The Supreme Court Considers the Constitutionality of the Public Company Accounting Oversight Board
The Supreme Court heard oral arguments this past Monday in Free Enterprise Fund v. Public Company Accounting Oversight Board, No. 08-861, in which the Court is expected to address the constitutionality of Congress’s creation of the Public Company Accounting Oversight Board ("PCAOB") through the Sarbanes-Oxley Act of 2002 (the "Act"). The Court will consider whether Congress ran afoul of the Appointments Clause of the Constitution when it granted authority to appoint and remove Board members of the PCAOB to the Securities and Exchange Commission ("SEC") rather than the President. The case is significant in that it directly challenges the structure and oversight of the PCAOB, one of the centerpieces of the Act, which has the authority to oversee and regulate auditors of public companies.