of how little has been accomplished, how little we seemed to have learned from enron and m.c.i., worldcom and the global financial crisis of 2008. >> reporter: regulators say exempting more companies from sarbanes-oxley will not save enough money to justify the increased risk for investors, but many members of congress believe the money spent complying with sarbanes-oxley would be better invested in the economy. darren gersh, "nightly business report," washington, d.c. >> susie: our next guest headed the securities and exchange commission when those new regulatory rules were written in the aftermath of the enron fraud. he's harvey pitt. he is now c.e.o. of kalorama partners, a consulting firm. hi, harvey, nice to have you with us tonight. >> good to be with you. >> susie: you heard our report. are we setting ourselves up for another fraud for scandal by repealing parts of the sarbanes oxley rules? >> i think that we're never going to prevent fraud just as a matter of fact. there are always going to be corporate scandals and people who think they can cut corners. we needed something, but w

it would dwarf the worldcom scandal. over the next hour marty asked andrew and mark to describe in depth who they were, their jobs at the firm, their relationship to their parents, their wives. he asked them repeatedly if they were involved in the fraud. we had no idea, they kept repeating. none whatsoever. we were completely blindsided. they wrapped up the story, and marty closed his notebook. we need to report this, and i'm not even precisely sure how to do that. i want to bring in my partner and get his thoughts. he picked up the phone. the clock was ticking. it was already 5:00 p.m. the office was closed. they needed the get somebody on the phone, but it had to be the right person. he turned to andrew and mark, are you both comfortable doing this, he asked? there was a clear sense that marty was in charge. he knew the right thing to do and wasn't going to give them any other option but to do it. yes, let's do it, andrew said. let's do it, mark repeated. andrew looked at his brother. we're doing the right thing. mark

to the top players in the countries could wrap their heads around the figure it would dwarf the worldcom scandal of 11 billion meaning bernie madoff had committed the biggest financial fraud in history. and next our markets manager had to talk about their relationships, their jobs and their lives. he asked repeatedly if they were involved. >> we have no idea. none whatsoever. we were completely blindsided. their raft of the story. we need to report this but i am not sure how to do that revenue partner who came on board from the sec allowed to bring him and. he picked up the phone. the clock was ticking and it was already 5:00. soon the sec offices would close they needed to get somebody on the phone but it had to be the right person. he turned to injure and mark. are you comfortable doing this? there was a clear sense he was in charge and knew the right thing to do and not to give them any other option. yes. to it. they looked at his brother. we're doing the right thing. mark nodded. reflecting on that moment of above to say we were waving a flag of justice in the year but the bottom lin

. >> what is this worldcoming to?hame. >> it's horrible. >> i think it's a disgrace. >> reporter: he was that wide and that long and he weighed 80 pounds. you see, this happened once before. to prevent someone from stealing him, again, they filled the statue with concrete. 80 pounds of concrete. >> it's an insult and injury to everybody when this kind of thing happens. it's not just personal. it affects a lot of people. >> reporter: investigators checked the security cameras at fridays even the ones over there at the outback. so far, nothing. only one clue here, tell tail tire tracks across the grass, leading up to the cresh. a vehicle was used in this theft. because baby jesus weighed 80 pounds, it's likely more than one person was involved. what kind of person would do something like that? >> cruel, insensitive. heartless. >> a person that didn't have anything else to do. a person with a criminal mind. >> cold hearted. >> reporter: police say what happened here is a crime. when there is a crime, there are consequenc

. >> what is this worldcoming to? >> it's a shame. >> it's horrible. >> i think it's a disgrace. >> reporter: he was about that wide and that long. he weighed 80 pounds. you see, this happened once before, so to prevent someone from stealing him, again, they filled the statue with concrete. 80 pounds of concrete. >> it's an insult and injury to everybody when this kind of thing happens. it's not just personal. it affects a lot of people. >> reporter: investigators checked the security cameras at fridays and the ones over there at the outback. so far, nothing. only one clue here. te telltail tire tracks. a vehicle was used in the theft. because baby jesus weighed 80 pounds, it's likely more than one person was involved. >> what kind of person would do something like that? >> cruel, insensitive. heartless. >> a person that didn't have anything else to do and a person with a criminal mind. >> cold hearted. >> reporter: what happened here was a crime. when there's a crime, there are consequences. in the hospital only in t

