Lawyers across the world have responded to consultation on the controversial new regulatory powers the Securities and Exchange Commission (SEC) is set to adopt from 26 January. This month’s Global Question highlights some of their concerns.
US firm Dechert says the proposal to require attorneys to report suspected securities fraud to the SEC “directly contradicts the clear intention of Congress”. The firm explains: “In drafting Section 307 of the Sarbanes-Oxley Act of 2002, senators Sarbanes, Edwards and Enzi unequivocally rejected notification to the SEC and they made that clear in their discussion of the section reported in the Congressional Record. We believe that Congress got it right. There is no consensus that reporting to the SEC is either appropriate or wise. Some think it corrosive: it presumes that corporate issuers are entirely corrupt at the highest levels and that the congressional remedy of reporting up the corporate ladder will fail.”
