Foley & Lardner
March 20, 2003
Via E-mail - email@example.com
Securities and Exchange Commission
Re: File No. S7-45-02
Ladies and Gentlemen:
I am a partner at the Washington, D.C. office of Foley & Lardner. My practice consists largely of representing public companies and officers of public companies in connection with SEC investigations and/or internal investigations. I submit these comments on my own behalf, and not on behalf of any specific client(s).
I was recently talking about the proposed rule and a question arose that I thought you should consider. If an attorney is retained by an audit committee and becomes aware of evidence of a material violation while providing advice to the audit committee about disclosures to be made in reports that the company will file by the Commission, must the attorney first report the evidence to the CLO (assuming no QLCC). Although it would seem like the attorney should be able to report the evidence directly to the audit committee, it is not clear that the rule permits this unless the attorney concludes that it would be futile to report to the CLO.
I should also mention that the Commission needs to adopt the final rule soon. Companies and law firms need to be training attorneys and setting up compliance systems, but do not know what the rules will be on August 5.