Last month, the Free Enterprise Fund encountered an obstacle in its quest to have the Sarbanes-Oxley Act of 2002 declared unconstitutional: The U.S. District Court for the District of Columbia entered summary judgment in favor of its opponent, the Public Company Accounting Oversight Board.
Nonetheless, the organization will not quit. In fact, in a recent IT Business Edge interview, FEF Chairman Mallory Factor said the group expected such a result from the beginning. The next step, he says, is to take the case to the appellate level -- and probably all the way to the U.S. Supreme Court.
And if the effort in the courts is not successful, Factor says, other high-profile figures are beginning to feel the effects of the bad law and make their voices heard. (Bloomberg or Schumer ring a bell?) The cause certainly won't die, he seems to say.
A bill making its way through Congress right now will also keep the issue alive. According to a release published today on Business Wire, the COMPETE Act is a bipartisan bill that revamps Sarbanes-Oxley section 404. In its third iteration, the Competitive and Open Markets that Protect and Enhance the Treatment of Entrepreneurs Act would require Securities and Exchange Commission definitions to be concise and clear -- to prevent audit redundancy -- and ensure that focus remains on controls that create a "material risk" to the business.