US Court To Review Anti-fraud Law

Congress created the board to replace the accounting industry's own regulators amid the business scandals, giving it subpoena power and the authority to discipline accountants.

"We remain confident that the PCAOB's structure is constitutional and look forward to our opportunity to demonstrate that in the Supreme Court," Colleen Brennan, a spokeswoman for the board, said Monday.

SEC spokesman John Nester said the agency agrees with the appeals court's ruling and believes that "Congress acted properly and within its constitutional authority when it established the accounting oversight board to protect investors."

"We look forward to presenting our arguments to the Supreme Court," he said in an e-mailed statement.

In addition to the oversight board, the 2002 law required greater financial disclosures and increased the criminal penalties for securities fraud. The entire law could be invalidated if any of its sections are found to be unconstitutional. Opponents want it sent back to Congress for a revision.

Business interests, especially smaller public companies, have complained about the costs of complying with a key part of the Sarbanes-Oxley law: the requirement to file reports on the strength of their internal financial controls and fix any problems.