The Supreme Court has struck down part of the anti-fraud Sarbanes-Oxley law enacted in response to Enron and other corporate scandals from the early 2000s. The justices, in a 5-4 vote today, say that Sarbanes-Oxley 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.
Chief Justice John Roberts, writing for the court, said that Sarbanes-Oxley law will remain in effect, with one change. The Public Company Accounting Oversight Board will continue as before, but the Securities and Exchange Commission now will be able to remove board members at will. That change, Roberts said, cures the constitutional problem.