LOCKING UP CEOs AND CFOs
Criminal prosecution of top execs for knowingly signing off on false financial statements has a chilling effect in theory. But despite Bush's call for stiffer sentences, proving intent to defraud remains difficult. What's more, juries are capricious in complex financial-fraud cases, and corporate biggies hire top legal talent to shield them from jail time.
DISGORGING ILL-GOTTEN GAINS
Legislation to require CEOs to give up ill-gotten gains--stock options and bonuses based on false earnings--gives the SEC authority it already has. Despite hundreds of company restatements and dozens of SEC investigations for accounting lapses, the SEC has requested disgorgement in only four cases so far this year. Investors rarely see any of this money.
A BAN ON MOVING OFFSHORE
Hill liberals hoped to attach an amendment to the Senate accounting-reform bill that would ban U.S. companies from moving headquarters offshore to avoid taxes. Democratic leaders, however, worry that too many amendments will weaken GOP support for the core reform measure. Upshot: Shifting corporate HQ to the Bahamas solely for tax avoidance remains an option.
LIMITING COMPANY STOCK IN 401(k)s
Liberals sought to restrict companies' right to match employee contributions with company stock. But the drive fizzled when employers threatened to end company matching if they couldn't use their own shares. Employees also balked at an artificial cap.
EXPENSING STOCK OPTIONS
Some headway had been made on reformers' efforts to mandate that the cost of stock options be deducted on income statements. But tech industry objections have convinced many Dems that expensing options would stifle growth.
OVERSIGHT OF DERIVATIVES
These unregulated financial instruments played a big role in Enron's questionable energy trades. Aggressive oversight seems unlikely, though, because many business execs say they remain essential to hedging strategies.
REINING IN ENERGY TRADERS
Democratic proposals to subject energy trading companies to oversight by the Federal Energy Regulatory Commission, or to give it the ability to impose criminal penalties on companies that manipulate power markets, have been rejected.