H. R. 3763—57
(b) CLERICAL AMENDMENT.—The table of sections at the begin-
ning of chapter 73 of title 18, United States Code, is amended
by adding at the end the following new items:
‘‘1519. Destruction, alteration, or falsification of records in Federal investigations
and bankruptcy.
‘‘1520. Destruction of corporate audit records.’’.
SEC. 803. DEBTS NONDISCHARGEABLE IF INCURRED IN VIOLATION
OF SECURITIES FRAUD LAWS.
Section 523(a) of title 11, United States Code, is amended—
(1) in paragraph (17), by striking ‘‘or’’ after the semicolon;
(2) in paragraph (18), by striking the period at the end
and inserting ‘‘; or’’; and
(3) by adding at the end, the following:
‘‘(19) that—
‘‘(A) is for—
‘‘(i) the violation of any of the Federal securities
laws (as that term is defined in section 3(a)(47) of
the Securities Exchange Act of 1934), any of the State
securities laws, or any regulation or order issued under
such Federal or State securities laws; or
‘‘(ii) common law fraud, deceit, or manipulation
in connection with the purchase or sale of any security;
and
‘‘(B) results from—
‘‘(i) any judgment, order, consent order, or decree
entered in any Federal or State judicial or administra-
tive proceeding;
‘‘(ii) any settlement agreement entered into by the
debtor; or
‘‘(iii) any court or administrative order for any
damages, fine, penalty, citation, restitutionary pay-
ment, disgorgement payment, attorney fee, cost, or
other payment owed by the debtor.’’.
SEC. 804. STATUTE OF LIMITATIONS FOR SECURITIES FRAUD.
(a) IN GENERAL.—Section 1658 of title 28, United States Code,
is amended—
(1) by inserting ‘‘(a)’’ before ‘‘Except’’; and
(2) by adding at the end the following:
‘‘(b) Notwithstanding subsection (a), a private right of action
that involves a claim of fraud, deceit, manipulation, or contrivance
in contravention of a regulatory requirement concerning the securi-
ties laws, as defined in section 3(a)(47) of the Securities Exchange
Act of 1934 (15 U.S.C. 78c(a)(47)), may be brought not later than
the earlier of—
‘‘(1) 2 years after the discovery of the facts constituting
the violation; or
‘‘(2) 5 years after such violation.’’.
(b) EFFECTIVE DATE.—The limitations period provided by sec-
tion 1658(b) of title 28, United States Code, as added by this
section, shall apply to all proceedings addressed by this section
that are commenced on or after the date of enactment of this
Act.
(c) NO CREATION OF ACTIONS.—Nothing in this section shall
create a new, private right of action.
H. R. 3763—58
SEC. 805. REVIEW OF FEDERAL SENTENCING GUIDELINES FOR
OBSTRUCTION OF JUSTICE AND EXTENSIVE CRIMINAL
FRAUD.
(a) ENHANCEMENT OF FRAUD AND OBSTRUCTION OF JUSTICE
SENTENCES.—Pursuant to section 994 of title 28, United States
Code, and in accordance with this section, the United States Sen-
tencing Commission shall review and amend, as appropriate, the
Federal Sentencing Guidelines and related policy statements to
ensure that—
(1) the base offense level and existing enhancements con-
tained in United States Sentencing Guideline 2J1.2 relating
to obstruction of justice are sufficient to deter and punish
that activity;
(2) the enhancements and specific offense characteristics
relating to obstruction of justice are adequate in cases where—
(A) the destruction, alteration, or fabrication of evi-
dence involves—
(i) a large amount of evidence, a large number
of participants, or is otherwise extensive;
(ii) the selection of evidence that is particularly
probative or essential to the investigation; or
(iii) more than minimal planning; or
(B) the offense involved abuse of a special skill or
a position of trust;
(3) the guideline offense levels and enhancements for viola-
tions of section 1519 or 1520 of title 18, United States Code,
as added by this title, are sufficient to deter and punish that
activity;
(4) a specific offense characteristic enhancing sentencing
is provided under United States Sentencing Guideline 2B1.1
(as in effect on the date of enactment of this Act) for a fraud
offense that endangers the solvency or financial security of
a substantial number of victims; and
(5) the guidelines that apply to organizations in United
States Sentencing Guidelines, chapter 8, are sufficient to deter
and punish organizational criminal misconduct.
(b) EMERGENCY AUTHORITY AND DEADLINE FOR COMMISSION
ACTION.—The United States Sentencing Commission is requested
to promulgate the guidelines or amendments provided for under
this section as soon as practicable, and in any event not later
than 180 days after the date of enactment of this Act, in accordance
with the prcedures set forth in section 219(a) of the Sentencing
Reform Act of 1987, as though the authority under that Act had
not expired.
SEC. 806. PROTECTION FOR EMPLOYEES OF PUBLICLY TRADED
COMPANIES WHO PROVIDE EVIDENCE OF FRAUD.
