Saturday, March 12, 2005

Material Weaknesses and Share Price

Just 12 of 18 companies that made material-weakness disclosures in February saw their share price fall the day after, according to a recent analysis. And in 6 of the12 cases, the decline was less than 2 percent. Investors don't seem to be punishing companies that report material weaknesses in their internal controls under Section 404 of the Sarbanes-Oxley Act, according to an analysis conducted by Compliance Week. (As for whether the CFOs of these companies will pay the price anyway, that's a matter of wait-and-see.)

The publication's website, citing data from Raisch Financial Information Services, found that just 12 of 18 companies that made material-weakness disclosures in February saw their share price fall the day after the disclosure. And in 6 of the12 cases, the decline was less than 2 percent.

Material Weaknesses and Share Price

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Previous articles

SEC evaluating Sarbanes-Oxley rules

Sarbanes, Oxley: Give Rules a Chance

Law on CEO Awareness on Trial With HealthSouth's Scrushy

Senator Paul Sarbanes and Representative Michael Oxley Claim Corporate Legislation Works

Time to reassess 404 compliance

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A New Mood in Congress to Relax Corporate Scrutiny

SEC delay worries Senator Paul Sarbanes

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