SEC Issues Unprecedented "Order" for Principal Executive and Financial Officers

In response to the continuing revelations of accounting and disclosure irregularities at some of America’s largest public companies, on June 27, 2002 the SEC took the unprecedented step of “ordering” the principal executive officers and principal financial officers of the largest public companies to provide written statements, under oath, regarding the accuracy and completeness of their company’s most recent Form 10-K and all reports and definitive proxy statements filed with the SEC subsequent to the filing of the Form 10-K. On June 28, 2002, the SEC corrected the form of the sworn statement attached as an exhibit to the order, listed the 947 companies whose principal executive officers and principal financial officers are the subject of the order, and answered “Frequently Asked Questions” about the order.

The sworn statement, which the principal executive officers and principal financial officers must submit in writing to the SEC on the first date by which a Form 10-K or Form 10-Q is “required” to be filed on or after August 14, 2002, also must state whether or not the contents of the statement have been reviewed with the company’s audit committee. In its answers to “Frequently Asked Questions,” the SEC confirmed that an extension of the due date for filing a report pursuant to Rule 12b-25 would also have the effect of extending the deadline for compliance with the order.

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