Client Alert: Supreme Court Declares Provisions of Sarbanes-Oxley Act Unconstitutional - Ruling Does Not Change Companies' Obligations Under the Act

Client Alert: Supreme Court Declares Provisions of Sarbanes-Oxley Act Unconstitutional - Ruling Does Not Change Companies' Obligations Under the Act

Jun 28, 2010

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Brownstein Client Alert, June 28, 2010

In a 5-4 decision issued on June 28, 2010 in Free Enterprise Fund v. Public Company Accounting Oversight Board, No 08-861 (June 28, 2010), the U.S. Supreme Court held that provisions of the Sarbanes-Oxley Act of 2002 ("SOX") regulating the removal of members of the Public Company Accounting Oversight Board ("PCAOB") are unconstitutional and, therefore, invalid, but that the remainder of SOX remains in effect. Companies subject to SOX should take note that the Court did not invalidate all of SOX as some commentators had speculated might occur in connection with the resolution of this case.

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