The Impact of the Sarbanes-Oxley Act on the Cost of Going Public

This paper examines the impact of the Sarbanes-Oxley Act (SOX), a legal framework intended to increase transparency and accountability of listed companies, on the cost of going public in the US. We expect SOX to increase the direct cost of going public, but decrease the underpricing because of reduced asymmetric information. Our main results corroborate these hypotheses. First, we find an increase in the cost of going public of 90 bp of gross proceeds. Second, we record a reduction in underpricing of 6 pp, which is related to a reduced offer price adjustment. This supports our hypothesis that SOX represents a mechanism to reduce asymmetric information.

The Digital Economy Act in the dock: a proportionate ruling

The UK’s Digital Economy Act 2010 contains measures to enforce copyright on the Internet, specifically a two-tiered form of a graduated response.The Act was challenged in the High Court by two of the UK’s biggest Internet Service Providers (ISP), who obtained a Judicial Review of the copyright enforce- ment provisions. This paper is an overview of the case, based on the hearing of March 2011 and the ensuing judgement. It focuses on the two most hotly contested grounds for the challenge, namely an al- leged failure to notify the European Commission under the Technical Standards Directive, and the pro- portionality or otherwise of the contested provisions. It observes how the judgement accepted the defence argumentation of the government and the copyright owners as interested parties, and how the ISPs appeared to be put on the back foot.