Copyright 2006 Interactive Engineering Pty Ltd ORION General Legal The Sarbanes Oxley Act Turning legal text into active structure

ORION General Legal Copyright 2006 Interactive Engineering Here is a fragment of the Sarbanes Oxley Act (SOX) as displayed in Orion’s General Legal Parser. The system automatically parses and analyzes the text, utilizing its grammatical and semantic knowledge, and generates persistent active structures that fully represent the text’s legal meaning. It has already read in the clauses preceding this one, and can make all the connections the text indicates. After the full Act and its associated rules are imported, the active structure the system has built can be used to answer questions or verify business compliance.

ORION General Legal Copyright 2006 Interactive Engineering Here is the grammatical structure created for the first sentence, as shown in the Grammar Display tool. On the left, we can see the contextual hierarchy under which the structures matching the sentences are created. The hierarchy is used for references to other parts of the document, to provide context for new terms defined in the text, and to pass logical and existential control down to the structures. At the base is the parse chain of word tokens, on top of which the system builds a multi level tree with increasing level of abstraction.

ORION General Legal Copyright 2006 Interactive Engineering The Commission shall, by rule, require, for each company filing periodic reports under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m, 78o(d)), that the principal executive officer or officers and the principal financial officer or officers, or persons performing similar functions, certify in each annual or quarterly report filed or submitted under either such section of such Act that— (3) based on such officer’s knowledge, the financial statements, and other financial information included in the report, fairly present in all material respects the financial condition and results of operations of the issuer as of, and for, the periods presented in the report; All prepositional chains are applied or folded into the underlying structure to be applied later Groups of objects are turned into ObjectGroups The underlying structure is built and pending prepositional chains and adverbial modifiers are applied The Commission shall require that (principal executive&financial officer(s) ) certify that— (3) (statements&information) present (condition&results); The Commission shall require that the principal executive officer or officers and the principal financial officer or officers, or persons, certify that— (3) the financial statements, and other financial information, present the financial condition and results; There is no particular order in any of this - “annual or quarterly” and “filed and submitted” were grouped before they were made part of a prepositional chain, verbal modifiers are taken out immediately they are seen - the system is opportunistic, doing whatever it can do reliably as soon as it can, to reduce the complexity of what remains During parsing, there is a continuous process of simplification and abstraction

ORION General Legal Copyright 2006 Interactive Engineering The system maintains a local dictionary for terms defined in the document. The local terms are shown listed on the left. Some of the terms are ‘‘appropriate State regulatory authority’’ and ‘‘audit committee’’. These are typically declared at the beginning of the document, but definitions may also be dispersed through it (“blackout period”), and may even have different meanings in different parts of the document (“For the purposes of this clause,...” ). With this complexity, it is easy to make a mistake without a dutiful assistant.

ORION General Legal Copyright 2006 Interactive Engineering The structures shown in previous slides were automatically built from this text. Changes in the Act or its rules result in changes to the structure, and changes in how it determines compliance. Reading of the text is faster than an attentive human reader, but here the structure is permanently captured in its entirety, and can be used for validity checking answering questions simulation at any time. The model is not limited to analyzing legal text, and can be integrated with the system tracking the internal controls requiring certification, or even be the means of implementing complex controls.