Spencer Cox: “Fraud and unfair dealing are the enemies of the free enterprise system. And as we can see from the turmoil in our…”

“Fraud and unfair dealing are the enemies of the free enterprise system. And as we can see from the turmoil in our markets, our country is paying a very high price because of the corporate fiduciaries who have broken faith with their employees and their investors. We have tough laws on the books to deal with all manner of crime, including corporate crime; but just as bacteria mutate to avoid the latest antibiotics, those who cook the books are constantly changing their recipes, and we have to keep our laws and our remedies up to date. Enron, Global Crossing, WorldCom, and the other cases that we have seen have all centered around accounting frauds. Abuses of accounting rules were central to each of these cases. Using the regulatory thicket of detailed accounting rules, the malefactors in these cases intentionally structured sham transactions to disguise their true financial condition. That is why the central reform in this legislation is the creation of an accounting oversight board to see to it that accounting standards once again make financial reports truthful, honest, and clear.”