worldcom was bad because it is cooked its books on account.lowski just been money like there was no tomorrow. and they all went to jail. it was a certain amount okay, that probably is fixed. congress passed a law, sarbanes-oxley which made congress feel like they had done something. but then you had this whole of the world over here that was similar, connected, in a sense, you know, with things like mortgage-backed securities market. but in the 2000 time period, the last decade up to the collapse, there was shuja mounts of momentum pushing those kind of markets forward. the president of the united states were behind, everybody should all make -- own a home. congress both republicans and democrats were happily sing let's make it easier to own homes. and let's not take a look at how it's happening, whether these people can afford it, where the people are lying on the loan application. i mean, the system got in that eddie got almost laughably uncontrolled. and nobody much seem to care. there were some stories that raised some red flags, but it wa

by president bush following the last big round of corporate scandals, involving enron, tyco and worldcompposed 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 of financial statements or the viability of internal controls. >> kroft: and this law has not been used at all in the financial crisis. >> partnoy: it hasn't

terms of support for its values, whether we talk about the 2000 elections or whether we talk about worldcom lehman brothers and aig, talk about guantanamo bay. those i think are the issues that the united states is having problems with, and those are the places where the united states really needs to find its mojo in the 2012 presidential elections. unfortunately, my view, neither the republicans or democrats are getting the totality of that picture. >> jonathan has got a question. >> yes, ian, lovelyç glasses. >> thanks. >> continuing on imogen's compliment. >> i'll be on set next time. >> we spent a lot of time talking about north korea and that being a hot zone, but is there a country that's also a hot zone that the overall american public isn't aware of but should be aware of and should be concerned about? >> well, i think that the big places that are on -- on our radar right now have to be north korea. we're not paying as much attention to north korea as we should and iran, and those are countries that not only have the capacity to provoke, but they also have the capacity to imploerks

i think to some degree people convince themselves that enron, worldcom, you know, some of the otherswere one offs. okay, this company was bad because they did ask. world, was bad because it cooked its books on accounting. kozlowski just been money like it was, there was no tomorrow. and they all went to jail. there's a certain okay, that problem is fixed. congress passed a law which made congress feel like they had done something. but then had this whole other world over here that was similar, connected in a sense, you know, with things like mortgage-backed security markets. but in the 2000 time period, the last decade after the collapse there was huge amounts of momentum pushing those kind of markets forward. you know, president of the united states were behind it and everybody should own a home, congress both republicans and democrats were happily sing oh, yeah, let's make it easier to own homes. and let's not take a look at how it is happening. with these people can actually afford, whether people are lying on their loan applications. i mean, the system in that area got almost lau

of worldcom that committed fraud? >> that's the job of the s.e.c. it, catching crooks, catching people who defraud other people is clearly the role of government. the role of government is not to be looking over everybody's shoulder to tell me what kind of transactions i can or cannot engage in, tell me what shares i can't, who can sit on a board and who can't, who can invest in stuff. so when it's force, and i include fraud under force, that is where the government has a legitimate role to play. if there's a fundamental difference between harm, so, you know, for example, all these ideas about safety, the notion is that safety came from government, it's like manna from heaven. all the statistics show that safety improves everything dramatically, government steps in, puts in regulations and actually introduce the rate of improvement. safety makes sense from a profit perspective. i know it's a shock to people who've never been in business, but it's not a profitable activity to kill your employees. it's not. >> the statement has been made by david, and

worries about big business peaked in 2002 after the scandals at enron and worldcom.american people are worried about is big government and the role it plays in their daily lives. a government that has only gotten bigger under a president who is now running for a second term. here's the question. what do you fear most? big government, big business, big labor? go to cnn.com/caffertyfile, post a comment on my blog, or go to our post on the situation room's facebook page. wolf? >> good question, jack. >>> and new attempt today by members of congress to hold former senator jon corzine accountable for more than $1 billion now missing. this time lawmakers heard from customers of corzine's failed brokerage firm mf global and they had horror stories to share with all of us. lisa sylvester has been following this story from day one. what happened today here in washington? >> well, wolf, these were everyday folks impacted by the collapse, particularly farmers who use the brokerage firm among other things to park money there until they needed it to buy seed for planting season.

