The benefits of Sarbanes-Oxley

Does this act really aid shareholders and prompt more accurate and transparent financial reporting?  One consequence the act may be at least partially responsible for is the very large increase in the number of firms that a de-listing their stock -- that is, the number of firms "going dark."

In April 2004, minutes after posting healthy increases in sales and earnings, the publicly traded Niagara Corp. announced it was "going dark," delisting its common stock. The company, a steel manufacturer with sales last year of nearly $300 million, was hardly alone: During 2003 for example, 198 firms went dark, up from only 67 in the previous year. While most companies say they are deregistering from major exchanges to escape the steep costs associated with regulatory filings, some investors and others see darker reasons, rooted in serving insiders' self interest. A new study co-authored by Wharton accounting professor Christian Leuz entitled, Why Do Firms Go Dark? Causes and Economic Consequences of Voluntary SEC Deregistrations, analyzes this recent trend.

Read more about trend that some see as very troubling.