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The reach of Sarbanes-Oxley: no-one's safe
Filed in archive SOX by leon on March 8, 2007
The reach of Sarbanes-Oxley: no-one's safe
In early 2006, I did a blog entry looking at how Sarbanes-Oxley may have figured in the Plamegate affair.

Simply put, the Act's broad definition of obstructing justice by destroying or concealing documents related to "the jurisdiction of any department or agency of the United States" means that no private document is safe.

Now we have more evidence that Sarbanes-Oxley has a disturbing reach that goes beyond what was originally expected.

As we know, the law was brought in to stop fraud and to protect investors. One of its provisions targets accountants and lawyers destroying incriminating evidence a la Andersen.

But once again, the law of unintended consequences strikes. Now it's being used in the arrest of an attorney on charges of destroying evidence in a child pornography investigation.

The attorney, Philip Russell has been charged with destroying a computer that contained the porn at Christ Church in Greenwich, Connecticut. He has been accused of obstructing an FBI investigation that led to the January conviction of the church's music director, Robert Tate, for possessing the material and he has been charged under the Sarbanes-Oxley Act.

Lawyers are worried. They say this is a landmark case because if Russell is convicted, it would set a precedent that would leave them vulnerable to arrest if they were to dispose of material whose possession could subject their clients to prosecutions. It would also raise potential conflicts of interest between the attorney and the client, particularly if it involves material subject to an investigation they are not aware of.

Mark DuBois, chief disciplinary counsel for the Connecticut Bar Association has told the Stamford Advocate that it puts attorneys in an impossible position:

"The question is what's evidence and when does something become evidence? How prescient does a lawyer need to be? Now if you guess wrong you've got big problems, because it is a serious crime."

True, lawyers should not destroy evidence. But as Jon Schoenhorn, president of the Connecticut Criminal Defense Lawyers Association told the Insurance Journal, it begs the question: what is evidence?

The issue was first raised by Norm Pattis in his Crime & Federalism blog.

And the questions the case raises go deep. "I don't have answers to these questions." Pattis writes. "I merely alert the bar. Be careful. The feds are flexing their muscles and feeding on us.

"Once again, the law of unintended consequences results in overcriminalization: A law designed to prevent accountants and lawyers from shredding forms has become a tool in child pornography prosecutions. No one will care much about that. But what happens tonight if you find cocaine in your child's bedroom?"



Permalink: The reach of Sarbanes-Oxley: no-one's safe
Tags: SarbanesOxley  child  porn  Philip  Russell  oxley  sarbanes  sarbanes+oxley  reach+sarbanes  oxley+safe 
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