In a previous post I mentioned how the IPO market has almost dried up in the US, mainly due to Sarbanes-Oxley.
The "Interim Report of the Committee on Capital Markets Regulations" recommends changes to Sarbox among several other reforms, but according to the New York Times nobody is happy. Elliott Spitzer calls it "wayward and wrong-headed", the National Venture Capital Association thinks that the recommendations don’t go far enough.
Meanwhile the (original) Times reports on the peformance of US companies that have chosen to list on London’s AIM (Alternative Investment Market), where the regulatory burden is much lower.
This is what they call adverse selection.