[Congressional Record (Bound Edition), Volume 149 (2003), Part 8]
[Senate]
[Page 10139]
[From the U.S. Government Publishing Office, www.gpo.gov]




INTERPRETATION OF TITLE IX OF THE SARBANES-OXLEY ACT OF 2002, H.R. 3763

  Mr. BIDEN. Mr. President, on April 11, 2003, I submitted for 
inclusion in the official Record of the Senate a section-by-section 
discussion and analysis of title IX of the Sarbanes-Oxley Act of 2002, 
P.L. 107-204. At the end of that statement, the full text of a letter 
to me from the United States Department of Justice, dated December 26, 
2002, should have appeared. In that letter, Assistant Attorney General 
Daniel J. Bryant confirms my view that the Department may use existing 
criminal provisions to prosecute corporate executives who fail to file 
a certification attesting to the accuracy of a company's financial 
reports, pursuant to Section 906 of the Sarbanes-Oxley Act. 
Unfortunately, the letter was inadvertently excluded from the Record, 
so I now resubmit it and ask unanimous consent that its text be printed 
in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
                                            Department of Justice,


                                Office of Legislative Affairs,

                                Washington, DC, December 26, 2002.
     Hon. Joseph R. Biden, Jr.,
     U.S. Senate,
     Washington, DC.
       Dear Senator Biden: This is in response to your letter of 
     October 16, 2002 to the Attorney General and the Chairman of 
     the Securities and Exchange Commission regarding enforcement 
     of section 906 of the Sarbanes-Oxley Act of 2002 (``the 
     Act''). The Department thanks you for your leadership in 
     corporate governance reform and, in particular, commends your 
     efforts as primary author of section 906 of the Act (18 
     U.S.C. Sec. 1350), which requires corporate executives to 
     make certain certifications with respect to their financial 
     statements.
       The Department is fully committed to using the tools 
     Congress provided in the Act in our continuing efforts to 
     uncover and punish corporate fraud. As the President noted 
     when he signed the Act, ``this law gives my administration 
     new tools for enforcement. We will use them to the fullest.'' 
     In keeping with the President's statement, Attorney General 
     Ashcroft has directed all United States Attorneys and FBI 
     Special-Agents-in-Charge to review the Act and to take all 
     appropriate steps to implement its provisions fully and 
     expeditiously.
       The Department continues to consult with the Commission 
     staff regarding certain legal and technical issues associated 
     with implementing section 906. In particular, questions have 
     arisen regarding the form, location, method of filing and 
     scope of the certification required under section 906. We 
     want to assure you that the Department will continue to work 
     closely with the Commission and we are confident that these 
     questions will be resolved to your satisfaction and with the 
     full input of all affected parties in the near future.
       The Department does believe that it is in a position to 
     respond to one question you raised in your letter. You have 
     inquired whether covered individuals who willfully fail to 
     file the certifications required by 18 U.S.C. Sec. 1350(a) 
     are subject to the penalties provided in 15 U.S.C. Sec. 78ff. 
     While the facts and circumstances determine which tools our 
     prosecutors utilize in each individual case, we believe that 
     section 78ff's criminal penalties are applicable when an 
     individual willfully fails to file the required certification 
     under section 906.
       Section 1350(a) of the Act mandates that each periodic 
     report containing financial statements filed by an issuer 
     with the Securities and Exchange Commission pursuant to 
     Sections 13(a) or 15(d) of the Securities Exchange Act of 
     1934 shall be accompanied by the required written 
     certification. In addition, Section 3(d) of the Act states 
     that: ``a violation by any person of this Act, any rule or 
     regulation of the Commission issued under this Act, or any 
     rule of the Board shall be treated for all purposes in the 
     same manner as a violation of the Securities Exchangee Act of 
     1934 (15 U.S.C. Sec. Sec. 78a et seq.) or the rules and 
     regulations issued thereunder, consistent with the provisions 
     of this Act, and any such person shall be subject to the same 
     penalties, and to the same extent, as for a violation of that 
     Act or such rules and regulations.''
       The criminal provisions of the Securities Exchange Act of 
     1934 (15 U.S.C. Sec. 78ff) state that ``any person who 
     willfully violates any provision of this chapter (other than 
     section 78dd-1), or any rule or regulation thereunder the 
     violation of which is made unlawful or the observance of 
     which is required under the terms of this chapter . . . shall 
     upon conviction be fined not more than $1,000,000, or 
     imprisoned not more than 10 years, or both.'' Therefore, as 
     you have suggested, the Department may utilize section 78ff's 
     criminal penalties to prosecute executives who violate the 
     Sarbanes-Oxley Act by willfully failing to file section 906's 
     required certifications.
       The Department believes that it is critically important to 
     work with the Commission to resolve the remaining issues you 
     have raised in a timely and thoughtful manner, and we are 
     committed to moving forward expeditiously to achieve 
     consensus on those issues. We also will continue, where 
     appropriate, to formulate guidance for our prosecutors and 
     investigators who must enforce the new law and to provide 
     clarity for the corporate community which must comply with 
     it.
       We appreciate your attention to these issues, and look 
     forward to continuing to work with you and others in Congress 
     on the implementation of the Sarbanes-Oxley Act.
           Sincerely,
                                                 Daniel J. Bryant,
     Assistant Attorney General.

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