The Sarbanes-Oxley Riot That Wasn’t

The Supreme Court’s decision to curb the use of Sarbanes-Oxley Act against what could be hundreds of January 6 rioters is a stunning black eye for the Department of Justice. It was caught using against these rioters a law that provides for particularly stiff sentences — a maximum of 20 years — even though the rioters were hardly committing financial fraud. All of those charged in this manner also face allegations better suited to the events of that day.Our A.R. Hoffman has been marking this point, in a series of far-sighted dispatches, since the first days of 2023. The government received fair notice from the skepticism of trial judges that its charges could be reckoned as overbroad. One, Amit Mehta, called it a “real problem” for prosecutors to “suggest, ‘We know it when we see it, and we’ll pick and choose when it is an appropriate exercise of prosecutorial discretion.’”The trial judge who first heard Joseph Fischer’s case, Carl Nichols, agreed with the police officer turned rioter that the Sarbanes-Oxley statute was inapt for the circumstances. The law imposes liability on anyone who “alters, destroys, mutilates, or conceals a record, document, or other object, or attempts to do so, with the intent to impair the object’s integrity or availability for use in an official proceeding.” Its drafters contemplated Enron, not January 6.The charges, though, were restored by a fractured panel of the United States Court of Appeals for the District of Columbia Circuit. Now a six to three decision — authored by the Chief Justice — concludes the government impermissibly stretched the statute beyond recognition. It involves no concession in respect of the shock and horror of that day to also insist that prosecutors tasked with punishing its perpetrators not exceed the law’s limits.That point is well-made in a concurrence by Justice Ketanji Brown Jackson, who declined to dissent with her liberal colleagues — and Justice Amy Coney Barrett. She writes “notwithstanding the shocking circumstances involved in this case or the Government’s determination that they warrant prosecution, today, this Court’s task is to determine what conduct is proscribed by the criminal statute that has been invoked.” Attorney General Garland shared that he is “disappointed” by Friday’s decision, “which limits an important federal statute that the Department has sought to use to ensure that those most responsible for that attack face appropriate consequences.” He promises though, to “take appropriate steps to comply with the Court’s ruling.” The same will be required of Special Counsel Jack Smith, who has charged President Trump with Sarbanes-Oxley violations twice. More than a year ago, we wrote in these columns that it would amount to “an abuse to use Sarbanes-Oxley in pursuing those who rioted on January 6.” Even the attack on the Capitol, we reasoned, “offers no justification for traversing the Constitution by way of overambitious interpretation of criminal laws by prosecutors.” The DOJ could consider circulating to its attorneys Justice Robert Jackson’s warning on this head. Notably, the majority was joined by Justice Neil Gorsuch. He did not issue a separate concurrence, but his concurrence yesterday in the case of a small town mayor accused of corruption was devoted completely to the ancient rule of lenity. That holds that ambiguity in a criminal statute is to redound in favor of the accused. Justice Gorsuch wrote in that case that “Whatever the label, lenity is what’s at work behind today’s decision, just as it is in so many others.”This one, for starters. The Chief Justice, through a series of well-crafted examples involving a zoo and a football game — his smoothness as a writer shows no signs of abating — persuades that Fischer has the better of the text. Justice Jackson was convinced enough to bid her fellow travelers adieu. Justice Gorsuch writes that lenity also goes by “fair notice” or “fair warning.” Plus, we would add in cases like Fischer, “due process.”

The Sarbanes-Oxley Riot That Wasn’t

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