The Supreme Court Essay
The Supreme Court
The Supreme Court made a ruling in Free Enterprise Fund vs. PCAOB saying that Sarbanes-Oxley (SOX) will remain “fully operative as law” with the exception that The Securities and Exchange Commission will be able to remove at will members of the Public Company Accounting Oversight Board. Previously they were not able to and was said to violate the appointment clause of the constitution. This changed job security for its five board members ending a three-year battle between a Nevada firm Beckstead and Watts who sued PCAOB in 2006. The accounting firm declared that it was unconstitutional for SEC to appoint its board members rather than the president giving it to much authority unchecks by executives. However, a decision been made by the courts to meet the plaintiffs at the halfway, pointed out that if was against constitutional policy to remove board members completely it would violate separation of powers principle. The courts rest the power with the president to have complete authority to hire and fire PCAOB members.
According to Susan Hackett general counsel, this was an important move because it invalidated the PCAOB appointment process and upheld the SOX Legislation. A power move to allow congress and the president to have ultimate ability to control institutions that possess significant insight of companies. This decision in my opinion opens up a fair market and does not allow larger company to push and over power smaller firms. Board members must go through a screening process so not to have bias authorizes in control.
Jaeger, J. (June 28, 2010). High Court Ruling only Tweaks Sarbanes Oxley Act. Enforcement and Litigation, 13. Retrieved from http://www.complianceweek.com