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Supreme Court Will Hear Sarbox Challenge

Silicon Alley Insider's Henry Blodget points out that part of the reason Silicon Valley is struggling is because there's no longer an IPO market for startups. This makes it difficult for VCs to exit investments, particularly during a recession when nobody's buying.

One of the reasons the IPO market is dead is Sarbanes-Oxley, says Blodget: "Why spend millions of extra dollars a year complying with a law that won't make your investors the tiniest bit safer and might get you thrown in jail for life if you blow a quarter?

"SARBOX should be rewritten just because it's expensive and ineffective," says Blodget. "If a company really wants to defraud you, they'll do it with or without SARBOX, and honest companies were already held to high standards before the law was enacted (the reason so many dotcoms went bust was not that they were committing fraud: It was that they were risky, early-stage investments in a boom and bust cycle)." Yesterday, it was revealed that the Supreme Court will hear a constitutional challenge to Sarbanes-Oxley. "Here's hoping they find it ridiculous," says Blodget.

Read the whole story at Silicon Alley Insider »

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