The "law of unintended consequences", discussed here, happens when one action results in an outcome that's completely unintended. No-one thought of it at the time.

One of the best known examples is the argument that World War Two wouldn't have occurred if it wasn't for the harsh conditions imposed on Germany in the Treaty of Versailles. In other words, a treaty designed to stop war resulted in a bigger war and the slaughter of millions.

Now a great Bloomberg scoop shows us how Sarbanes-Oxley has produced its own unintended consequences. The law designed to increase transparency has resulted in companies keeping secrets from investors by selling bonds, or debt securities, that aren't registered with the Securities and Exchange Commission. The only disclosure goes to institutions that buy the debt but the rest of the market is kept in the dark.

These unregistered bond sales have increased 50 per cent over the past two years. Bloomberg reports that at least 100 companies, including Australian retailer Woolworths, Siemens, and Miller Brewing are doing it but you can bet there'll be many more before the year's out.

The revelations are ammunition for the SOX critics. Just another example of what happens when a law is rushed through Congress without no cost-benefit analysis.