As of 2002, the Sarbanes-Oxley Act has established additional criminal penalties for acts that interfere with the transparency and accountability of publicly trading companies. In amending the portions of Title 18 of the United States Code, the Sarbanes-Oxley Act created three new federal criminal offenses related to financial record keeping:
Sec. 1519. Destruction, alteration, or falsification of records in Federal investigations and bankruptcy
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.
Sec. 1520. Destruction of corporate audit records
(a)
(1) Any accountant who conducts an audit of an issuer of
securities to which section 10A(a) of the Securities Exchange Act of
1934 (15 U.S.C. 78j-1(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 10A(a) of the Securities Exchange Act of
1934 (15 U.S.C. 78j-1(a)) applies. The Commission may, from time to
time, amend or supplement the rules and regulations that it is required
to promulgate under this section, after adequate notice and an
opportunity for comment, in order to ensure that such rules and
regulations adequately comport with the purposes of this section.
(b) Whoever knowingly and willfully violates subsection (a)(1), 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 10 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. 1350. Failure of corporate officers to certify financial reports
(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 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.
Sarbanes-Oxley also increased the criminal penalties for defrauding shareholders of publicly traded companies, mail fraud, wire fraud, securities fraud, and retaliation against corporate whistleblowers.
Although the sentencing guidelines are only advisory, the provisions of the White Collar Crime Penalty Enhancement Act of 2002 also directed the United States Sentencing Commission to enhance the penalties related
to obstruction of justice where:
