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SEC Orders CEO/CFO Certifications

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  • Baker, John
    The Securities and Exchange Commission on Thursday ordered the chief executive officers and chief financial officers of 945 large public companies to
    Message 1 of 1 , Jul 1, 2002
      The Securities and Exchange Commission on Thursday ordered the chief executive officers and chief financial officers of 945 large public companies to personally certify - in writing, under oath, and for publication - as to the accuracy and completeness of the companies' reports. The order applies to public companies with revenues during their last fiscal year of greater than $1.2 billion. The sworn statements must be delivered to the SEC, in hard copy and not via EDGAR, by the close of business on the first date that a Form 10-K or Form 10-Q is required to be filed with the SEC on or after August 14, 2002.

      The CEOs and CFOs will be required to swear that, based upon a review of the company's reports and except as corrected or supplemented in a subsequent report, neither the company's most recent Form 10-K, nor any subsequent Form 10-Q, Form 10-K, or definitive proxy materials, contained an untrue statement of a material fact or omitted to state a material fact necessary to make the statements in the report, in light of the circumstances under which they were made, not misleading. Alternatively, the CEOs and CFO must file a statement, under oath, describing the facts and circumstances that would make such a statement incorrect. In either case, the sworn statement must also declare whether or not the contents of the statement have been reviewed with the company's audit committee, or in the absence of an audit committee, the independent directors. Each officer must provide a separate written statement.

      Notably, the SEC is requiring these sworn statements even as a similar but broader rule proposal is pending. It is relying upon section 21(a) of the Securities Exchange Act of 1934, which authorizes the SEC generally to conduct investigations and to require any person to file a statement as to all the facts and circumstances concerning the matter to be investigated. The pending rule proposal also would require a company to maintain procedures to provide reasonable assurance that the company is able to collect, process and disclose the information required in the company's periodic and current reports. While that requirement is not part of the SEC order, CEOs and CFOs undoubtedly will want to establish the best procedures possible to back up their certifications in the relatively brief time before they are due.

      The SEC press release, with links to the order and additional information, is at


      For my post on the pending rule proposal, see


      John M. Baker <JMB@...>
      Stradley, Ronon, Stevens & Young, LLP Http://www.stradley.com
      1220 19th Street, N.W., Suite 700, Washington, DC 20036
      (202) 419-8413 Fax (202) 822-0140
      FundLaw Listowner Http://groups.yahoo.com/group/fundlaw
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