Box 3.6 Senate hearings
Prior to drafting and introducing new legislation, the Senate undertook a series of hearings
to gain a broad and common understanding of the problems in the markets, as described
by Senator Paul Sarbanes, who in an interview in 2004 stated:
The Senate Banking Committee undertook a series of hearings on the problems in the markets
that had led to a loss of hundreds and hundreds of billions, indeed trillions of dollars in
market value. The hearings set out to lay the foundation for legislation. We scheduled 10
hearings over a six-week period, during which we brought in some of the best people in
the country to testify. . . The hearings produced remarkable consensus on the nature of the
problems: inadequate oversight of accountants, lack of auditor independence, weak corporate
governance procedures, stock analysts’ conflict of interests, inadequate disclosure provisions,
and grossly inadequate funding of the Securities and Exchange Commission.