Federal Register / Vol. 72, No. 79 / Wednesday, April 25, 2007 / Notices 20573 

6 15 U.S.C. 78f. 

7 15 U.S.C. 78f(b)(4). 

8 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3Amendment No. 1 replaced and superseded the 

original filing in its entirety. 

requirements. Further, relevant 

information about these companies is 

already contained in Nasdaq’s 

compliance systems. Finally, Nasdaq 

anticipates that there would be fewer 

questions concerning the company’s 

financial statements given that these 

companies will often have undergone 

extensive review by their auditors and, 

in some cases, by independent 

investigators and the Commission or 

other regulatory entities, in order to 

resolve the issues that caused the late 

filings. 

Nasdaq is implementing these waivers 

to incent companies to re-list on Nasdaq 

once they regain compliance with the 

periodic filing requirement, rather than 

seek a listing elsewhere. Nasdaq 

believes that this waiver is appropriate, 

especially because Nasdaq’s rules 

governing the delisting of companies 

that are delinquent in periodic reports 

are generally stricter than those of other 

markets. As such, the proposed waivers 

will promote competition between 

Nasdaq and other exchange markets. 

The proposed rule change will not 

affect Nasdaq’s commitment of 

resources to its regulatory oversight of 

the listing process or its other regulatory 

programs. Specifically, Nasdaq will still 

conduct a complete review of these 

companies for compliance with Nasdaq 

listing standards in the same manner as 

any other company applying for listing 

on Nasdaq. Any fee waiver under this 

proposed rule is predicated on the 

Company successfully completing that 

review process and demonstrating 

compliance with the initial listing 

requirements. 

Finally, Nasdaq proposes to delete a 

duplicative provision in Rule 4520(b). 

Currently, Rule 4520(b)(6) is identical to 

Rule 4520(b)(2). As such, Nasdaq 

proposes to delete Rule 4520(b)(6). 

2. Statutory Basis 

Nasdaq believes that the proposed 

rule change is consistent with the 

provisions of Section 6 of the Act,6 in 

general, and with Section 6(b)(4) of the 

Act,7 in particular. Nasdaq believes that 

the proposed waivers are equitable and 

reasonable because these companies 

previously paid entry and annual fees to 

Nasdaq and to again charge such fees 

would impose duplicative costs. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

Nasdaq does not believe that the 

proposed rule change will impose any 

burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

Written comments were neither 

solicited nor received. 

III. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number SR–NASDAQ–2007–040 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Nancy M. Morris, Secretary, 

Securities and Exchange Commission, 

Station Place, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NASDAQ–2007–040. This 

file number should be included on the 

subject line if e-mail is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for inspection and copying in 

the Commission’s Public Reference 

Room. Copies of such filing also will be 

available for inspection and copying at 

the principal office of Nasdaq. All 

comments received will be posted 

without change; the Commission does 

not edit personal identifying 

information from submissions. You 

should submit only information that 

you wish to make available publicly. All 

submissions should refer to File 

Number SR–NASDAQ–2007–040 and 

should be submitted on or before May 

16, 2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.8

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–7838 Filed 4–24–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55646; File No. SR–NYSE–

2007–02] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing of Proposed Rule Change and 

Amendment No. 1 Thereto To Adopt 

New Rule 447 (‘‘Emergency Powers’’) 

April 19, 2007. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 1 and Rule 19b–4 thereunder,2

notice is hereby given that on January 9, 

2007, New York Stock Exchange LLC 

(‘‘NYSE’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘Commission’’) the proposed 

rule change as described in Items I, II, 

and III below, which Items have been 

substantially prepared by NYSE. On 

April 18, 2007, NYSE submitted 

Amendment No. 1 to the proposed rule 

change.3 The Commission is publishing 

this notice to solicit comments on the 

proposed rule change, as amended, from 

interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to adopt new 

Rule 447 (‘‘Emergency Powers’’) which 

would allow the Exchange to grant 

exemptive regulatory relief in the event 

of an emergency, e.g. a pandemic-like 

situation. The text of the proposed rule 

change is available at NYSE, the 

Commission’s Public Reference Room, 

and http://www.nyse.com. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it had received on the 


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20574 Federal Register / Vol. 72, No. 79 / Wednesday, April 25, 2007 / Notices 

4See NYSE Information Memo 06–30 (May 5, 

2006) for further guidance. 

5See NYSE Information Memos 04–24 (May 3, 

2004) and 05–80 (October 13, 2005) for additional 

guidance. 

