WASHINGTON -- The Supreme Court has struck down part of the anti-fraud law enacted in response to Enron and other corporate scandals from the early 2000s.
The justices, in a 5-4 vote Monday, say that the Sarbanes-Oxley law enacted in 2002 violates the Constitution's separation of powers mandate. The court says the president must be able to remove members of a board that was created to tighten oversight of internal corporate controls and outside auditors.
Congress created the board to replace the accounting industry's own regulators amid scandals at Enron Corp., WorldCom Inc., Tyco International Ltd. and other corporations. The board has power to compel documents and testimony from accounting firms, and the authority to discipline accountants.