(The news featured below is a selection from the news covered in the Federal Securities Report Letter, which is distributed to subscribers of the Federal Securities Law Reports.)

New Rules Prohibit Improper Influence on Auditors

The SEC adopted rule amendments to implement Section 303 of the Sarbanes-Oxley Act. The new rules prohibit officers and directors of an issuer, and persons acting under the direction of an officer or director, from coercing, manipulating, misleading or fraudulently influencing the auditor of the issuer's financial statements if that person knew or should have known that such action could render the financial statements materially misleading. These amendments will be effective 30 days after publication in the Federal Register .

¨ The adopting release will be published in a forthcoming REPORT.