NU Online News Service
The Supreme Court, in a divided ruling on Monday, said part of the Sarbanes-Oxley Act of 2002 is "incompatible" with the Constitution.
The majority opinion written by Chief Justice John Roberts found that the Public Company Accounting Oversight Board (PCAOB), created as part of the act, violated separation of powers principles in the Constitution. The act makes it so the president "is no longer the judge of the board's conduct," Justice Roberts wrote, and therefore it is too difficult for the president to remove board members, who are appointed by the U.S. Securities and Exchange Commission.
"[The president] can neither ensure that the laws are faithfully executed, nor be held responsible for a board member's breach of faith," Roberts wrote for the 5-4 majority. "Such diffusion of power carries with it a diffusion of accountability; without a clear and effective chain of command, the public cannot determine where the blame for a pernicious measure should fall."
Recommended For You
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
