Welcome to the September 2009 edition of the Sarbanes Oxley
Compliance Professionals Association (SOXCPA)
newsletter
Dear Members,
We have
an interesting amendment of the Sarbanes
Oxley Act, and some very interesting developments. We will
also discuss the US rulemaking process, and Section 304 of the Act
(and its new interpretations)
Breaking
News
Prepare for the amendment of the Sarbanes-Oxley Act of 2002 to
permit confidential supervisory information
sharing with foreign auditor oversight bodies.
This is one critical step for the mutual
recognition and cooperation with the supervisory authorities of
the European Union and other countries.
111TH CONGRESS 1ST SESSION H. R. 3346
To amend the Sarbanes-Oxley Act of 2002 to permit the sharing of
confidential supervisory information with foreign auditor
oversight bodies.
IN THE HOUSE OF REPRESENTATIVES, JULY 27,
2009
Mr. FRANK of Massachusetts (for himself and Mr. KANJORSKI)
introduced the following bill; which was referred to the Committee
on Financial Services
A BILL
To amend the Sarbanes-Oxley Act of 2002 to permit the sharing of
confidential supervisory information with foreign auditor
oversight bodies.
Be it enacted by the Senate and House of Representa tives of the
United States of America in Congress assembled,
SECTION 1. AUTHORITY TO SHARE CERTAIN
INFORMATION.
(a) DEFINITION.-Section 2(a) of the Sarbanes- Oxley Act of 2002
(15 U.S.C. 7201(a)) is amended by inserting after paragraph (16)
the following:
''(17) FOREIGN AUDITOR OVERSIGHT
AUTHORITY.-The term 'foreign auditor oversight authority' means
any governmental body or other entity empowered by a foreign
government to conduct inspections of public accounting firms or
otherwise to administer or enforce laws related to the regulation
of public accounting firms.''.
(b) AVAILABILITY TO SHARE INFORMATION.-Section 105(b)(5) of the
Sarbanes-Oxley Act of 2002 (15 U.S.C. 7215(b)(5)) is amended by
adding at the end the following:
''(C) AVAILABILITY TO FOREIGN OVERSIGHT
AUTHORITIES.-When in the Board's discretion it is necessary to
accomplish the purposes of this Act or to protect investors, and
without the loss of its status as confidential and privileged in
the hands of the Board, all information referred to in
subparagraph (A) that relates to a public accounting firm within
the inspection authority, or other regulatory or law enforcement
jurisdiction, of a foreign auditor oversight authority may be made
available to the foreign auditor oversight authority if the
foreign auditor oversight authority provides such assurances of
confidentiality as the Board determines appropriate.''.
Notes
Congressman Frank became Chairman of the Committee on Financial
Services in January, 2007. The committee has a very wide
jurisdiction, and it is the second largest committee in the
Congress - there are seventy members.
House Financial Services Committee
The Committee oversees all components of the
US housing and financial services sectors including banking,
insurance, real estate, public and assisted housing, and
securities.
The Committee continually reviews the laws and programs relating
to the U.S. Department of Housing and Urban Development, the
Federal Reserve Bank, the Federal Deposit Insurance Corporation,
Fannie Mae and Freddie Mac, and international development and
finance agencies such as the World Bank and the International
Monetary Fund.
The Committee also ensures enforcement of housing and consumer
protection laws such as the U.S. Housing Act, the Truth In Lending
Act, the Housing and Community Development Act, the Fair Credit
Reporting Act
It is good to know:
The Stages of the US Legislative Process
Under the United States Constitution, the power to legislate is
vested in the United States Congress. The Congress is made up of
two bodies: the U.S. House of Representatives and the U.S. Senate.
The concurrence of both is required to enact a law.
The Stages of the US Legislative Process:
1. Bill introduction
2. Referral to committee(s)
3. Committee hearings
4. Committee mark-up
5. Committee report
6. Scheduling legislation
7. House: special rules, suspension of the rules, or privileged
matter
8. Senate: unanimous consent agreements or motions to proceed
9. Floor debate
10. Floor amendment
11. Vote on final passage
12. Reconciling differences between the house and senate
13. Amendments between the houses, or
14. Conference committee negotiations
15. Floor debate on conference report
16. Floor vote on conference report
17. Conference version presented to the president
18. President signs into law or allows bill to become law without
his signature
19. President vetoes bill
20. First chamber vote on overriding veto
21. Second chamber vote on overriding veto
22. Bill becomes law if 2/3 vote to override is achieved in both
chambers
23. Bill fails to become law if one chamber fails to override
Useful website:
www.thomas.gov
THOMAS was launched in January of 1995, at the inception of the
104th Congress. The 104th Congress directed
the Library of Congress to make federal legislative information
freely available to the public. Since that time THOMAS has
expanded the scope of its offerings to include the features and
content listed below.
