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Supreme Court Weighs Validity of Anti-Fraud Law

The Supreme Court has raised doubts about the validity of part of the anti-fraud law enacted in response to Enron and other corporate scandals early this decade.

The court heard arguments Monday in a case over the composition of the board that was created to tighten oversight of internal controls and outside auditors following accounting scandals at Enron, WorldCom, Tyco International and other corporations.

A small Nevada accounting firm and an anti-tax group brought the challenge to the 2002 Sarbanes-Oxley law, arguing that the board created by the law violates the Constitution's separation of powers mandate because the president cannot appoint or remove its members.

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