Criminal Charges in Corporate Scandals
Released: 2006-05-30T00:00:00

Summary:
Since the collapse of Enron Corp. in late 2001, there has been a series of scandals involvingmajor U.S. corporations. Recurring elements in the scandals include improper or fraudulentaccounting, self-enrichment by corporate officers, stock trading on inside information (insidertrading), and the destruction or falsification of business records. A number of cases have resultedin criminal indictments, some followed by guilty pleas. This report tracks post-Enron criminalcharges. Companies are listed alphabetically, and individuals who have been charged, indicted, orhave pleaded guilty are identified. A longer list of companies with recent accounting problems (notall of which have resulted in criminal indictments) may be found in CRS Report RS21269 , Accounting Problems Reported in Major Companies Since Enron , by [author name scrubbed].
The 107th Congress responded to the series of corporate scandals that began with Enron bypassing the Sarbanes-Oxley Act of 2002. That law created a new oversight body for corporateauditors, imposed new disclosure requirements on corporations, including a mandate that CEOspersonally certify the accuracy of their firms' public financial reports, and increased criminalpenalties for a number of offenses related to securities fraud. For a summary of the legislation, see CRS Report RL31554 , Corporate Accountability: Sarbanes-Oxley Act of 2002 (P.L.107-204) , by [author name scrubbed] and [author name scrubbed].
This report will be updated regularly.

subsections: section_title: Introduction
paragraphs: On July 30, 2002, President Bush signed into law the Sarbanes-Oxley Act of 2002, P.L.107-204 , which had its genesis early in 2002 after the declared bankruptcy of Enron Corporation. The act establishes a new regulator for corporate auditors, the Public Company AccountingOversight Board, which is to be supervised by the Securities and Exchange Commission. The actrestricts accounting firms from performing a number of other services for the companies they auditand requires new disclosures for public companies and the officers and directors of those companies. Other issues affected by the new legislation are securities fraud, criminal and civil penalties forviolating the securities laws and other laws, blackout periods for insider trades of pension fundshares, and protections for corporate whistleblowers.
The ongoing criminal prosecutions are a complementary phase of the effort to improvecorporate accountability. Many observers maintain that prosecution of individuals alleged to haveabused the public trust, together with new legal and regulatory standards for corporate behavior, iscrucial to restoring investor confidence in the fairness and transparency of the public securitiesmarkets. Table 1 identifies firms and individuals associated with a number of high-profile casesagainst whom criminal charges have been filed by federal prosecutors since the collapse of EnronCorp. (although in some cases the alleged misconduct occurred before Enron's fall). In addition tonewspaper sources, Department of Justice press releases have been cited where available. See http://www.usdoj.gov/03press/03_1_1.html . 
A few of these cases, as noted in the table, have also resulted in civil indictments. Thesepost-Enron criminal charges are listed in CRS Report RL31961 , Civil Charges in CorporateScandals , by [author name scrubbed] and [author name scrubbed].
 Table 1. List of Charges, Indictments, and Guilty Pleas in Corporate Scandals Since Enron 
Note: A few of these cases have also resulted in civil indictments. 
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