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Saturday 27th of June 2009
April 4, 2005

US trading strong despite Sarbanes-Oxley Act


by Brian Turner
US trading strong despite Sarbanes-Oxley Act

U.S. investors seem not to be worried that foreign companies will leave investing U.S. companies any time soon in protest of the Sarbanes-Oxley Act.

This Act requires companies trading on U.S. markets to show proof that they have instituted adequate internal controls to assure that they are prepared to avoid situations like the accounting scandals that rocked Enron and other U.S. corporations in the past few years.

Some European companies have protested the Act as too costly and threatened to stop the trading of their stocks in the U.S. rather than submit to its provisions, and even secured a one-year delay in having to submit to them from the Securities and Exchange Commission.

However, only a few European companies have actually delisted, including four British companies.

U.S. investors must not expect many more to follow those few, since the average daily value of foreign stocks that trade on the New York Stock Exchange is at its highest level in five years.

Considering that those investors would have to sell the foreign shares they own if the companies delisted, their confidence that delisting will not occur must be very high.

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Story link: US trading strong despite Sarbanes-Oxley Act


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