If compliance costs seemed to skyrocket since the adoption of the Sarbanes-Oxley Act in 2002, they did, according to the Securities Industry Association. The SIA found that in the past three years, the cost of compliance almost doubled from $13 billion in 2002 to over $25 billion last year, and some of the excess costs could be blamed on “inefficient regulation.” In its report, the SIA warned that investors may ultimately pay for the sky-high costs, the result of regulators duplicating each other, vagueness and inconsistent rules.
“The higher costs to industry firms from inefficient regulation may ultimately be borne by retail and institutions investors,” the study stated.
Reuters reports that some investors take issue with that assessment, pointing to some of the huge losses they suffered at the hands of the WorldCom and Enron in the days before SOX.