Powerful Sarbanes-Oxley Bureaucrats Challenged in Court

Point of Law reports on an appeals court hearing Tuesday over the constitutionality of the Public Company Accounting Oversight Board.   (The PCAOB, which produces tons of red tape and “busywork” for accountants and businesses, is the bureaucratic agency created by the 2002 Sarbanes-Oxley Act, a law that cost the stock market $1.4 trillion in value, and business $35 billion in annual compliance costs, while doing virtually nothing to prevent corporate mismanagement).  Ted Frank, Director of the AEI Legal Center, reports that “the DC Circuit heard arguments appealing the dismissal of a challenge to the constitutionality of the Public Company Accounting Oversight Board (Feb. 2006), an institution whose members are appointed by the SEC, which would seem to violate the Appointments Clause. . .A panel of Judges Brett Kavanaugh, Judith Rogers, and Janice Rogers Brown expressed substantial skepticism to the PCAOB’s position, as Michael Carvin argued that the board was a permanent government-like agency with extraordinarily broad and unchecked prosecutorial powers, but outside the power of the president to appoint or remove officials. (Dow Jones Newswires, Apr. 15; CEI press release). Because of a nonseverability provision in Sarbanes-Oxley, a finding that PCAOB is unconstitutional would strike down the law entirely, but the argument was not reported on by any newspaper—not even the Wall Street Journal.”  CEI is assisting in the court challenge to the PCAOB, a case known as Free Enterprise Fund v. PCAOB, and earlier explained how the PCAOB violates the Appointments Clause.