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Sarbanes-Oxley for Entrepreneurs


The Sarbanes-Oxley Act: Title IX-XI

Written by Bennet Grill for Gaebler Ventures

In our final article reviewing the Sarbanes-Oxley Act, we focus on Titles IX-XI. Respectively, these sections of the Act deal with White-Collar Crime Penalty Enhancements, Corporate Tax Returns, and Corporate Fraud And Accountability.

The ninth, tenth, and eleventh titles of the Sarbanes-Oxley Act are concerned with white collar crime, corporate tax returns, and corporate fraud.
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Title IX, also known as the "White-Collar Crime Penalty Enhancement Act of 2002" reviews the rules and penalties regarding offenses considered white-collar crime. It begins with elevating the status of attempt and conspiracy to the same level as a completed action— it dictates that the penalties prescribed for the attempt and conspiracy of an offense shall be the same as the penalties for the offense itself.

This title increases penalties for various forms of fraud—mail and wire fraud carries a maximum sentence of 20 years, up from five, and violations of the Employee Retirement Income Security Act of 1974 carry an increased maximum fine of $500,000 from $100,000 and a imprisonment sentence of up to ten years, up from one year. Title nine then issues a mandate for a general review of the sentencing guidelines regarding white-collar offenses and requires corporate officers to certify financial reports.

Title ten of the Sarbanes-Oxley Act is the shortest of all titles, and simply states that:

It is the sense of the Senate that the Federal income tax return of a corporation should she signed by the chief executive officer of such corporation.

Title eleven is also known as the "Corporate Fraud Accountability Act of 2002" and reviews additional guidelines regarding the rules and punishments concerned with fraudulent corporate activities.

This title gives the commission authority to freeze the funds of a company suspected of committing violations of securities laws. The funds can be held in an interest bearing escrow account until a full investigation is able to be completed.

This title also grants the Commission the authority of prohibiting a person from serving as a director or officer of a securities issuer if a cease-and-desist proceeding is filed concerning the violations of securities law. The Commission may bar a person from such activities as long as "the conduct of that person demonstrates unfitness to serve as an officer or director of any such issuer."

The last three titles of the Sarbanes-Oxley Act serve to outline stricter accountability policies to corporate officers and directors of securities issuers and institute harsher penalties for violations of securities laws and instances of corporate fraud.

The Sarbanes-Oxley Series -- Learn More About Sarbox

The Sarbanes-Oxley Act: An Introduction
The Sarbanes-Oxley Act: Title I
The Sarbanes-Oxley Act: Title II
The Sarbanes-Oxley Act: Title III—Audit Committees
The Sarbanes-Oxley Act: Title III—Blackout Periods
The Sarbanes-Oxley Act: Title IV
The Sarbanes-Oxley Act: Title V
The Sarbanes-Oxley Act: Title VI
The Sarbanes-Oxley Act: Title VII—Accounting Firms
The Sarbanes-Oxley Act: Title VII— Past Violators
The Sarbanes-Oxley Act: Title VIII
The Sarbanes-Oxley Act: Title IX-XI

Bennet Grill is a writer who has a passion for business and finance. He is currently an Economics major at Duke University in North Carolina.

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