Roger Marshall: “I spent a lot of my career as a lawyer representing small banks and small businesses and individuals that felt that they…”

“I spent a lot of my career as a lawyer representing small banks and small businesses and individuals that felt that they had been defrauded as a result of false financial statements that had been provided them in order to induce investment or induce credit. Most folks who are watching this understand that they cannot file a false financial statement in order to get a credit card, that they cannot file a false financial statement in order to get a loan. They have got to comply to the letter with the information that is requested and provide that information, failing which they could end up in jail. That, I think, is largely what is going on here. The question is whether or not we are going to defer to the Financial Accounting Standards Board, which historically has set the standard for providing the financial statements of a corporation, whether we are going to defer to that body so that that body can figure out what kind of information must be provided so that the financial statements of a corporation fairly reflect the condition of the corporation, or are we going to interfere and essentially enable start-up venture capital corporations to mislead those who are investing in those businesses. Now, most investors are sophisticated enough they are going to read the footnotes and understand that there are stock options that have been granted, and that consequently the value of the corporation and its earnings have been affected as a result of that.”