October 9, 2014 — Can a fish fit into a shredder? That’s one of the weighty questions on this term’s Supreme Court docket in a case that goes back to the Enron scandal of the early 2000s. Congress enacted a series of heavy-handed regulatory measures, known as Sarbanes-Oxley, intended to protect investors in publicly traded companies. The law is, inevitably, being misused.
Enron and its financial auditors tried to hide insider trading by destroying documents and erasing emails, so Congress created an “anti-shredding” provision that prohibits the “destruction, alteration or falsification of records in federal investigations and bankruptcy.” This seems simple enough. The idea was to keep bankers from shredding records of financial transactions or other relevant memos to hide wrongdoing.
John L. Yates, a fisherman on the Gulf of Mexico, learned that things aren’t as simple as they seemed when he was charged with violating the law. Mr. Yates‘ catch of red grouper, which he thought was good news, turned bad when officers of the Florida Fish and Wildlife Conservation Commission boarded his fishing boat. An inspector suspected the fish tossed overboard may have been 19 inches long, when the law says such fish must be at least 20 inches long.
The officer found that six dozen of the red groupers were undersized by an inch or less. Mr. Yates ordered his crew to throw the fish back into the water, and the agents gave him a citation. Case closed, or so it should have been.
Read the full editorial at the Washington Times