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Volume X, Number 340

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Supreme Court Limits Scope of SOX Anti-Shredding Provision

The US Supreme Court recently reversed the conviction of a commercial fisherman, John L. Yates, accused of violating 18 U.S.C. § 1519, also known as the anti-shredding provision of the Sarbanes-Oxley Act (SOX), holding that the term “tangible object” was limited to objects used to store information.

Yates, the appellant-defendant, was convicted of ordering his crew to toss undersized fish back into the sea to avoid detection by federal authorities that he had violated federal conservation regulations. He was charged and convicted under 18 U.S.C. § 1519, which states, “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 … of any department or agency of the United States” shall be fined, imprisoned or both. Yates moved for a judgment of acquittal, arguing that SOX’s reference to a “tangible object” referred to objects used to store information, not fish. The District Court denied Yates’ motion, following the US Court of Appeals for the Eleventh Circuit precedent that a “tangible object” under § 1519 need not be related to a “record” or “document.”

The Supreme Court reversed Yates’s conviction, holding that the term “tangible object” in 18 U.S.C. § 1519 “must be one used to record or preserve information” and that the fish tossed overboard did not fall into that category. The plurality stated that dictionary definitions are not “dispositive” of the meaning of “tangible object” and emphasized that, as part of SOX, the provision was passed to combat financial fraud, not to prohibit the destruction of any type of evidence.

Yates v. United States, No. 13-7451, 574 U.S. ___ (2015).

©2020 Katten Muchin Rosenman LLPNational Law Review, Volume V, Number 65
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About this Author

Michael Rosensaft, white collar criminal litigator, Katten, New York Law Firm
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Michael M. Rosensaft focuses his litigation practice on representing individuals and businesses in white collar criminal matters, regulatory enforcement matters, corporate internal investigations, insurance and health care fraud and complex civil litigation.

Prior to joining Katten, he served as an Assistant US Attorney for the Southern District of New York. In that capacity, Michael oversaw the investigation and prosecution of numerous criminal cases involving terrorism, international money laundering, export violations, bribery of foreign...

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