FRL 403 SOX Act

The Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into federal law on July 21, 2010 as a response to the Great Recession.

Dodd Frank made changes in the American financial regulatory environment that affect all federal financial regulatory agencies and almost every part of the nation's financial services industry.

Corporate Fraud Accountability Title XI identifies corporate fraud and records tampering as criminal offenses and joins those offenses to specific penalties.

Prevention goals of the SOX act: Conflicts of interest, boardroom failures, inadequate funding of the SEC, more efficient banking practices, avoiding another bubble, internet, executive compensation.

Analyst Conflicts of Interest Title V includes measures designed to help restore investor confidence in the reporting of securities analysts. It defines the codes of conduct for securities analysts and requires disclosure of knowable conflicts of interest.

SEC Resources and Authority Title VI defines the SEC's authority to censure or bar securities professionals from practice and defines conditions under which a person can be barred from practicing as a broker, advisor, or dealer.

The SEC is specifically authorized to issue "point-of-sale disclosure" rules when retail investors purchase investment products or services; these disclosures include concise information on costs, risks, and conflicts of interest.

Subtitle A provides authority for the SEC to impose regulations requiring "fiduciary duty" by broker-dealers to their customers. Although the Act does not create such a duty immediately, the Act authorizes the SEC to establish such a standard

Title IX revises the powers and structure of the Securities and Exchange Commission, credit rating organizations, and the relationships between customers and broker-dealers or investment advisers. This title calls for various studies and reports from the SEC and Government Accountability Office.

To increase the influence of investors, the Act creates an Office of the Investor Advocate, an Investor Advisory Committee composed of 12-22 members of whom serve 4-year terms, and an ombudsman appointed by the Office of the Investor Advocate.

It created a new, quasi-public agency, the Public Company Accounting Oversight Board, or PCAOB, charged with overseeing, regulating, inspecting, and disciplining accounting firms in their roles as auditors of public companies.

Auditor Independence Title II establishes standards for external auditor independence, to limit conflicts of interest. It also addresses new auditor approval requirements, audit partner rotation, and auditor reporting requirements.

White Collar Crime Penalty Enhancement Title IX is also called the "White Collar Crime Penalty Enhancement Act of 2002." This section increases the criminal penalties associated with white-collar crimes and conspiracies

Corporate Tax Returns Title X states that the Chief Executive Officer should sign the company tax return.

Studies and Reports Title VII requires the Comptroller General and the SEC to perform various studies and report their findings. Studies and reports include the effects of consolidation of public accounting firms

Corporate and Criminal Fraud Accountability Title VIII describes specific criminal penalties for manipulation, destruction or alteration of financial records or other interference with investigations, while providing certain protections for whistle-blowers.

Corporate Responsibility Title III mandates that senior executives take individual responsibility for the accuracy and completeness of corporate financial reports. It defines the interaction of external auditors and corporate audit committees, and specifies the responsibility of corporate officers.

Enhanced Financial Disclosures Title IV describes enhanced reporting requirements for financial transactions, including off-balance-sheet transactions, pro-forma figures and stock transactions of corporate officers.

Dodd Frank gives the SEC further powers of enforcement. This includes a "whistleblower bounty program". more than 1million in sanctions, rewards from 10% - 30%

The US Freedom of Information Act no longer applies to the SEC.

The Sarbanes-Oxley Act of 2002 , is a federal law that set new or expanded requirements for all U.S. public company boards, management and public accounting firms.

The bill was enacted as a reaction to a number of major corporate and accounting scandals, including those affecting Enron, Tyco and WorldCom.