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An indictment was recently unsealed where the United States recently brought criminal charges, for among other things, false certifications under Section 302 and 906 of the Sarbanes-Oxley Act.  The allegations are of course horrendously egregious, and thankfully not the result of making fine judgments the U.S. Attorney thought were a little bit on the wrong side of the line.

For instance, the indictment alleges an individual knowingly filed a false report — the allegedly false report apparently had a falsified Section 305 and Section 906 certification that was not signed by the individual indicated and the purported signer was not acting as acting  CFO (see paragraph 45), and later the accused allegedly actually executed a false Section 906 certification and the SEC report did not reveal the fraud the accused signer was allegedly perpetrating (see paragraph 48).

Students of Sarbanes-Oxley may point out that the Section 302 certification is not actually part of the criminal code — so why criminal charges?  The U.S. apparently takes the position that knowingly filing a report with a false certification violates Section 807 of Sarbanes-Oxley, a criminal statute.

Why were Section 906 charges brought for only some of the allegedly false Section 906 certifications and not all?  Maybe one reason is the wrong-doer has to actually sign the false Section 906 certification for a Section 906 charge, as opposed to allegedly causing a report to be filed where someone else’s signature was fraudulently placed on the certification, which only merits a Section 807 charge.  And perhaps with respect to the 10-K referred to in paragraph 59, the faulty 302 certification is based on not disclosing fraud to the auditors which is contrary to Section 302, but not on its face contrary to Section 906.


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