SOX Center

A bipartisan bill in Congress that would ease Sarbanes-Oxley reporting demands on small businesses is a welcome move, according to William H. Venema, a corporate attorney at Epstein Becker Green Wickliff & Hall, P.C.

The odds of the bill passing are good, since this is the bill’s third incarnation in Congress in three years.

“The cost of complying with Sarbanes-Oxley has caused many companies to abandon plans to go public or to list on overseas exchanges, both of which are dangerous trends,” said Venema. “When Congress feels the political heat of an issue, it often responds in a way that can best be described as an overreaction. When the heat cools down, it is often a good idea to take a second look at the laws that were passed. The new bill is a realization that SOX went too far and stifled small business under reporting requirements.”

Morningstar: Bipartisan COMPETE Act is an Overdue Reform of Sarbanes-Oxley, Says Epstein Becker Green Wickliff & Hall Attorney

A lobbyist for big business last week vowed to continue challenging the constitutionality of a 2002 anti-fraud law after a federal judge dismissed a lawsuit the group brought against the independent board Congress created to oversee the accounting industry.

The Free Enterprise Fund, which filed the suit in February 2006, argued that the Public Company Accounting Oversight Board violates the Constitution’s mandated separation of powers among the three federal branches because its five members are not appointed by the president, cannot be removed by him and Congress does not control the board’s budget.

delawareonline: Lobbyist pledges to fight Sarbanes-Oxley

Judge Dismisses Lawsuit Challenging Constitutionality of Accounting Oversight Board

A lobbyist for big business on Wednesday vowed to continue challenging the constitutionality of a 2002 anti-fraud law after a federal judge dismissed a lawsuit the group brought against the independent board Congress created to oversee the accounting industry.

The Free Enterprise Fund, which filed the suit in February 2006, argued that the Public Company Accounting Oversight Board violates the Constitution’s mandated separation of powers among the three federal branches because its five members are not appointed by the president, cannot be removed by him and Congress does not control the board’s budget.

But U.S. District Court Judge James Robertson wrote in a 14-page opinion that granted summary judgment in favor of the board that “the plaintiffs have brought a facial challenge to the PCAOB, presenting nothing but an hypothetical scenario of an overzealous or rogue PCAOB investigator.”

Yahoo.com: Judge Dismisses Sarbanes-Oxley Lawsuit

Yesterday, Marie Leone’s blog took the U.S. Senate to task for walking out on their cafeteria bills, drawing a neat analogy to Bluto, John Belushi’s cafeteria-plundering character in Animal House. (A free CFO.com travel mug goes to the first poster who can tell us why else Marie’s analogy was so apt).

But Sarah Johnson’s story about The Sarbox Hot Potato today has Congress walking out on a bill — or, in this case, a law — in an entirely different sense. Faced with a powerful and well-organized backlash against Sarbanes-Oxley, congressmen are leaping onto the bandwagon to criticize their own law, while at the same time shunting most of the blame, not to mention the responsibility for the fix, onto the SEC.

CFO.com: Blowing in the Wind

Senator Chuck Schumer (D-N.Y.) said his first strategy in reform of the Sarbanes-Oxley law will be to “do it administratively” without an act of Congress. Schumer, who laid out no timetable for changes to the law, said both Christopher Cox, chairman of the Securities and Exchange Commission, and U.S. Treasury Secretary Hank Paulson have seen copies of a McKinsey study on sustaining New York’s and the U.S.’s financial services leadership and support it. Schumer said the White House also appears to be supportive of the effort to make compliance of landmark Sarbanes-Oxley rules less costly for small companies, if an act of Congress and a presidential OK are needed to implement changes.

Marketwatch: Schumer to push for administrative changes of SOX law