Supreme Court Strikes Down Part of Sarbanes-Oxley
dealbook.blogs.nytimes.com
dealbook.blogs.nytimes.com
There's a reason why free software is better than the stuff developed at big companies -- the government doesn't tell them what tools they can and cannot use.
I'm surprised we don't have to record our in-person chats with a wearable video camera.
Basically, it is the same story as almost all enterprise software: abandon all hope ye who enter here.
This seems to be the most relevant portion of the decision (viewable in full here: http://www.scribd.com/doc/33661051/Supreme-Court-Ruling-on-S...). From pages 28-29, with citations removed for readability:
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"We reject such a broad holding. Instead, we agree with the Government that the unconstitutional tenure provisions are severable from the remain der of the statute. “Generally speaking, when confronting a constitutional flaw in a statute, we try to limit the solution to the problem,” severing any “problematic portions while leaving the remainder intact.”
"Because “[t]he unconstitutionality of a part of an Act does not necessarily defeat or affect the validity of its remaining provisions,” ... the “normal rule” is “that partial, rather than facial, invalidation is the required course”.
Under the traditional default rule, removal is incident to the power of appointment. Concluding that the removal restrictions are invalid leaves the Board removable by the Commission at will, and leaves the President separated from Board members by only a single level of good-cause tenure. The Commission is then fully responsible for the Board’s actions, which are no less subject than the Commission’s own functions to Presidential oversight.
The Sarbanes-Oxley Act remains “‘fully operative as a law’” with these tenure restrictions excised. We therefore must sustain its remaining provisions “[u]nless it is evident that the Legislature would not have enacted those provisions independently of that which is [invalid].” Ibid.
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In short, it's a pretty inconsequential ruling relative to the meat of the law.
As with another sibling comment, you've got it exactly backwards. The Court struck down a clause that limited the ability of the President/SEC to remove members. The President now has greater discretion, not less.
The ruling leaves it to Congress to re-establish the panel with tighter oversight, potentially setting up a new legislative fight that might sweep in other aspects of Sarbanes-Oxley.
via http://www.businessweek.com/news/2010-06-28/sarbanes-oxley-a...
Note, however, that the original source seems to have been "corrected": http://www.bloomberg.com/news/2010-06-28/sarbanes-oxley-audi...
edit: changed "President/SEC" to "President's chosen SEC"; it does not appear they said the President has direct discretionary power to remove board members, even though the SEC's power was described in terms of executive/presidential powers.
tl;dr: The SEC no longer requires good cause to remove oversight board members any more, and the President's power is essentially unchanged.
As the law was prior to this decision, the SEC had to have good cause to remove someone from the Public Company Accounting Oversight Board. The ruling was that requiring two levels of good cause between the President and the oversight board was unconstitutional, and now the SEC is able to remove oversight board members directly without requiring good cause. The logic is that this provides sufficient insulation from Presidential control, because the President still requires good cause to remove the SEC people who can remove oversight board members.
tl;dr: The SEC no longer requires good cause to remove oversight board members any more, and the President's power is essentially unchanged.
In other words, it's now easier for those board members to be removed, as the SEC can just remove them at will.
I haven't read the actual text of the ruling; is the article inconsistent with it?