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Companies Find Loopholes in Sarbanes-Oxley

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  • Description

    FBN’s Liz MacDonald on companies finding ways around the Sarbanes-Oxley law.

  • Duration 2:21
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And that -- them.

OK -- -- that was supposed to stop the CEOs scandals you're seeing now working out the way congress wanted him.

Elizabeth MacDonald is here with more details with you -- bottom line all the unintended consequent yeah that's.

I'm Melissa sorry you know when this does -- was an act in 2002 after Enron after WorldCom blew up and is meant to restore confidence.

And but then on the part of investors in the marketplace -- cover the lie covered a lot of accounting scandals and affect Bernie Ebbers you know quoted in the -- -- rather in a speech a year -- -- -- away -- -- that thing -- why is he read my Kiki articles single cross at the yeah yeah I don't but he was in I was surprised that eczema reading them but anyway so the issue is calls sarbanes Oxley.

And in that law it says.

CEOs and CFOs are supposed to literally signed their finance reports right saying look -- -- they are sound we have solid internal reporting.

The there's accuracy of its integrity of financial reporting.

And this is what's at issue now with what's going on -- not just Jamie Dimon JPMorgan Chase.

But MF global at other companies that haven't caught in the cross -- so the disclosures -- you'll see in a little close that we've got.

With -- that it basically JPMorgan is having given doing it and run -- around -- rule person banks says in this filing no material weaknesses in internal controls.

All your credit reported a look at the next statement that the bank is made.

Internal control over -- reporting may not prevent.

Or detect misstatements about the first -- yet that's exactly right -- so that's at issue here right so this is the fine print.

-- -- -- That is what we're looking at rate here's what what would make it stronger and -- eliminate the fine -- you know this -- -- you can have all the rule making going -- -- watch any -- TC -- factory going full -- You gotta have enforcement and T to got to have somebody down there actually actually enforcing laws and the other issue too with that JPMorgan Chase.

Big it Jamie Dimon is calling his moves economic hedges.

That you know what it doesn't matter there's no new line item on the financial Centre for economic hedges -- is for -- losses so these are trading losses that we've got to come clean on that front.

-- because testifies for congress they should drill him on that and ask some questions about that.

Again you could say their economic.

A lot you know hedges or -- hedging this of these moves it doesn't matter you look at -- trading losses and they basically it you know that easily add volatility to their financial statements.

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