March 29, 2002
Just when the era of strict federal regulation appeared to be waning, two dominant events over the past half-year have reinvigorated champions of government regulations. Those were the terrorist attacks of Sept. 11 and the Enron accounting scandal.
The mood in Congress is to do something -- anything -- to rein in terrorists and accountants. Political observers say the Bush White House is moving away from opposition to more regulations in favor of trying to guide their direction.
Bills pending in Congress would impose more criminal penalties for securities fraud, re-impose regulatory controls over energy derivatives and give employees more freedoms and protections in their pension plans, especially when those contain their employer's stock.
These proposals come on top of sweeping new campaign-finance rules and a new federal bureaucracy overseeing aviation security with thousands of new federal employees.
- At least five bills are pending in Congress that would impose new rules on the accounting profession -- including banning cross-selling of auditing and consulting services.
- House Republicans would make it easier for employees to sell company stock in 401(k)s, and give employees protections from company "black out" periods when stocks couldn't be sold.
- Bills have been introduced to toughen penalties for accounting fraud, accelerate insider-trading reporting, require companies to expense employee stock option and re-impose regulations on some energy derivatives.
- Last year's energy fiasco in California has caused some states to slow down electricity deregulation -- although experts report that many states have gone too far to turn back.
Source: Greg Ip, "Mood Swings in Favor of Regulation," Wall Street Journal, March 29, 2002.
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