Hedge Funds, Sarbanes-Oxley, and Soccer
ADhD still too bad for a longer story ;) but three quick articles of note before I try and clean my office...
1. The Washington Post has an interesting look at Hedge Funds. Not only how they have grown so much in size and number, but also how they are playing a major role in proxy votes. With the increased importance comes worries that these largely unregulated funds could add to market instability.
One quote: ""There are so many funds out there now, and so much money, that they have to take on an activist role or they are not going to continue to produce," said Joseph Aaron of Wood, Hat & Silver LLC, a San Francisco firm that invests in hedge funds for individuals and institutions."
2. The NY Times reports on Sarbanes-Oxley in practice. Citing numbers from various sources, Floyd Norris writes: "About 8 percent of companies affected have reported material weaknesses in controls, an indication that the law addressed a real problem...."
"But many companies have complained that the costs were too high and that auditors forced them to go through expensive procedures that accomplished very little. One survey of 217 companies, by Financial Executives International, found the average cost of compliance to be $4.4 million. The companies had annual revenue averaging $5 billion""
In response to these costs (and reports of reduced information flow), the SEC is allowing a slightly more lenient interpretations of the rule but stresses it is not taking the teeth out of it.
3. Takeovers can cause many problems and sometimes even lost business, but The London Times' look at the aftermath of the takeover of Manchester United by Tampa Bay Buc's owner Malcolm Galzer may redefine how severe it can get: because of fears of violence (imagine that at a British Soccer game), the team may not be able to have crowds at home games!
"...many ordinary fans, too, are angry about the takeover, fearing higher ticket prices and a wholesale sell-out to corporate sponsors. Last week they were burning season-ticket renewal forms and threatening to boycott the club and its merchandise. The question now is how far they will go to express their rage."
So much for a takeover being over when the papers are signed!
Time to get to work...