost benefit analysis of section 404 and its compliance as relate to small forms. >> we share the concern about access to capital for small business. we created a new advisory committee helping us confront small business capital formation issues and looking at all kinds of initiatives including raising the limit on regulation a offering with shareholders at the right number of for a company to have to begin publicly reporting to the sec whether we should relax general solicitation ban and other -- we have a lot on our place and a lot of initiatives on going. i have personally weighed in on concern about raising the 404 be exemption as high as some bills consider doing that. it is $75 million and covers 60% of all public companies do not have this reporting. to go to $1 billion would concern me because we have

then we want to repeal sarbanes-oxley which is a bill that added a lot of paper work for no new net information. so people would be better off if we eliminate those. i would ask congress when they come in to session on january 3rd next year, not 2012 since we're almost in it, the year after next as of today, next year as of tomorrow, i would ask the congress to stay in session and to repeal all three before the presidential inaugural so the day after the inaugural i could sign them and we would have begun to clear out the clutter as of that moment. i would also on the day of the inaugural sign a series of executive orders all of which will be posted on october 1st so it will be part of the last move campaign and the first executive order i'll sign will abolish all of the white house czars as of that moment. [ applause ] on longer perm regulatory reform we need to replace the epa with a environmental solutions agency. the current spae a bureaucracy totally out of touch with reality, and very destructive of local governments and destructive of both agriculture and industry and people of you have

. >> so oxley, though, and i saw the story first reported on "nightly news" last night.y. the headline is it is worse than we first thought. do you not see the headline that way? >> reporter: well, the numbers certainly show that. from a real life perspective, mostly experts look at a variety of indicators. and even once we have them, it is climbed of funny. we actually spent relatively little amount of time on them. we spend a lot more time digging behind the numbers because there's so much that we all know any way the numbers don't tell us. there are all kinds of variables they don't reflect. all kinlds of i haddio sink ra r. home buyers were for a home. if you need a home and you have the money you won't not buy a home because these numbers retroactively have been revised down. you'll go look at a home and you're more focused on the prices in a particular neighborhood. same thing with developers. most developers need to have a local market study done which is very extensive and it is not based on this information any way. >> this report just quickly says that 3.5 mill