Regarding this morning's post on Spitzer, Schumer and SarbOx reform, I somehow missed this item from Ben Smith of the Daily News. Ben, a man in the know, says that while Spitzer "doesn't quite seem to buy Schumer's premise of New York's threatened competitiveness," he's open to some changes to Section 404, which lays out the onerous internal controls that critics charge are the main reason for the IPO exodus overseas, and that the two men are discussing specific changes.

That said, the idea of a governor of New York disinterested in Wall Street's troubles (in his CNBC interview, Spitzer flatly states that the IPOs have gone overseas almost entirely because Europe and China are growing, and not very much at all because of regulation) is disturbingly passive. The trouble with this argument, of course, is that while Europe may have a booming IPO market, it has little other economic growth.

An interesting point over at The Conglomerate—only six of the report's 32 recommendations are focused on SarbOx, and those propose relatively minor changes:

Mostly, the report seems to see the problem as the upsurge in white-collar prosecutions or the 'liability risks' associated with being a public company in the US. The report does focus on the need to enhance shareholder democracy (a point I will post on later) as well as the need to reform the regulatory process. However, many of the recommendations center on ways to reduce the nature and intensity of corporate prosecutions. Hence, the report recommends such reforms as allowing directors who act in good faith to be insulated from out of pocket damages in securities actions, ensuring that entity liability is sought only in exceptional cases, prohibiting the DOJ from seeking waivers of attorney-client privileges or seeking denials of attorneys fees for their officers and directors, and protecting auditing firms by creating safe harbors for certain conduct or otherwise capping their liability.

In short, less power to the Eliot Spitzers of the world.

What's striking is that Spitzer and the Greenberg Commission agree on the key point—both argue that SarbOx reform is not the main reason for the IPO exodus. While Ben mentions that in his editorial board meeting with the News, "Schumer had nothing but praise for Spitzer, and expressed the hope that he could bring Eliot along with some of the changes to Sarbanes-Oxley, including ending the requirement that CEOs personally attest to the accuracy of their annual reports," it still seems to me that the governor-elect's indifference places him on a collision course with Senator Schumer and Mayor Bloomberg, who have been public and impassioned in their calls for reform. And the question remains: Where does Hillary stand?