Last spring, the U.S. Court of Appeals for the Second Circuit issued its first opinion regarding the Sarbanes-Oxley obstruction of justice provision, 18 U.S.C. §1519. In United States v. Gray,1 the Second Circuit sustained the conviction of two employees of a private correctional facility on charges that they engaged in obstruction of justice under the Sarbanes-Oxley obstructive provision. Although the opinion arises from an unusual factual setting, as the Second Circuit’s first word on this broad statute, it is potentially important to all white-collar practitioners, as well as to anyone counseling a business regulated by the federal government.
The Gray decision is noteworthy because the court sustained the conviction despite the absence of evidence of a “nexus” between the obstructive conduct and any official proceeding. According to the court, the plain meaning of the statute’s text belies such a requirement because it does not require the existence of a pending or imminent government proceeding as an element of the crime. Id. at *5. Additionally, the court read the statute’s legislative history to demonstrate Congress’ explicit rejection of a nexus requirement. Id. at *6. In a footnote, however, the court professed to “express no view” on applications of §1519 “outside the unique circumstances” of the case before it. Id. at *7 n.6.
