Let’s get this straight. As Legal Director goes to press this month a number of the top City firms are set to question officials at the US Securities and Exchange Commission (SEC) on the ambit of its powers under the controversial Sarbanes-Oxley Act.
The Act, which was rushed through Congress in the wake of Enron, hands the SEC the power to draw up “minimum standards of professional conduct” for lawyers appearing or practising before the SEC in the representation of companies with a US listing. The Act states that the professional standards must include – but are not necessarily limited to – a rule requiring lawyers to report evidence of any breach of security law, fiduciary duty or similar violation to the chief legal officer or CEO and, if they do not respond appropriately, to the independent audit committee or other board.
