(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.)

Sarbanes-Oxley Rule on Improper Audit Influence Adopted

Pursuant to the Sarbanes-Oxley Act, the SEC adopted rules prohibiting corporate officers or directors from improperly influencing audits. The rules will supplement the provisions currently in Exchange Act Regulation 13B-2 concerning the falsification of books, records and accounts and false or misleading statements or omissions in communications with accountants.

The rules will prohibit officers or directors of an issuer, or persons acting under their direction, from subverting the auditor's responsibilities to investors to conduct a diligent audit of the financial statements and to provide a true report of the auditor's findings. According to the SEC, "the rules, in combination with the existing rules under Regulation 13B-2, are designed to ensure that management makes open and full disclosures to, and has honest discussions with, the auditor of the issuer's financial statements. " The rules are effective June 27, 2003.

¨ Release No. 34-47890 is reported at ¶86,921 .