6 15 U.S.C. 78l(k)(2). 

7 15 U.S.C. 78l(k)(7). 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in Sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Introduction 

Currently, the Exchange does not, in 

the normal course, grant plenary 

exemptive relief to member 

organizations from the requirements of 

NYSE rules. The Exchange is proposing 

to obtain authorization to provide such 

relief, in the rare event of overwhelming 

need, such as a pandemic, by way of the 

new proposed NYSE Rule 447. 

In the wake of recent media attention 

and industry concern regarding the 

potential for a pandemic flu outbreak,4

proposed Rule 447 would provide the 

Exchange with a basis of authority 

pursuant to which it may consider 

granting exemptive regulatory relief 

during such an emergency. 

In implementation of the duty to 

enforce regulatory compliance, selfregulatory organizations (‘‘SROs’’) 

possess inherent authority to administer 

and interpret their own rules. This 

authority comprehends the ability to 

grant relief from the formal strictures of 

a specific provision where the conduct 

sought to be effected, in any single given 

instance, is otherwise consistent with 

the purpose and intent of that rule. 

However, the Exchange does not have a 

medium for granting interim, but 

categorical relief to a class of its 

membership across rule lines—as 

circumstances may necessitate, and/or 

to impose additional and more rigorous 

requirements in response to emergency 

conditions. The purpose of the proposed 

rule is to provide such a mechanism and 

thereby grant the Exchange the 

regulatory flexibility to grant member 

organizations relief in the event of an 

emergency, as defined. 

Indeed, many of the types of relief 

envisioned under the proposed rule 

illustrate the general circumspection 

with respect to which requests for relief 

would be viewed. While recourse to the 

rule would be limited to ‘‘major 

disturbances’’ in regard to which the 

Commission is statutorily authorized to 

alter, suspend, or impose requirements 

or restrictions of matters subject to 

regulation by it or SROs, the nature of 

the relief to be granted would 

necessarily serve to mitigate the effects 

of the disruption so that the markets 

may perform in a manner consistent 

with customer expectations. Likely, the 

same manner of consequences to affect 

the investing public would similarly 

impact personnel of the securities 

industry such that they would equally 

need to address these external forces 

and factors. 

Background 

Existing NYSE Rules 

NYSE Rule 446 (‘‘Business Continuity 

and Contingency Plans’’) governs 

business continuity and contingency 

planning for member organizations. 

While the rule does not require that 

member organizations remain in 

business in the event of a significant 

business disruption, it does require 

firms to have a plan in place 

establishing procedures reasonably 

designed to enable the member 

organization to meet existing obligations 

to customers, other broker-dealers, and 

counter-parties.5 In an effort to assist 

and enable member organizations in the 

context of an emergency to remain in 

compliance with NYSE rules, the 

Exchange is proposing new Rule 447 to 

apply where regulatory flexibility may 

be necessary to address the emergency 

atmosphere which could result in the 

event of a pandemic or other similar 

type event. Easing circumstances for 

facilitating member organizations to 

remain in business would facilitate the 

orderly flow of the markets while also 

providing for the protection of investors. 

Federal Exemptive Relief 

Section 12(k)(2) of the Act 6 empowers 

the SEC, in an emergency, to take 

summary action to alter, suspend, or 

supplement requirements or restrictions 

with respect to any matter subject to 

regulation by the Commission or an 

SRO. Section 12(k)(7) of the Act 7

defines the term ‘‘emergency’’ to 

include ‘‘a major disturbance that 

substantially disrupts, or threatens to 

substantially disrupt the functioning of 

securities markets, investment 

companies, or any other significant 

portion or segment of the securities 

markets* * *.’’

Proposed NYSE Rule 447 

General Rule 

Proposed Rule 447 allows the 

Exchange, with the concurrence of the 

Commission that an ‘‘emergency’’ exists, 

where it is necessary in the public 

interest and for the protection of 

investors, and on such conditions, if 

any, which it may impose, to grant 

certain regulatory relief to member 

organizations. The Exchange may take 

action in implementation of the 

proposed rule at its discretion, after 

seeking the concurrence of the 

Commission as to the type of relief that 

may be appropriate in the 

circumstances, in respect of any 

member organization, any class or 

category of member organization, or in 

respect of all member organizations 

and/or their personnel. 

The Exchange would seek the 

concurrence of the SEC by alerting 

Commission staff electronically or via 

telephone as to the type of action the 

Exchange would take in implementation 

of the proposed rule. NYSE staff would 

make a good faith effort to have a 

conversation with Commission staff. 

