By Maxine Shapiro, KERA 90.1 business commentator
Dallas, TX – Another former CEO was arrested today along with other executives of the company. The feelings towards CEO's and Big Business are one of widespread disgust. And if I hear the phrase "restoring confidence" one more time, I'm going to scream. But that's just what's got to happen. I'm Maxine Shapiro with KERA Marketplace Middays.
This morning as I'm watching CNBC they interpret their reporting for this announcement. Aldephia Communications founder John Rigas, three of his sons, and two other execs were taken into custody today. The possible charges include securities fraud, wire fraud, and bank fraud. My gosh, Aldephia is/was the sixth largest cable company in the U.S. They filed for bankruptcy protection last month.
But can we afford to continue to wage war on the CEO? That question was presented in a paper I read by Robert Tracinski, a senior fellow at the Ayn Rand Institute. Tracinski suggests that the legislature is overreacting and predicts that these regulations, that will probably be implemented, will have the following results. One: "The market will continue to falter." I don't think it will be the regulations fault if the market does continue on the downside. Two: "Corporate financial statements will become less accurate, not more." I definitely do not agree with what and I'll explain why in a second. Three: "Corporations will move overseas." Too expensive. And four: "Corporations will get less not more capable CEO's." There he's got a point.
But by August 14th, CEO's and CFO's of 945 listed companies will be required to personally certify - in writing, under oath - that their most recent financial reports are both complete and accurate. These officers will be personally liable for any false statements. This is why I believe that after August 14th, financial statements will be true. Until then, watch out for many a restatement.
And in fact, we must be careful not to prosecute or persecute all CEO's. Remember when politicians were statesmen? Well, we need to keep the caliber of the CEO high. I don't want to have to reminisce back when CEO's, the good ones, were smart, dedicated people. For KERA Marketplace Middays, I'm Maxine Shapiro.
Marketplace Midday Reports air on KERA 90.1 Monday - Friday at 1:04 P.M.