What You Can Find on THOMAS
Bills, Resolutions
Bill Summary & Status contains information about bills and
amendments.
The summary and status information includes: sponsor(s);
cosponsor(s); official, short and popular titles; floor/executive
actions; detailed legislative history; Congressional Record page
references; bill summary; committees of referral; reporting and
origin; subcommittees of referral; links to other committee
information provided by the House of Representatives; amendment
descriptions (and text, when available); subjects (indexing terms
assigned to each bill); a link to the full text versions and if
the bill has been enacted into law, a link to the full text of the
law on the Government Printing Office Web site (in both text and
.PDF formats).
Bill Summary & Status information is
searchable by word/phrase, subject (index) term, bill/amendment
number, stage in the legislative process, dates of introduction,
sponsor/cosponsor and committee.
The full text of bills can be
searched across multiple Congresses.
Coverage: 101st (1989) through current Congress
Public Laws by Law Number
This feature contains Bill Summary & Status records for each bill
that became public law. Laws are listed both by law number order
and in bill number sequence (House Joint Resolutions, House Bills,
Senate Joint Resolutions, Senate Bills).
Do you know it?
Sarbanes Oxley Act, Section 304 -- Forfeiture of Certain Bonuses
and Profits
A. Additional Compensation Prior to Noncompliance With
Commission Financial Reporting Requirements.
If an issuer is required to prepare an accounting restatement due
to the material noncompliance of the issuer,
as a result of misconduct, with any financial reporting
requirement under the securities laws, the chief executive officer
and chief financial officer of the issuer shall reimburse the
issuer for--
1. Any bonus or other incentive-based or equity-based compensation
received by that person from the issuer during the 12-month
period following the first public issuance or filing with the
Commission (whichever first occurs) of the financial document
embodying such financial reporting requirement; and
2. Any profits realized from the sale of
securities of the issuer during that 12-month period.
B. Commission Exemption Authority. The Commission may exempt any
person from the application of subsection (a), as it deems
necessary and appropriate.
Breaking news
On July 22, 2009, the Securities and Exchange Commission brought
an action, under Section 304 of the Sarbanes-Oxley Act, seeking to
compel a former CEO to reimburse his company and its shareholders
more than USD4 million that he received in bonuses and stock sale
profits while the company was committing accounting fraud.
The SEC made clear that "personal compensation received by CEOs
while the companies they serve engage in wrongdoing can be clawed
back."
SECURITIES AND EXCHANGE COMMISSION,
Plaintiff, vs. ***, Defendant.
Plaintiff Securities and Exchange Commission (the "Commission")
alleges as follows:
SUMMARY
By this action, the Commission seeks an order from this Court,
pursuant to Section 304 of the Sarbanes-Oxley Act, requiring ***,
former chairman and chief executive officer of *** to
reimburse the company for all of his bonuses
and other incentive-based and equity-based compensation, and all
of his profits realized from his sale of company's stock,
during the 12-month period following the issuance of the company's
financial statements contained in its annual reports for fiscal
years 2002, 2003 and 2004, all of which were required to be
restated, not once, but twice, as a result of fraudulent conduct.
Dear member,
Write in your CV, resume, websites etc. that
you are member of the Sarbanes Oxley Compliance Professionals
Association.
Take advantage of
the distance learning and online certification program of our
Association - at a cost that is unheard of.
www.sarbanes-oxley-association.com/Distance_Learning_and_Certification.htm
Best
Regards,
George Lekatis
President of the Sarbanes Oxley
Compliance Professionals Association
General Manager, Compliance
LLC
1200 G Street NW Suite 800, Washington DC 20005, USA
Tel: (202) 449-9750
Email: lekatis@sarbanes-oxley-association.com
Web:
www.sarbanes-oxley-association.com
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