VeraSage

Sarbanes-Oxley Needs to Go!

Ron Baker - 04/07/2006

On February 8, 2006, The Free Enterprise Fund and the Competitive Enterprise Institute (http://www.cei.org) launched a Constitutional legal challenge to the Public Accounting Oversight Board (PCAOB) created by Congress as part of the Sarbanes-Oxley Act of 2002 (SOX).

A recent University of Rochester study concluded that the total effect of SOX has reduced the stock value of American companies by a staggering $1.4 trillion dollars. The regulatory burden of this legislation absolutely outweighs its benefits.

PCAOB is unconstitutional for a variety of reasons. It violates the appointments clause (Article II Section 2) of the U.S. Constitution. It grants significant regulatory powers and the power to tax companies to fund its activities. This violates the separation of powers.