Criminal Liability and the Dodd Frank Act

Question 1

Can the SEC bring criminal charges?

Answer 1

-No must refer them to DOJ

Question 2

What does SOX contain criminal provisions for?

Answer 2

• Willful failure to retain audit and review workpapers (public companies 7 yrs)
• Destruction of records
• Corrupt tampering with documents to be used in an official proceeding

Question 3

Although Dodd Frank’s impact on accountants is minor, what were its major accomplishments?

Answer 3

• Created Financial Stability Oversight Council
• Placed limits on proprietary trading by banks and their support of hedge funds
• Increased transparency in OTC markets
• Requires SEC registration of hedge funds
• Created Consumer Financial Protection Bureau
• Requires clawback of executive pay when there’s accounting restatement regardless of whether fraudulent or due to misconduct