However, if NYSE staff is unable to 

reach SEC staff, it may take action and 

advise the SEC of such action in an 

expedient manner. Pursuant to 

conversations with Commission staff, 

the Exchange may move forward with 

the appropriate relief in good faith 

without formal agreement from the 

Commission so as to provide timely 

relief to member organizations in an 

emergency. 

Specific Regulatory Relief 

Under the proposed rule, the 

Exchange may elect to defer or extend 

Exchange-imposed time frames 

(otherwise applicable) for: Filing 

documents or reports with the Exchange 

(other than trade reports or reports 

arising from the settlement of 

transactions); obtaining Exchange 

approval, where such approval is 

required; requesting margin extensions 

via Exchange automated extension 

processing systems; or complying with 

testing, training, or continuing 

education requirements. The Exchange 

may ‘‘defer’’ time frames where it is 

appropriate to put off or delay the due 

dates for submissions or approvals until 

an unknown date, based on the 

circumstances of the emergency. 

Otherwise, the Exchange may ‘‘extend’’

time frames to a fixed date in the future. 

In addition, the proposed rule gives 

the Exchange authority, upon customer 

consent, to permit recourse to means 

and systems not customarily utilized by 

broker-dealers for: The direct receipt, 


cprice-sewell on PRODPC61 with NOTICES
Federal Register / Vol. 72, No. 79 / Wednesday, April 25, 2007 / Notices 20575 

8See NYSE Information Memo 05–74 (October 6, 

2005); see also SEC Staff Legal Bulletin No. 17 

(March 19, 2004) regarding supervision of remote 

locations. 

9Under NYSE Rule 326, the Exchange may 

impose restrictions on a member organization’s 

business activities if it fails to maintain, among 

other things, the capital requirements of Rule 15c3–

1 under the Act. The proposed rule grants the 

Exchange authority to require member 

organizations to limit or reduce business activities 

in an emergency, regardless of whether the firm is 

in compliance with these provisions. 

10EFP is an extranet built by the NYSE to support 

authenticated, encrypted, two-way communications 

between the NYSE and its membership. It is used 

to communicate information to certain key 

personnel of member organizations. 

11 15 U.S.C. 78f(b)(5). 

transmission, or delivery of funds and 

securities, to and from customers; the 

valuation of securities; and the 

transmission of statements, 

confirmations, proxy materials, and 

other functionally equivalent material. 

This would allow broker-dealers to 

work with the Exchange to determine 

alternative means and systems to most 

effectively serve their customers and the 

public interest in the event of an 

emergency. 

The proposed rule would allow the 

Exchange to permit the closure of main 

offices during an emergency. The 

Exchange may also elect to recognize 

alternative testing and/or qualification 

criteria for tests or criteria otherwise 

required as a prerequisite to the 

assumption of a position or function. 

Under proposed Rule 447, the 

Exchange may modify or waive, in 

whole or in part, requirements 

pertaining to the registration and 

supervision of branch offices and their 

personnel and the payment of late fees. 

This relief would not apply to the 

requirements relating to the 

maintenance of books and records or the 

obligation for a member organization to 

maintain essential supervision of all its 

associated persons. The Exchange may 

provide relief which allows member 

organizations to implement remote 

supervision 8 of branch offices 

(including locations otherwise not 

eligible for such) in an emergency, 

which would provide flexibility for 

member organizations to retain the 

essential supervision of associated 

persons. 

Pursuant to proposed Rule 447, the 

Exchange may take certain action to 

restrict the activities of member 

organizations in an emergency. The 

proposed rule would allow the 

Exchange to alter or rescind approval of 

a member organization’s outsourcing 

arrangements or expand the 

requirements or prerequisites applicable 

to such. The Exchange may also require 

the curtailment or reduction of business 

activity and/or solicitation of new 

accounts or new products.9 Moreover, 

the Exchange may require the 

enhancement of insurance coverage; the 

closure of offices or locations; and/or 

the addition of supervisory personnel or 

procedures. 

In addition to the actions noted above, 

the proposed rule gives the Exchange 

authority to take such other similar 

action, or withhold taking similar 

action, in anticipation of, during the 

course of, or as a consequence of, an 

emergency. 

Timing 

In implementation of the proposed 

rule, the Exchange would grant 

regulatory relief for a maximum of 90 

days, and would be wary of situations 

which would impede access by 

customers to their funds or securities. 

