The Competitive Enterprise Institute (CEI) and the Free Enterprise Fund have challenged the constitutionality of the Public Company Accounting Oversight Board (PCAOB), created by the Sarbanes-Oxley Act of 2002. Last week, the Surpreme Court agreed to hear the case.
According to Christine Hall at CEI:
The Appointments Clause of the Constitution requires that "officers of the United States" be appointed by the president and confirmed by the Senate. But the officers serving on the PCAOB, with tremendous power to impose criminal and civil penalties on people and companies accused of violating accounting regulations, were not appointed that way.
"The Founding Fathers wanted powerful government officials to be vetted by the President and the Senate, to help ensure agencies remain accountable to elected officials and ultimately the American people," said Sam Kazman, CEI General Counsel....
"The PCAOB has been very bad for the economy," said Hans Bader, a CEI attorney. "The biggest beneficiaries of the law have been the big accounting firms that failed to warn the public about Enron and similar scandals, which are charging record fees to help businesses comply with the mountain of red tape created by the PCAOB."
The Sarbanes-Oxley Act of 2002 created the Public Company Accounting Oversight Board, giving it authority to set accounting standards, impose its own set of taxes, and open investigations of accounting firms big and small. Yet unlike counterparts wielding similar authority, such as the IRS commissioner and Federal Reserve governors, PCAOB members are never vetted by the President or by the Senate, as neither of these bodies have a say in who will be appointed.
The PCAOB's interpretation of Sarbanes-Oxley's section 404 has cost public companies more than $35 billion a year, has proved especially burdensome to smaller public companies, and has cost the economy as a whole over a trillion dollars, according to a Brookings-AEI study....
In the following video, John Berlau, Director of the Center for Investors & Entrepreneurs, explains Sarbanes-Oxley and discusses its horrible effect on businesses.
Yea we there will prolly be more regulations after this like you said. Hopefully not though...:
Posted 05/29/09 06:41 AM Justin DeWind Grand Rapids, MI
Regulatory laws are either introduced by big business or after a localized crises. They rarely, if ever, work as they are intended.
Just look at the most heavily regulated industries and you'll find little to no small businesses or entrepreneurial activity. Large businesses with strong ties to the government exist instead and drive prices up or are price-fixed via government subsidy.
Posted 05/29/09 07:54 AM bobjones68 Schaumburg, IL
Sarbannes-Oxley = Socialism Lite .. is it any wonder its been a huge failure?
Exculse me, but why is the C4L making a big deal about this lawsuit as if the principle of violent intervention into the free market is being challenged? It clearly is not!
The lawsuit against the Act is based on technicalities. So who cares what the Supreme Court is going to rule. If they rule it unconstitutional, Congress will simply revise the Act and make it more severe now under Obama.
What is the lawsuit trying to prove? That the Constitution still means something? It clearly does not. The supreme court is a circus, just like the courts in any other dictatorship.
They are challenging the appoint process only, it seems to me... The whole dang bill is un-constitutional. Challenge the whole thing. Get the SC to stand up and say enough is enough. If you lose on that point, then go back and challenge the appointment process.
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