The (Slightly) Flawed PCAOB

Yesterday, the Supreme Court handed down a provocative 5-4 decision in Free Enterprise Fund v. Public Company Accounting Oversight Bd.  Writing for the majority, Chief Justice Roberts found unconstitutional the vesting of authority in the PCAOB because of the structure's "more than one level of good cause tenure" (i.e., executive power was conferred upon a Board beyond the President's control).

While the opinion simultaneously clarified that the rest of Sarbanes-Oxley remains intact, the decision will undoubtedly shape the consumer protection agency expected to be created this week.  Heck, the opinion's worth a skimming if just for the detailed dissent (Justice Breyer uses charts to list the varied examples of federal officers removable only for cause).  The Free Enterprise Fund decision can be found at http://www.supremecourt.gov/opinions/09pdf/08-861.pdf.

--JSC, 6/29/10