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RIP, Paul Sarbanes

Pour one out today for your homie, Paul Sarbanes, because a lot of you just might owe your gainful employment to him and Michael Oxley, who passed away in 2016.

Here are some excerpts from the Washington Post obit today about the former Maryland Democratic senator:

Paul S. Sarbanes, who as a young Maryland congressman drafted and introduced the first article of impeachment against President Richard M. Nixon and as a five-term U.S. senator tightened the regulation of corporate accounting practices after corruption scandals at Enron and other businesses, died Dec. 6 in Baltimore. He was 87.

The death was confirmed by his son Rep. John Sarbanes, who represents Maryland’s 3rd Congressional District. …

He served four years in the Maryland House of Delegates, in addition to his 36 years on Capitol Hill. His 30 years in the Senate were matched by only one other Marylander, Barbara A. Mikulski (D), who retired in 2017 after five terms. Mr. Sarbanes did not seek reelection to a sixth term in the Senate in 2006. …

Mr. Sarbanes won a Senate seat in 1976 and chaired the Committee on Banking, Housing and Urban Affairs from 2001 to 2003.

As chairman, he wrote with Rep. Michael G. Oxley (R-Ohio) the 2002 Sarbanes-Oxley Act, which was intended to ensure that publicly held businesses disclose to potential investors an accurate and complete portrayal of their financial condition.

The Sarbanes-Oxley law gave prosecutors new tools to enforce laws against business executives who mislead and defraud investors, and it was among the most far-reaching legislation regarding securities since the Great Depression.

It came in the wake of accounting scandals at companies such as Enron, Tyco International, Adelphia, Peregrine Systems and WorldCom, in which the true value of the businesses was overstated, deceiving investors who lost billions of dollars when the stock prices of the companies collapsed. The cumulative deceptions shook public confidence in the nation’s securities markets and endangered the stability of the national financial system.

From an investor’s standpoint, the measures of Sarbanes-Oxley have clarified the corporate financial landscape, said Nell Minow, a corporate governance expert. Many of the provisions of the legislation, she told The Post, had been debated and discussed for a long time, and in Sarbanes-Oxley, “their moment finally came.”

Whenever a SOX-related event occurs, I think back to a post Caleb wrote in 2012 to commemorate the 10th anniversary of the landmark legislation being enacted. He had asked accountants to “leave some words of appreciation, encouragement, disdain, whatever strikes you, to celebrate this day because we all know that SarbOx has touched you in some way or another.”

Some ideas:

A) Happy Anniversary, Sarbanes-Oxley. If it wasn’t for you, I wouldn’t be able to afford that apartment in the City where I conduct my extramarital trysts. ~ NYC Audit Partner (New Jersey resident)

B) Here’s to 10 more, SOXy! Since I’ve known you, I’ve developed a bit of a weight problem, a bit of a drinking problem, and somehow took up smoking. But you’ve also taught me a great appreciation for the increased accountability that we provide to the capital markets. Thanks! ~ An auditor who will probably die at their desk

C) Hey, SOX – I don’t know you that well but I hear good things about you. Looking forward to getting to know you better ~ Big 4 mailroom guy

D) Have a great day, SarbOx! I may work in tax, but we really appreciate all the press you give our firm although we won’t have anything to do with the inevitable implosion of our firm. There’s no such thing as bad publicity! ~ Tax Partners everywhere

RIP, Paul.

Paul Sarbanes, senator from Maryland who led overhaul of corporate accounting rules, dies at 87 [Washington Post]

Related article:

This is a Makeshift Card for Sarbanes-Oxley’s Anniversary That You Should All Sign