1. Introduction On 25th of July 2002 the US president has signed the Sarbanes-Oxley Act (SOX Act) as a response to severe corporate scandals that have shaken the economic scene of the US. The SOX Act requires intensifying of financial reporting, auditor independence, corporate responsibility and other internal control mechanisms of all the US publicly listed companies and establishes penalties often to the extent of criminal accountability if the rules are not obliged (Sarbanes--Oxley Act of 2002). The important question is, conditional on the fact that the SOX Act imposed significant additional compliance costs to the companies, what consequences has it produced. Given the costs were indeed significant, companies' response on SOX Act could have been various--the companies could agree with compliance expenses, but also could go 'dark' (deregister from Security Exchange Commission but still keep trading their securities at OTC), completely withdraw from US markets and become private (as in Leuz, 2007) or register at a less regulated equity market abroad instead (noticed in Doidge, Karolyi and Stulz, 2010). Since the compliance costs of the SOX Act reduced the net benefits of US listing, for some foreign companies, the value of a listing became negative and hence led these companies to choose to deregister. It is a fact that multinational companies involve in international profit shifting that depends, as Huizinga and Laeven (2008) mention, on tax regimes on specific countries. Companies optimize their tax burdens using various mechanisms. Taxes, as well as compliance costs are consequences of governmental policies. It could be expected that the banks would (as in Demirguc--Kunt and Huizinga (2001) research mentioned in the Huizinga and Laeven article) accommodate to regulatory environments of their headquarters versus subsidiaries as a response to SOX Act implementation, as they did when shifted profits with respect to tax rates of countries of their subsidiaries. When considering what the consequences of SOX Act onto US publicly listed companies actually could be, we can present two opposing arguments. Firstly, we can agree that SOX Act imposes significant costs on companies. Ahmed, McAnally, Rasmussen and Weaver (2010) note that direct costs are dominated by audit fees, however other types of costs have made significant negative effects on operating performance of companies as well. Krishnan, Rama and Zhang (2008) analyze the SOX Act disclosures of firms and conclude that the compliance burden is uneven with respect to the size of companies Indirect costs count for the extra costs that firms that are going public incur (by D'Aquila, (2004)). Doidge, Karolyi and Stulz (2010) mention magnified risk-aversion of the CEOs due to increased scrutiny which can cause lower growth prospects. Both types of the costs can negatively affect companies' performances, and therefore the share prices. However, another view can be argued--as Coates (2007) notes, SOX Act is perceived as a promise for future benefits: as the increased financial disclosure takes place, information asymmetry decreases, causes lower risk perceived by market and translates into lower equity costs (Ashbaugh-Skaife, Collins, Kinney Jr. and Lafond, 2009). Aligned with this is a research by Jain, Kim and Rezaee (2008). They observe long-term significant liquidity improvements signaling recovery of the investors' trust after the period of corporate scandals. SOX Act added to the reliability of financial reports, reduced information asymmetry which in turn resulted in improved market liquidity. However, the effect was positively related to the firm size, meaning the larger firms enjoyed the benefit more. The focus of this analysis will be determining which effect--costs or benefits--has dominated in the investors' perception of the SOX Act. We wonder if the investors have considered the SOX Act as the determinant of the lower company profitability, the increased probability of discovering another corporate fraud or the overregulation in the U. …