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Sarbanes-Oxley in Court
By Scott F. Pearce, Esq. | August 25, 2008
Sarbanes-Oxley is the most important federal business regulation law to pass during the Bush administration. Earlier this year, I reported on a case that proves this law is both necessary and effective. An insurance company, AIG, had to take a writedown of almost five billion dollars as a result of auditing and reporting mandated by Sarbanes-Oxley.
A legal challenge to this law is making its way through the courts. The Free Enterprise Fund is fighting the law, and so far the law is winning.
To put it mildly, The Free Enterprise Fund is a fanatic front-group for big business. This group feels the power of the government is righteous only when it protects the strong from the weak. Despite this, their argument against the law is interesting. Basically, the plaintiff contends that Sarbanes-Oxley violates the separation of powers because it gives to the Securities Exchange Commission authority that can’t be taken away from the President.
I advocate the re-regulation of big business. At the same time, I this re-regulation must be done according to the Constitution. Personally, I think the appellate court got it right - but I recognize that the plaintiff’s arguments are not unworthy of careful consideration. It will be interesting to see whether or not the US Supreme Court decides to have a look at the issues presented. My guess is that they will take the case.
As always, I advise you to think about these issues for yourself. Check out the appellate decision, and don’t forget to study the dissent. This is highly technical, but if you’re into it you’ll be rewarded. While you’re at it, have a look at these other reports about the case: 1 2 3 4
Topics: Securities Law |