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Nov 15, 2015 by |

California Securities Fraud Attorneys and the Sarbanes-Oxley Act


History of the Sarbanes-Oxley Act

The Sarbanes-Oxley Act was created to punish the companies who attempt to compromise records in Federal investigation, especially in bankruptcy or fiscal issues. This rule was codified by the 18 U.S. Code § 1519: “Whoever knowingly alters, destroys, mutilates, conceals, covers up, falsifies, or makes a false entry in any record, document, or tangible object with the intent to impede, obstruct, or influence the investigation or proper administration of any matter within the jurisdiction of any department or agency of the United States or any case filed under title 11, or in relation to or contemplation of any such matter or case, shall be fined under this title, imprisoned not more than 20 years, or both..”
But the federal judges have not restricted the application to purely financial fields. Actually they use this rule regardless of the area concerned. The first case should be at the trial of Boston Bombers’ best friends. Because the best friends destroyed video tapes and pictures of them with the bomber, the Feds pursued them and used the 18 U.S. Code § 1519. Maybe the federal judge was encouraging the use of this rule in order to be uncompromising with cases involving terrorism.

California Securities Fraud Attorneys Explain Why it’s Relevant

But with the trial of Yates v. U.S in February 2015, the federal judge has extended the impact of this rule for all Federal investigations. In this case, fishermen had not complied with a federal rule prohibiting fishing fish below a certain size threshold. Because they tossed the little fish in the sea, they were convicted to have hidden “tangible objects” in a Federal investigation. Yates was sentenced to thirty days imprisonment.
To use the 18 U.S. Code § 1519 there are 3 elements to fulfill:
– Intent to impede: the intent can result with burglary or assault, but the Federals more often use the denunciation. Also, the intent is really difficult to prove.
– A federal investigation: federal investigators have to be involved, even in civil case and even if it is anticipating a probable investigation, it is sufficient to be in prosecution.
– Compromise records, documents, data or tangible object: it is a wide area, because everything could be concerned, even fish, as we learned with the Yates’s case.
Evans Law Firm and other California securities fraud lawyers can help if you find yourself involved in such a situation. Evans Law firm handles banking, insurance and securities fraud, consumer rights, qui tam and whistleblower cases, as well as elder financial abuse cases involving annuities, life insurance, and other issues. Contact the Evans Law Firm at (415) 441-8669 or by email at

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