Summary: H.R.5118 — 107th Congress (2001-2002)All Information (Except Text)

Bill summaries are authored by CRS.

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Passed House amended (07/16/2002)

Corporate Fraud Accountability Act of 2002 - Amends Federal criminal law to: (1) increase the maximum penalties for mail fraud and for wire fraud; and (2) establish criminal penalties for knowing perpetration of securities fraud and for tampering with a record or otherwise impeding an official proceeding.

(Sec. 4) Requests the United States Sentencing Commission to: (1) promptly review sentencing guidelines applicable to securities and accounting fraud; and (2) expeditiously consider promulgation of new sentencing guidelines to provide an enhancement for officers of directors of publicly traded corporations who commit fraud and related offenses. Prescribes guidelines for Commission consideration, including a request that it ensure that the sentencing guidelines and policy statements reflect the serious nature of securities, pension, and accounting fraud and the need for aggressive and appropriate law enforcement action to prevent such offenses. Sets a deadline for promulgation of such guidelines.

(Sec. 5) Amends Federal bankruptcy law to declare nondischargeable in bankruptcy debts that have been incurred in violation of Federal or State laws governing securities fraud, deceit, or manipulation.

(Sec. 6) Amends Federal criminal law to mandate that senior corporate officers certify in writing that financial statements fairly and accurately represent in all material aspects the operations and financial condition of the issuer.

Subjects senior corporate officers to criminal liability for violations of this requirement, including: (1) maximum imprisonment of ten years for knowingly violating financial report requirements; and (2) maximum imprisonment of 20 years for willfully violating such requirements.

(Sec. 7) Subjects any attempt or conspiracy to commit any offense against the United States to the same penalties as those prescribed for the offense.

(Sec. 8) Amends the Securities Exchange Act of 1934 to: (1) increase criminal penalties for violations; and (2) authorize the Securities and Exchange Commission (SEC) to seek a temporary injunction to freeze extraordinary payments earmarked for designated persons or corporate staff under investigation for possible violations of Federal securities laws.

(Sec. 10) Amends the Securities Exchange Act of 1934 and the Securities Act of 1933 to authorize the SEC to prohibit violators of certain provisions from serving as officers or directors of a publicly traded corporation.

(Sec. 11) Amends Federal criminal law to establish criminal penalties for intentional retaliation against any person who has provided information to a law enforcement officer regarding the commission of a Federal offense.