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

Introduction

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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