Friday, March 23, 2007

Sun Rises in East; Federal Judge OKs Constitutionality of PCAOB and SOX

In a completely unsurprising verdict, U.S. District Judge James Robertson dismissed a lawsuit challenging the constitutionality of Sarbanes-Oxley and the Public Companies Accounting Oversight Board. The challenge, brought by the Free Enterprise Fund and a small Las Vegas area accounting firm (Beckstead and Watts), charged that the President should appoint the members of the committee. Robertson disagreed, writing that the plantiffs had no standing and that the consent of the SEC chairman would have been seen as the equivalent of Presidential appointment anyway. The PCAOB applauded the verdict while the plantiffs were considering an appeal.

Given the history of constitutional challenges to the federal income tax, some of which might hold water with a hyperliteral reading, there could only have been one result expected. An appeal of this ruling would be sending good money after bad.


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