High Court to Decide if SOX Board Is Illegal ‘Fifth Branch’ of Government
The U.S. Supreme Court has agreed to decide whether an oversight board created by the Sarbanes-Oxley corporate oversight law is an unconstitutional “fifth branch” of government.
At issue is whether the Public Company Accounting Oversight Board violates separation of powers principles and the appointments clause, SCOTUSblog reports. The petition for certiorari (PDF) maintains board members are vested with far-reaching power while the president is stripped of authority to appoint or remove them.
The Securities and Exchange Commission appoints and has the authority to remove members of the board, which oversees accounting firms that audit public companies.
The case is Free Enterprise Fund v. Public Company Accounting Oversight Board. Lawyers on the petition for certiorari include former solicitor general Kenneth Starr and Viet Dinh, a former Justice Department official in the Office of Legal Counsel.
The cert petition maintains the case is the most important separation-of-powers conflict regarding presidential appointment powers to reach the Supreme Court in the last 20 years.
“In creating the board, Congress deliberately sought to test the outer boundaries of its ability to reduce presidential power, by establishing a ‘fifth branch’ of the federal government’ … over which the president has markedly less control than he exercises over traditional ‘fourth branch’ independent agencies like the SEC,” the cert petition says.