(a) IN GENERAL.—Chapter 73 of title 18, United States Code,
is amended by inserting after section 1514 the following:
‘‘§ 1514A. Civil action to protect against retaliation in fraud
cases
‘‘(a) WHISTLEBLOWER PROTECTION FOR EMPLOYEES OF PUBLICLY
TRADED COMPANIES.—No company with a class of securities reg-
istered under section 12 of the Securities Exchange Act of 1934
(15 U.S.C. 78l), or that is required to file reports under section
15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78o(d)),
H. R. 3763—59
or any officer, employee, contractor, subcontractor, or agent of such
company, may discharge, demote, suspend, threaten, harass, or
in any other manner discriminate against an employee in the terms
and conditions of employment because of any lawful act done by
the employee—
‘‘(1) to provide information, cause information to be pro-
vided, or otherwise assist in an investigation regarding any
conduct which the employee reasonably believes constitutes
a violation of section 1341, 1343, 1344, or 1348, any rule or
regulation of the Securities and Exchange Commission, or any
provision of Federal law relating to fraud against shareholders,
when the information or assistance is provided to or the inves-
tigation is conducted by—
‘‘(A) a Federal regulatory or law enforcement agency;
‘‘(B) any Member of Congress or any committee of
Congress; or
‘‘(C) a person with supervisory authority over the
employee (or such other person working for the employer
who has the authority to investigate, discover, or terminate
misconduct); or
‘‘(2) to file, cause to be filed, testify, participate in, or
otherwise assist in a proceeding filed or about to be filed
(with any knowledge of the employer) relating to an alleged
violation of section 1341, 1343, 1344, or 1348, any rule or
regulation of the Securities and Exchange Commission, or any
provision of Federal law relating to fraud against shareholders.
‘‘(b) ENFORCEMENT ACTION.—
‘‘(1) IN GENERAL.—A person who alleges discharge or other
discrimination by any person in violation of subsection (a) may
seek relief under subsection (c), by—
‘‘(A) filing a complaint with the Secretary of Labor;
or
‘‘(B) if the Secretary has not issued a final decision
within 180 days of the filing of the complaint and there
is no showing that such delay is due to the bad faith
of the claimant, bringing an action at law or equity for
de novo review in the appropriate district court of the
United States, which shall have jurisdiction over such an
action without regard to the amount in controversy.
‘‘(2) PROCEDURE.—
‘‘(A) IN GENERAL.—An action under paragraph (1)(A)
shall be governed under the rules and procedures set forth
in section 42121(b) of title 49, United States Code.
‘‘(B) EXCEPTION.—Notification made under section
42121(b)(1) of title 49, United States Code, shall be made
to the person named in the complaint and to the employer.
‘‘(C) BURDENS
OF
PROOF.—An action brought under
paragraph (1)(B) shall be governed by the legal burdens
of proof set forth in section 42121(b) of title 49, United
States Code.
‘‘(D) STATUTE OF LIMITATIONS.—An action under para-
graph (1) shall be commenced not later than 90 days after
the date on which the violation occurs.
‘‘(c) REMEDIES.—
‘‘(1) IN GENERAL.—An employee prevailing in any action
under subsection (b)(1) shall be entitled to all relief necessary
to make the employee whole.
H. R. 3763—60
‘‘(2) COMPENSATORY DAMAGES.—Relief for any action under
paragraph (1) shall include—
‘‘(A) reinstatement with the same seniority status that
the employee would have had, but for the discrimination;
‘‘(B) the amount of back pay, with interest; and
‘‘(C) compensation for any special damages sustained
as a result of the discrimination, including litigation costs,
expert witness fees, and reasonable attorney fees.
‘‘(d) RIGHTS RETAINED BY EMPLOYEE.—Nothing in this section
shall be deemed to diminish the rights, privileges, or remedies
of any employee under any Federal or State law, or under any
collective bargaining agreement.’’.
(b) CLERICAL AMENDMENT.—The table of sections at the begin-
ning of chapter 73 of title 18, United States Code, is amended
by inserting after the item relating to section 1514 the following
new item:
‘‘1514A. Civil action to protect against retaliation in fraud cases.’’.
SEC. 807. CRIMINAL PENALTIES FOR DEFRAUDING SHAREHOLDERS
OF PUBLICLY TRADED COMPANIES.
(a) IN GENERAL.—Chapter 63 of title 18, United States Code,
is amended by adding at the end the following:
‘‘§ 1348. Securities fraud
‘‘Whoever knowingly executes, or attempts to execute, a scheme
or artifice—
‘‘(1) to defraud any person in connection with any security
of an issuer with a class of securities registered under section
12 of the Securities Exchange Act of 1934 (15 U.S.C. 78l)
or that is required to file reports under section 15(d) of the
Securities Exchange Act of 1934 (15 U.S.C. 78o(d)); or
‘‘(2) to obtain, by means of false or fraudulent pretenses,
representations, or promises, any money or property in connec-
tion with the purchase or sale of any security of an issuer
with a class of securities registered under section 12 of the
Securities Exchange Act of 1934 (15 U.S.C. 78l) or that is
required to file reports under section 15(d) of the Securities
Exchange Act of 1934 (15 U.S.C. 78o(d));
shall be fined under this title, or imprisoned not more than 25
years, or both.’’.
(b) CLERICAL AMENDMENT.—The table of sections at the begin-
ning of chapter 63 of title 18, United States Code, is amended
by adding at the end the following new item:
‘‘1348. Securities fraud.’’.
TITLE IX—WHITE-COLLAR CRIME
PENALTY ENHANCEMENTS
SEC. 901. SHORT TITLE.
This title may be cited as the ‘‘White-Collar Crime Penalty
Enhancement Act of 2002’’.