Corporate and Criminal Fraud Accountability Act – Overview and Summary of Requirements
Sections 801 to 807 of the Sarbanes Oxley Act of 2002 are known collectively as the Corporate and Criminal Fraud Accountability Act. The Act details criminal penalties for securities fraud and protects employees-turned-whistleblower of publicly traded companies from retaliatory actions by their employers.
The Corporate and Criminal Fraud Accountability Act includes the following sections:
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Section 801
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Short Title
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Section 802
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Criminal Penalties for Altering Documents
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Section 803
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Debts Nondischargeable if Incurred in Violation of Securities Fraud Laws
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Section 804
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Statute of Limitations for Securities Fraud
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Section 805
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Review of Federal Sentencing Guidelines for Obstruction of Justice and Extensive Criminal Fraud
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Section 806
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Protection for Employees of Publicly Traded Companies Who Provide Evidence of Fraud
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Section 807
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Criminal Penalties for Defrauding Shareholders of Publicly Traded Companies
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Criminal penalties for altering documents
According to the Corporate and Criminal Fraud Accountability Act, it is illegal for any individual to carry out the following activities with respect to documents that pertain to federal investigations and bankruptcy filing processes:
- Alteration
- Destruction
- Mutilation
- Concealment
- Cover up
- Falsification
- Making false entries
Such an illegal activity is punishable by the imposition of fines or the maximum of a 20 year jail sentence or both.
Protection for Employees of Publicly Traded Companies Who Provide Evidence of Fraud
This section of the Act deals with whistleblower protection. Publicly traded companies cannot threaten, harass or discriminate against employees who turn whistleblowers. According to the Act, a whistleblower is an employee who:
- Provides information regarding violations of SEC regulations
- Files, testifies or participates in proceedings regarding SEC violations
Employees who feel they’ve been discriminated against for turning whistleblower can file a complaint with the Secretary of Labor as OSHA is the federal agency enforcing the whistleblower provisions of the Corporate and Criminal Fraud Accountability Act.
Employees who win their discrimination cases are entitled to compensatory damages and monetary settlements.
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Need to improve your knowledge of Sarbanes Oxley compliance? Then attend any of the following ComplianceOnline webinars:
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Criminal Penalties for Defrauding Shareholders of Publicly Traded Companies
The Corporate and Criminal Fraud Accountability Act makes the following illegal with respect to securities fraud:
- Individuals or firms cannot knowingly carry out or attempt to carry out schemes that defraud individuals in connection with a publicly traded securities
- Individuals or firms cannot knowingly carry out or attempt to carry out schemes that obtain, by fraudulent means any money or property in connection with the purchase or sale of any security of an issuer with publicly traded securities
Additional Resources
Compliance Trainings
Employee Expense Reimbursement Fraud: Detection, Prevention and Deterrence
By - Peter Goldmann
On Demand Access Anytime
By - Peter Goldmann
On Demand Access Anytime
Credit card surcharging - who is going to do it and what are the stipulations for compliance?
By - Ray Graber
On Demand Access Anytime
By - Ray Graber
On Demand Access Anytime
Compliance Standards
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