# kaal:claim:2273857-034

**Claim.** The SEC never actually interpreted Section 402 of Sarbanes-Oxley and instead merely acquiesced in a law firm memorandum interpreting the provision, so private entities in effect fulfilled the SEC's statutory mandate.

**Type.** empirical  **Support.** evidenced

**Holds when.**

- Section 402 of SOX, the prohibition on issuer credit to directors and officers

**Source quote.**

> The SEC, however, never actually interpreted section 402 and merely acquiesced with a law firm memorandum interpreting section 402.

**From.** Wulf A. Kaal, *Dynamic Regulation of the Financial Services Industry* (2013), II.2.b Contraction, page 18

**Cite as.** Wulf A. Kaal, Dynamic Regulation of the Financial Services Industry (2013). SSRN: https://ssrn.com/abstract=2273857

**Verify.** sha256 of source PDF `e7cb3dea40593135acc99a9b00690138fe01020514ebf388f5140e1b0e59e82a` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202013%20-%20Dynamic%20Regulation%20of%20the%20Financial%20Services%20Industry.pdf

**Failure mode.** regulatory abdication to private interpretation  (family: regulatory-capture-and-incumbent-advantage)

**Topics.** risk-and-incentives

**Keywords.** section-402, sarbanes-oxley, private-ordering, regulatory-abdication

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