The SEC has posted its proposed rules regarding Auditor Independence at http://www.sec.gov/rules/proposed/33-8151.htm and Attorney Responsibility at http://www.sec.gov/rules/proposed/33-8150.htm

Yesterday, the SEC proposed rules on auditor independence – see the press release at http://www.sec.gov/news/press/2002-165.htm.

Rumor has it that the SEC will post its proposing release on attorney responsiblity standards sometime soon – maybe even later today.

Not sure what was changed – but the SEC staff revised the “Sarbanes-Oxley” FAQs on November 14th – see http://www.sec.gov/divisions/corpfin/faqs/soxact2002.htm.

Yesterday, the deadline for many 10-Qs, the SEC’s EDGAR filing system experienced unprecedented delays – and many companies missed the filing deadline. As a result, the SEC’s Office of EDGAR & Information Analysis in the Division of Corporation Finance granted a global date adjustments for these 10-Q filings. This means that the SEC staff will automatically adjust the filing receipt date for all Form 10-Q and 10-QSB filings received on Friday, Nov. 15, 2002 back to Thursday, Nov. 14, 2002. It is understood that the EDGAR system problems have now been corrected and filings are being accepted as usual. See the SEC’s press release at http://www.sec.gov/news/press/2002-164.htm.

For all other filings, the SEC staff likely will decide whether to adjust dates on a case-by-case basis, depending upon the facts as presented by the filer.

Deputy Chief Accountant Jackson Day has been named Acting Chief Accountant at the SEC – see the SEC’s statement regarding this at http://www.sec.gov/news/digest/11-13.txt.

The Public Company Accounting Oversight Board held its 1st meeting behind closed doors – they considered whether the existing accounting profession standards should remain in effect and could not reach an agreement. See http://www.washingtonpost.com/wp-dyn/articles/A51171-2002Nov13.html.

William Webster has resigned as Chair of the new Public Company Accounting Oversight Board. His resignation letter is available at http://www.forbes.com/work/newswire/2002/11/12/rtr792127.html.

Tucked away on the “Division of Corporation Finance” page, the SEC just posted FAQs related to Sarbanes-Oxley at http://www.sec.gov/divisions/corpfin/faqs/soxact2002.htm.

Chairman Pitt lashed out at critics – including former Chairman Levitt – in his first public statements since his resignation – see http://www.washingtonpost.com/wp-dyn/articles/A30296-2002Nov8.html.

In addition, SEC Chief Accountant Bob Herdman resigned – see http://www.washingtonpost.com/wp-dyn/articles/A30556-2002Nov8.html.

The SEC has begun posting no-action and interpretive letters on its web site! They go back as far as early 2002 – and are divided by subject matter, alphabetically, and chronologically. They are at http://www.sec.gov/divisions/corpfin/cf-noaction.htm.

The SEC has posted its proposed rules on pension blackout periods and Regulation BTR at http://www.sec.gov/rules/proposed/34-46778.htm.

General Electric launched a new Corporate Governance web page, its at http://www.ge.com/commitment/governance/press_release/governance_press_release.htm.

Heated discussion with Division Director Alan Beller today at PLI conference in New York. We will posting comprehensive notes soon.

The first 10-Qs to be filed this quarter are getting interesting – look at Intel’s internal controls disclosure in its Form 10-Q…

Despite Chairman Pitt’s resignation last night, the Chair is staying on in transition mode – and presided over this morning’s open meeting. At the open meeting, the SEC proposed rules regarding attorney responsibility standards – and the SEC must adopt rules by January 26th pursuant to Section 307 of the Sarbanes-Oxley Act.

These proposed rules should prove to be quite controversial (as noted in our november ezine in the section regarding the ABA’s Professional Responsibility Task Force hearings). It was noted that the proposing release will be approximately 120 pages long – and that the Office of Economic Analysis didn’t have sufficient time to get a real grasp about the costs of the proposal (such as malpractice insurance rates). Commissioner Goldschmid noted that he generally had reservations about the proposals – but did not specify what are his reservations.

As proposed, Rule 205 would require “up-the-ladder” reporting – and many terms in the proposal are broadly defined. For example, the terms “appearing and practicing before the SEC” and “in the representation of the issuer” are broader than they appear on their face.

The scope of the rule also is quite broad as it would apply to all attorneys – defined as “any person qualified to practice law in any jurisdiction.” This means the rule would apply regardless if a person was formally in the legal department (e.g. someone who received a legal degree but serving as a business development officer would have to comply). The proposed rule would apply to both in-house attorneys and outside counsel. Finally, the rule would apply to non-US attorneys – including lawyers who are not licensed to practice in the US.

Among the other issues likely to be controversial include the “noisy withdrawal” process (whereby a “reporting attorney” reports “out” to the SEC in certain circumstances); the impact on the attorney-client privilege and attorney-client relationships in general; the concept of a “QLCC” (qualified legal compliance committee); and the fact that reporting attorneys would have to report violations that are “about to occur.” I’m sure there are more pricky issues – and they will be identified once the proposing release is available for review. The related press release is at http://www.sec.gov/news/press/2002-158.htm.