with our media partner, "the boston globe worldcom" this is one of a series. -- "the boston globe," this is one of a series. we will continue to follow this important campaign, one that has caused considerable national attention. we also want to thank the university for their support of this forum, and thanks to our good friends, and today's event is being webcast live and also at the "boston herald" webb said. we are pleased to draft two of the -- we are pleased to have two of their reporters with us. >> thank you, frank. we will be taking questions for our distinguished panel. we will also be taking questions from their twitter, which sort of kicks off and introduces the first point, how we are all here. >> in the audience, please, ask questions. that is what we are here. we want to get some -- that is why we are here. we want to get some input. the first thing we wanted to do was hoping you could introduce yourselves. not all families want to be involved in the campaign and want to be visible. did you want to start, liddy? >> i am liddy huntsman, the third daughter. i have never reall

so much time on forms that they cannot catch bernie madoff -- >> what about catching the ceo of worldcom that committed fraud? >> that is the job of the sec -- that is the job of the police, whatever you want to call it. catching crooks is clearly the role of government. however, the government is not to be looking over everybody's shoulder and tell you what transactions it can and cannot engage in, how much shares to buy in a particular company, who can sit on a board and who cannot sit on a board, who can invest in stock. when it is of course, and i include fraud under force, that is where the -- governmentwhen it is -- when it is force, and i include fraud under force, that is where government has a legitimate role to play. the notion of safety came from government, like manna from heaven. all the statistics show that city approves in the industry dramatically, government steps in, put in regulations, actually reduces the rate of improvement following those introductions. safety makes -- i know it is a shock to people who have never been in business, but is not a profitable activity t

we did not have enron, worldcom, tycos, sachs, countrywide, and all of the stuff we have just seen. we had some financial instability. we had some scandals in the 1970's. the accountants were writing their own rules in washington. one reason we had the accounting scandals later on is because we did not respond effectively to the accounting scandals in the 1970's. regulatory changes were never made. >> just a quick warning, we have about five minutes left. >> the questions are excellent. please bring them forward. >> i have to be quick. this has me going nuts, i must say. in full disclosure, i am a big government democrat, no question, but i have run into government 1000 times and thought, this is the stupidest thing. but it does not happen more often in government than in the private sector, wells fargo, comcast, sprint. every single private entity idea with has regulations based on the assumption i am cheating and it makes it more expensive to deal with. they are arguing as if it is between one or the other. my real question is, why do we believe this is about government versus fre

move away from the era of enron and worldcom and get to an era where we have markets that are balanced and fair, where they have the checks and balances and non-to give people the confidence that when they made an investment, that investment is what they thought. it is when they entered into it. unfortunately, the bills of which you were then speaking in strong support with the sarbanes-oxley bill, which has cost the dirt billions of dollars to comply with and as a direct cause of the lack of public offerings in recent years, yet even with all the provision for sarbanes-oxley, $1.2 billion of customer money could supposedly just vanish into thin air outside and global. a lot of this money belongs to hard-working farmers and ranchers across the country. just at mf global and segregation mods have been in place for years. the farmers and ranchers whose assets are frozen or last are not different than the rank-and-file workers that enron who lost some or all of their retirement savings. they are all innocent but comes the field corporate management and field regulation and certainly the i

>> back in 2001, all the corporate scandals, enron, worldcom and then disclosure a ceo has to sign off. they cannot say they don't know where it went. so we'd like to think that they can't not know. this kind of stuff is -- >> a run on this bank, what it looks like. a run, investors getting concerned how much exposure this company had, but if it was a run, very well could have been -- the investigation is looking into whether someone, someone, inside that company was quickly trying to move money around to stop the bleeding, and that's where it starts from there. >> we'll talk to michigan senator about this later on this morning. they're going to hold this testimony today and we'll see what happens. >>> coming up ahead on "american morning," architects call it the cloud. many 9/11 families say this building design looks too much like the cloud of debris that erupted from the twin towers. we'll tell you the firm's response. >>> iran delivered a defiant response following an appeal by president obama for tehran to return a u.s. spy drone that fell into their hands. >> i want my drone back