Constitutional challenge to Sarbanes-Oxley

A conservative group has filed a federal suit against the Public Company Accounting Oversight Board, in an action that could invalidate the Sarbanes-Oxley Act.

Although most previous complaints about Sarbox have focused on Section 404, which many companies feel requires excessive reporting, this suit is based on separation of powers:

They are arguing that the makeup of the accounting board violates the separation of powers doctrine because its members aren't appointed by the president and cannot be removed by him, and Congress cannot control its budget. The chairman of the oversight board and the other four directors are appointed by the Securities and Exchange Commission, an independent federal agency; the accounting board is funded by fees on publicly traded companies according to their size.

Sarbox has been described as the Consultants' Full-Employment Act, so naturally I'd hate to see it go, but whether this suit has validity or not is way beyond me.

Update: Here's an article in BusinessWeek that summarizes the suit. It appears to be a reasonably close call, turning on whether the PCAOB board positions are or are not "high-level" positions. It also looks like the purpose of the suit may be to pressure Congress into revising Sarbox.

But the larger goal of the lawsuit, Factor says, is to force Congress to reopen Sarbanes-Oxley, the corporate reform act that created the board. "The lawsuit puts a gun to [Congress'] head and says 'you've got to deal with it,'" Factor says.