Do subprime mortgage scandals imply failure of Sarbanes-Oxley?

After the recent collapse of Bear Sterns, TrainingIndustry.com has published an online article asking the question: Has the SOX [Sarbanes-Oxley] regulation and the massive investment to training corporate executives failed us? “Was the training to the executives adequate to identify and report risks or is Sox just a bad law?” asks the article published online by the training knowledge centre.The mandate of TrainingIndustry.com is to provide “best-in-class” business strategies, practices, and processes to help training suppliers partner with corporate executives.”Did we learn anything from all the corporate scandals of 2001, 2002, and 2003?” the centre asks in its online article, ‘Has Sox Failed?’ by Josh Uthe. “According to Bear Sterns investors, the law failed.”The online site notes that Bear Sterns stock, more than 30% of which is owned by its own employees, is now trading at less than 10 cents on the dollar from its Dec. 31, 2006 closing price of $160. “That sounds an awful lot like WorldCom and Enron,” Uthe observes. The article acknowledges SOX has made it more difficult to perpetrate the corporate financial scandals of 2000, 2001 and 2002, “but only from the perspective of a substantial increase in auditing.”In addition to increased auditing controls, corporate executives need additional training to help them identify and control risks within their organizations, and not only training on requirements to comply with SOX, Uthe notes. “Without this additional focus, we will continue to see failures like Bear Sterns. Poorly managed risk will result in a deterioration of shareholder value.”Uthe says the idea would be to develop courses and learning opportunities for senior management teams to better understand, identify and control risk.