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Kudlow’s Money Politics

Larry Kudlow’s daily web log of matters political and financial.

Unconstitutional?



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Kudos to Ken Starr for his smart op-ed in this weekend’s Wall Street Journal. Not only is Sarbox costing U.S. businesses untold billions of dollars, Mr. Starr argues the whole thing is unconstitutional:

The Sarbanes-Oxley Act powerfully illustrates the law of unintended consequences. Due to hasty drafting by Congress in the wake of the Enron and WorldCom scandals, Sarbox has cost the U.S. economy over $1 trillion, according to one study published by the AEI-Brookings Center. To add insult to grievous injury, it is unconstitutional.

That last point will be argued next Thursday before Judge James Robertson of the district court for the District of Columbia. The plaintiffs in Free Enterprise Fund v. Public Company Accounting Oversight Board — a free-market advocacy organization based in Washington, D.C., and a Nevada accounting firm, Beckstead and Watts, that audits smaller public companies — challenge the method by which the members of the all-powerful Public Company Accounting Oversight Board (PCAOB) are appointed; the Board’s ability to perform executive branch functions such as regulation of public company activities in the securities markets; and the delegation of legislative powers to an independent organization…


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