No, not the White or Red Sox, but what we in my line of work refer to as "SOX"--the Sarbanes-Oxley Act.
This was a huge and somewhat hastily-passed piece of legislation to deal with the Enron, WorldCom, etc. scandals (ah, it was such a simpler time when companies merely engaged in "creative accounting" rather than turning Wall Street into a giant financial casino.) Well, today, the U.S. Supreme Court agreed to hear (in legalese, granted a petition for certiorari) a challenge to a key part of that act, the establishment and empowering of the Public Company Accounting Oversight Board.
The legal points are somewhat obtuse, dealing with the constitutional "appointments clause." But let's be serious for a moment. The groups funding this (headed by our old pal Ken Starr) don't give a damn about accounting regulation and oversight. They want to overturn the entire Sarbanes-Oxley Act, with its corporate accountability provisions.
Granting cert means that 4 justices wanted to hear it (hmmm, Roberts, Alito, Thomas and Scalia?). SO the fate of financial regulation in America rests on--Mr. Swing Vote, Justice Kennedy.
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2 comments:
Sarbanes-Oxley is a nightmare and adds a huge expense to US publicly held companies.
That said, in some form it's necessary. Unfortunately SOX was unable to prevent the corruption and idiocy behind our current banking fiasco. If SOX needs to change it needs more compliance/disclosure and bigger teeth on the criminal side.
Since SOX contains no severability provision if the current challenge goes against PCAOB the entire law will be unconstitutional. That means congress will have to revamp the appointment issues and can fix items the republican congress did poorly.
Odd that Star and his band of desperadoes would give the dems that opportunity. Perhaps they are just trying to get a few friends off the hook without regard to future impact.
INN, it won't all necessarily fall if the PCAOB provisions are stricken down. There is significant precedent for courts to read legislative intent and save the non-violative parts. With this court, however...
It is remarkable how so much of the SOX costs flow from Section 404 on internal control, which sounds so innocuous when you read it.
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