Developments in Securities Regulation, Corporate Governance, Capital Markets, M&A and Other Topics of Interest. MORE

We previously reported on a U.S. Supreme Court case which interpreted the evidence destruction provisions of Sarbanes-Oxley.  A plurality of the Court held in Yates that destruction of fish was not destruction of a tangible object and therefore did not violate the Sarbanes-Oxley Act.  In that case the Supreme Court concluded that the reference to “tangible objects” in the Sarbanes-Oxley Act should be read to cover only objects one can use to record or preserve information, not all objects in the physical world.

At that time I wondered what the next case would look like . . .

In United States v. Carroll, the owner of a 1996 Saab was shot to death during a drug transaction in Humboldt County, California. In the indictment, the government alleged that after the murder was committed, the accused drove the 1996 Saab to a remote area and set it on fire. The accused were charged with knowing destruction of a “tangible object” -i.e. the Saab – with the intent to obstruct a federal investigation, in violation of a provision of the Sarbanes-Oxley Act, as codified in Title 18, United States Code, Section 1519.

The United States District Court for the Northern District of California held it was “common sense” that a Saab is not a tangible object.  The District Court noted the Yates plurality reasoned that a “tangible object” must be an object that is capable of being falsified or bearing a false entry.  This District Court found this reasoning applies with equal force to an automobile. In short, it would be just as unnatural to describe a torched sedan as falsified.


Stinson Leonard Street LLP provides sophisticated transactional and litigation legal services to clients ranging from individuals and privately held enterprises to national and international public companies. As one of the 100 largest firms in the U.S., Stinson Leonard Street has offices in 14 cities, including Minneapolis, Mankato and St. Cloud, Minn.; Kansas City, St. Louis and Jefferson City, Mo.; Phoenix, Ariz.; Denver, Colo.; Washington, D.C.; Decatur, Ill.; Wichita and Overland Park, Kan.; Omaha, Neb.; and Bismarck, N.D.

The views expressed herein are the views of the blogger and not those of Stinson Leonard Street or any client.