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SOX Fishing Case Heads to Supreme Court – Glass & Goldberg | Financing, Property & Bankruptcy Law
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SOX Fishing Case Heads to Supreme Court

fishing netThe case of a Florida fisherman who was prosecuted under the Sarbanes-Oxley Act (“SOX”) for jettisoning his undersized catch is headed to the U.S. Supreme Court, according to a news report.

The case — United States v. Yates, 733 F.3d 1059 (11th Cir. 2013) [2013 BL 214765] — is on appeal to the high court from the Eleventh Circuit, which affirmed the earlier convictions of commercial fisherman John Yates for violations of 18 U.S.C. §§ 1519 and 2232(a). These violations arose out of Yates’ harvesting of undersized red grouper in the Gulf of Mexico. When field officers from the Florida Fish and Wildlife Conservation Commission boarded Yates’ boat to inspect the size of his catch, they found at least 72 fish that were under the 20-inch keeper limit. Officers instructed Yates to box the fish and turn them over to officials when he reached port.

According to crewmember testimony, Yates instructed his crew to throw the undersized grouper overboard and replace them in the crates with larger fish. This led to a charge against Yates under the Sarbanes-Oxley Act, specifically 18 U.S.C. § 1519 that makes it a crime to destroy “any record, document or tangible object” and is punishable by up to 20 years in prison. The government asserted that the fish were a “tangible object ” within the meaning of section 1519, and the Eleventh Circuit Court agreed.

On July 7, 2014, the Washington Legal Foundation, a pro-business public interest law firm and policy center, filed an amicus brief on behalf of Yates, stating, “The Eleventh Circuit’s overreaching interpretation of the Sarbanes-Oxley Act’s ‘antishredding’ provision would radically transform the law into a trap for the unwary.”

The WLF also expressed concern that a broad interpretation of “tangible object” by the high court could raise compliance difficulties for companies.

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