Upon the passage of 90 days from the 

initial action by the Exchange, the 

Exchange may find, with the 

concurrence of the Commission, that an 

emergency continues to exist. Upon 

such a finding, the Exchange would reevaluate the types of relief granted and, 

after seeking the concurrence of the 

Commission, determine whether to 

further extend such relief, provide 

alternative relief, or cease the grant of 

such relief. 

If the Exchange determines not to 

extend the regulatory relief past 90 days, 

it would alert member organizations to 

the date on which the relief would 

expire via Information Memo and/or the 

Exchange’s Electronic Filing Platform 

(‘‘EFP’’).10 The Exchange would supply 

a reasonable expiration date to allow 

adequate time for member organizations 

to adjust to the reinstatement of 

customary regulatory requirements. 

Inasmuch as the purpose of this 

proposed rule is to grant authority to the 

Exchange to act creatively in the event 

of an emergency, the terms of the rule 

are, to a certain extent, broad and 

inclusive. However, the Exchange 

would act in a manner consistent with 

the public interest and for the protection 

of investors, and it intends to be bound 

by and guided by these underlying 

precepts should there be need to invoke 

the rule and exercise the power therein. 

2. Statutory Basis 

The statutory basis for this proposed 

rule change is Section 6(b)(5) of the 

Act.11 Section 6(b)(5) requires, among 

other things, that rules of an exchange 

be designed to promote just and 

equitable principles of trade, to remove 

impediments to and perfect the 

mechanism of a free and open market 

and national market system, and in 

general, to protect investors and the 

public interest. The proposed rule will 

provide the Exchange with the 

regulatory flexibility to grant member 

organizations relief, as necessary, in the 

event of an emergency, as defined. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will result in 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange has neither solicited 

nor received written comments on the 

proposed rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 35 days of the date of 

publication of this notice in the Federal 

Register or within such longer period; 

(i) As the Commission may designate up 

to 90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding, or 

(ii) as to which NYSE consents, the 

Commission will: 

(A) By order approve such proposed 

rule change; or 

(B) Institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an e-mail to 

rule-comments@sec.gov. Please include 

File Number SR–NYSE–2007–02 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Nancy M. Morris, Secretary, 

Securities and Exchange Commission, 

Station Place, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NYSE–2007–02. This file 

number should be included on the 

subject line if e-mail is used. To help the 


cprice-sewell on PRODPC61 with NOTICES
20576 Federal Register / Vol. 72, No. 79 / Wednesday, April 25, 2007 / Notices 

12 17 CFR 200.30–3(a)(12). 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site http://www.sec.gov/ 

rules/sro.shtml. Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for inspection and copying in 

the Commission’s Public Reference 

Room. Copies of such filing also will be 

available for inspection and copying at 

the principal office of NYSE. All 

comments received will be posted 

without change; the Commission does 

not edit personal identifying 

information from submissions. You 

should submit only information that 

you wish to make publicly available. All 

submissions should refer to File 

Number SR–NYSE–2007–02 and should 

be submitted on or before May 16, 2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.12

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–7836 Filed 4–24–07; 8:45 am] 

BILLING CODE 8010–01–P 

UNITED STATES SENTENCING 

COMMISSION 

Sentencing Guidelines for United 

States Courts 

AGENCY: United States Sentencing 

Commission. 

ACTION: Notice of a temporary, 

emergency amendment to sentencing 

guidelines, policy statements, and 

commentary. 

SUMMARY: Pursuant to section 4 of the 

Telephone Records and Privacy 

Protection Act of 2006 (the ‘‘Telephone 

Act’’), Pub. L. 109–476, the Commission 

hereby gives notice of a temporary, 

emergency amendment to the 

sentencing guidelines, policy 

statements, and commentary. This 

notice sets forth the temporary, 

emergency amendment and the reason 

for amendment. 

DATES: The Commission has specified 

an effective date of May 1, 2007, for the 

emergency amendment. 

FOR FURTHER INFORMATION CONTACT: 

Michael Courlander, Public Affairs 

Officer, Telephone: (202) 502–4590. 

SUPPLEMENTARY INFORMATION: The 

Commission must promulgate a 

temporary, emergency amendment to 

implement the directive to section 4 of 

the Telephone Act by July 11, 2007. On 

January 30, 2007, the Commission 

published in the Federal Register an 

issue for comment regarding the 

implementation of this directive. 

The temporary, emergency 

amendment set forth in this notice also 

may be accessed through the 

Commission’s Web site at http:// 

www.ussc.gov. 

