When the misguided leaders at Enron, Tyco and Worldcom committed fraud and marred their shareholders with huge losses, the Securities and Exchange Commission rightfully swooped in to prevent future cons.

The problem is that the corrective measure came in the form of legislation known as Sarbanes-Oxley, which became a stranglehold on business. It was a broad-based, sweeping regulation that undoubtedly was well-intentioned but ended up significantly hampering the competitiveness of U.S. businesses...