[Page S5533]
From the Congressional Record Online through the 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:
U.S. 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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