Authority: 28 U.S.C. 994(a), (o), (p), (x); 

section 4 of Pub. L. 109–497. 

Ricardo H. Hinojosa, 

Chair. 

Pretexting 

Amendment: Section 2H3.1 is 

amended in the heading by striking 

‘‘Tax Return Information’’ and inserting 

‘‘Certain Private or Protected 

Information’’. 

Section 2H3.1(b)(1) is amended by 

inserting ‘‘(A) the defendant is 

convicted under 18 U.S.C. § 1039(d) or 

(e); or (B)’’ after ‘‘If’’. 

The Commentary to § 2H3.1 captioned 

‘‘Statutory Provisions’’ is amended by 

inserting ‘‘§ 1039,’’ after ‘‘18 U.S.C.§’’. 

The Commentary to § 2H3.1 captioned 

‘‘Application Notes’’ is amended by 

striking Note 1; by redesignating Note 2 

as Note 1; and by inserting after Note 1, 

as redesignated by this amendment, the 

following: 

‘‘2. Imposition of Sentence for 18 

U.S.C. § 1039(d) and (e).—Subsections 

1039(d) and (e) of title 18, United States 

Code, require a term of imprisonment of 

not more than 5 years to be imposed in 

addition to any sentence imposed for a 

conviction under 18 U.S.C. § 1039(a), 

(b), or (c). In order to comply with the 

statute, the court should determine the 

appropriate ‘total punishment’ and 

divide the sentence on the judgment 

form between the sentence attributable 

to the conviction under 18 U.S.C. 

§ 1039(d) or (e) and the sentence 

attributable to the conviction under 18 

U.S.C. § 1039(a), (b), or (c), specifying 

the number of months to be served for 

the conviction under 18 U.S.C. § 1039(d) 

or (e). For example, if the applicable 

adjusted guideline range is 15–21 

months and the court determines a ‘total 

punishment’ of 21 months is 

appropriate, a sentence of 9 months for 

conduct under 18 U.S.C. § 1039(a) plus 

12 months for 18 U.S.C. § 1039(d) 

conduct would achieve the ‘total 

punishment’ in a manner that satisfies 

the statutory requirement. 

3. Upward Departure.—There may be 

cases in which the offense level 

determined under this guideline 

substantially understates the 

seriousness of the offense. In such a 

case, an upward departure may be 

warranted. The following are examples 

of cases in which an upward departure 

may be warranted: 

(i) The offense involved confidential 

phone records information of a 

substantial number of individuals. 

(ii) The offense caused or risked 

substantial non-monetary harm (e.g. 

physical harm, psychological harm, 

severe emotional trauma, or a 

substantial invasion of privacy interest) 

to individuals whose private or 

protected information was obtained.’’. 

The Commentary to § 2H3.1 is 

amended by striking the Background 

Commentary. Appendix A (Statutory 

Index) is amended by inserting after the 

line referenced to 18 U.S.C. § 1038 the 

following new line: 

‘‘18 U.S.C. § 1039 2H3.1’’. 

Reason for Amendment: This 

amendment implements the emergency 

directive in section 4 of the Telephone 

Records and Privacy Protection Act of 

2006, Pub. L. 109–476. The directive, 

which requires the Commission to 

promulgate an amendment under 

emergency amendment authority by July 

11, 2007, instructs the Commission to 

‘‘review and, if appropriate, amend the 

Federal sentencing guidelines and 

policy statements applicable to persons 

convicted of any offense under section 

1039 of title 18, United States Code.’’

Section 1039 criminalizes the 

fraudulent acquisition or disclosure of 

confidential phone records. The 

penalties for violating the statute 

include fines and imprisonment for a 

term not to exceed 10 years. The statute 

also includes enhanced penalties for 

certain forms of aggravated conduct, 

providing for up to a five year term of 

imprisonment, in addition to the 

penalties for a violation of section 

1039(a), (b), or (c). See 18 U.S.C. 

1039(d), (e). 

The amendment refers the new 

offense at 18 U.S.C. 1039 to § 2H3.1 

(Interception of Communications; 

Eavesdropping; Disclosure of Tax 

Return Information). The Commission 

concluded that disclosure of telephone 

records is similar to the types of privacy 

offenses referenced to this guideline. In 

addition, this guideline includes a cross 

reference, instructing that if the purpose 

of the offense was to facilitate another 

offense, that the guideline applicable to 

an attempt to commit the other offenses 


cprice-sewell on PRODPC61 with NOTICES