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A legal challenge to the Sarbanes-Oxley Act enshrined Public Companies Accounting Oversight Board has been launched The Free Enterprise Fund is arguing on constitutional grounds.

Alleging that the law has produced costly unintended consequences, the well-intentioned legislation has nonetheless caused headaches for businesses, entrepreneurs and capital markets.

The fund cites a study from the University of Rochester showing the stock value of American companies falling by $1.4 trillion.

Unconstitutional barriers to liquidity, discouraging entrepreneurship and innovation and hindering U.S. competitiveness are all laid at the door of the PCAOB and Sarbanes-Oxley.

"The legal challenge unveiled today shows the PCAOB violates separation of powers principles because the board performs an executive function, yet neither the President nor any entity within the executive branch was given authority to appoint or remove board members," said Michael Carvin, outside legal counsel to Free Enterprise Fund. "In brief, the PCAOB is not accountable to any elected official or the citizens subject to PCAOB regulation."

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University of Rochester

Free Enterprise Fund