Executive Certification Requirements in the Sarbanes-Oxley Act of 2002: A Case for Criminalizing Executive Recklessness

This Comment focuses on sections 302 and 906 of the Sarbanes-Oxley Act. Section 302 requires Chief Executive Officers (CEOs) and Chief Financial Officers (CFOs), or their equivalents, to personally certify the accuracy of financial disclosure filings required by the SEC and to vouch for the reliability of the internal corporate controls that produce that information.'4 Section 906 contains an additional certification requirement and provides specific criminal penalties for willful or knowing violations of that requirement.'" An efficiency-based analysis of these two sections of the Sarbanes-Oxley Act suggests that including a recklessness standard of intent would be more likely to increase the accuracy of the information, reduce the aggregate costs of obtaining the information, and restore much-needed investor confidence. As a result, Congress should amend the Sarbanes-Oxley Act to create a single, coherent certification requirement with criminal penalty provisions that incorporate recklessness as a standard of intent giving rise to criminal culpability.