Two restatements provide fodder for the case against providing Sarbox 404 regulatory breaks for diminuitive companies.
Supplying fuel for arguments against regulatory breaks for small caps, Richardson Electronics and Hemispherx Biopharma announced restatements stemming from accounting errors and saw their share prices dive.
Securities and Exchange Commission chairman Christopher Cox said earlier this week that small companies shouldn't necessarily expect a pass on complying with Section 404 of the Sarbanes-Oxley Act, which dictates stiff rules for assessing internal controls. Former SEC chairs Arthur Levitt, Richard Breeden, and Lynn Turner have already expressed their opposition to such exemptions.
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