Field Guidance on New Criminal Authorities
Enacted in the Sarbanes-Oxley Act of 2002 (H.R. 3763)
Concerning Corporate Fraud and Accountability
Section 802. Criminal Penalties for Altering Documents
New 18 U.S.C.
§ 1519 provides:Whoever knowingly alters, destroys, mutilates, conceals, covers up, falsifies, or makes a false entry in any record, document, or tangible object with the intent to impede, obstruct, or influence the investigation or proper administration of any matter within the jurisdiction of any department or agency of the United States or any case filed under title 11, or in relation to or contemplation of any such matter or case, shall be fined under this title, imprisoned not more than 20 years, or both.
New 18 U.S.C.
§ 1520 provides:(a)(l) Any accountant who conducts an audit of an issuer of securities to which section l0A(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78j-l(a)) applies, shall maintain all audit or review workpapers for a period of 5 years from the end of the fiscal period in which the audit or review was concluded.
(2) The Securities and Exchange Commission shall promulgate, within 180 days, after adequate notice and an opportunity for comment, such rules and regulations, as are reasonably necessary, relating to the retention of relevant records such as workpapers, documents that form the basis of an audit or review, memoranda, correspondence, communications, other documents, and records (including electronic records) which are created, sent, or received in connection with an audit or review and contain conclusions, opinions, analyses, or financial data relating to such an audit or review, which is conducted by any accountant who conducts an audit of an issuer of securities to which section l0A(a) of the Securities Exchange Act of l934 (15 U.S.C. 78j-l(a)) applies....
(b) Whoever knowingly and willfully violates subsection (a)(l), or any rule or regulation promulgated by the Securities and Exchange Commission under subsection (a)(2), shall be fined under this title, imprisoned not more than l0 years, or both.
(c) Nothing in this section shall be deemed to diminish or relieve any person of any other duty or obligation imposed by Federal or State law or regulation to maintain, or refrain from destroying, any document.
Sec. 805. Review of Federal Sentencing Guidelines for Obstruction of Justice and Extensive Criminal Fraud
Sec. 807. Criminal Penalties for Defrauding Shareholders of Publicly Traded Companies
Whoever knowingly executes, or attempts to execute, a scheme or artifice-
(1) to defraud any person in connection with any security of an issuer with a class of securities registered under section 12 of the Securities Exchange Act of 1934 (15 U.S.C. 781) or that is required to file reports under section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 780(d)); or
(2) to obtain, by means of false or fraudulent pretenses, representations, or promises, any money or property in connection with the purchase or sale of any security of an issuer with a class of securities registered under section 12 of the Securities Exchange Act of 1934 (15 U.S.C. 781) or that is required to file reports under section l5(d) of the Securities Exchange Act of 1934 (15 U.S.C. 780(d));
shall be fined under this title, or imprisoned not more than 25 years, or both.
Sec. 902. Attempts and Conspiracies to Commit Criminal Fraud Offenses
New 18 U.S.C.
§ 1349 provides:Any person who attempts or conspires to commit any offense under this chapter shall be subject to the same penalties as those prescribed for the offense, the commission of which was the object of the attempt or conspiracy.
Sec. 903. Criminal Penalties for Mail and Wire Fraud
Sec. 904. Criminal Penalties for Violations of the Employee Retirement Income Security Act of 1974
Section 905. Amendment to the Sentencing Guidelines Relating to Certain White Collar Offenses
Section 906. Corporate Responsibility for Financial Reports
New Section 1350 provides:
(a) CERTIFICATION OF PERIODIC FINANCIAL REPORTS.- Each periodic report containing financial statements filed by an issuer with the Securities Exchange Commission pursuant to section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78O(d)) shall be accompanied by a written statement by the chief executive officer and chief financial officer (or equivalent thereof) of the issuer.
(b) CONTENT.- The statement required under subsection (a) shall certify that the periodic report containing the financial statements fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act pf [sic] 1934 (15 U.S.C. 78m or 78o(d)) and that information contained in the periodic report fairly presents, in all material respects, the financial condition and results of operations of the issuer.
(c) CRIMINAL PENALTIES.- Whoever
(1) certifies any statement as set forth in subsections (a) and (b) of this section knowing that the periodic report accompanying the statement does not comport with all the requirements set forth in this section shall be fined not more than $1,000,000 or imprisoned not more than 10 years, or both; or
(2) willfully certifies any statement as set forth in subsections (a) and (b) of this section knowing that the periodic report accompanying the statement does not comport with all the requirements set forth in this section shall be fined not more than $5,000,000, or imprisoned not more than 20 years, or both.
Sec. 1102. Tampering with a Record or Otherwise Impeding an Official Proceeding.
New Section 1512 (c) provides:
(c) Whoever corruptly-
(1) 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; or
(2) otherwise obstructs, influences, or impedes any official proceeding, or attempts to do so,
shall be fined under this title or imprisoned not more than 20 years, or both.
Section 1104. Amendment to the Federal Sentencing Guidelines
Section 1106. Increased Penalties Under Securities Exchange Act of 1934
Section 1107. Retaliation Against Informants
New subsection (e) of
§ 1513 provides:(e) Whoever knowingly, with the intent to retaliate, takes any action harmful to any person, including interference with the lawful employment or livelihood of any person, for providing to a law enforcement officer any truthful information relating to the commission or possible commission of any Federal offense, shall be fined under this title or imprisoned not more than 10 years, or both.
Retroactive Application of the New Provisions:
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