David S. Hilzenrath, of the Washington Post, writes:
- The Supreme Court yesterday agreed to consider a challenge to the Sarbanes-Oxley Act of 2002, the centerpiece of the government’s response to the watershed accounting scandals at Enron and Worldcom.
- The case tests the constitutionality of a nonprofit oversight board [PCAOB] created to regulate auditors of public companies. Plaintiffs in the case, including a Nevada accounting firm, allege that the oversight board was endowed with unchecked government powers.
Read the entire article.
So what? The article ends with this:
- If the oversight board were declared unconstitutional, it would not be difficult for Congress and the SEC to correct the defects, said Georgetown law professor Donald C. Langevoort. But if Congress were forced to revisit the legislation, the result could be a legislative free-for-all for interest groups, including those seeking to change other aspects of Sarbanes-Oxley, said Columbia law professor John C. Coffee.
- “As a practical matter, once this goes back to Congress” — if it does — “it may be irresistible for the Congress to re-examine the whole thing,” said Christian G. Vergonis of Jones Day, who represents plaintiffs in the case.