The Supreme Court today is hearing oral argument in a lawsuit challenging the constitutionality of the Public Company Accounting Oversight Board. Because the Sarbanes-Oxley Act, which created the PCAOB, contains no severance clause, the case creates a possibility that the entire Act may be invalidated.
For my op-ed on the case go here. For the amicus brief I co-signed, go here
SCOTUSblog has links to lots of key documents and backgrounders, and also offers up a podcast debate beween supporters and opponents of the suit. James Freeman uses the occasion to advance an argument that "the costs of this legislation far outweigh its benefits to the investing public." The difficulty I have with this argument is that the benefits of the legislation are so hard to quantify. At the end of the day, however, my educated guess is that Freeman's right. See also:
Update: Bloomberg reports on the oral argument:
Hearing arguments today in Washington, several justices suggested that the Public Company Accounting Oversight Board lacks the presidential oversight required under the Constitution for executive branch agencies.
“As a practical matter, does the president have any ability to control what the board does?” Justice Samuel Alito asked. ...
Justice Anthony Kennedy, potentially the swing vote in the case, questioned whether the SEC is in a position to oversee the PCAOB’s investigations. He said the “history and tradition of boards like this” is that they have independence in their investigations.
FWIW, I tried my hand at Yale Law Professor Ian Ayres' online tool Supreme Court Forecasting (Predict Justice Kennedy's Vote). My inputs predict that Kennedy will vote to overturn the lower court and strike down the PCAOB:
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