“Accounting Irregularities = Sell?”: Not So Fast

by | March 30, 2004 | Articles, Compensation, Cultural Considerations, Finance

Is it too early to say what impact Sarbanes-Oxley is actually having
on quarterly earnings reports? Not according to the famous money manager Jim
Cramer [trivia fact: he’s a Harvard Law grad].

He believes the compliance landscape has drastically changed—and
that the witches’ brew of analysts’ puffery, Internet chat-room rogues,
all-CNBC-all-the-time, and vulpine CEO’s and CFO’s is not returning any
time soon.  Why?

  • the DOJ takedown of Arthur Andersen (too radical even for Eliot Spitzer’s
    blood);
  • SOX itself, which beyond anything else awakens CEO’s and CFO’s to
    the prospect of personally going to jail should their sub-alterns
    get too aggressive; and finally
  • that white-collar jail-time is now as serious, if not more so, than
    that meted out garden-variety felons.

He may be right, he may be wrong, but he’s putting his money where his
mouth is.

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