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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Dealer who wrote (53884)	7/15/2002 11:17:37 PM
From: stockman_scott	Respond to of 65232

U.S Senate passes business fraud bill; Bush praises `tough' bill By MARCY GORDON AP Business Writer Monday July 15, 11:06 pm Eastern Time WASHINGTON (AP) -- Without dissent, the U.S. Senate approved the most sweeping changes in corporate accountability since the Depression, creating stiff penalties and jail terms for company fraud and tightening oversight of the accounting industry. The Senate voted 97-0 Monday to pass the bipartisan bill after nearly a week of debate and votes on amendments as a string of corporate accounting scandals shattered confidence in business and the markets and threatened the fragile economic recovery. In a separate speech, President George W. Bush told business leaders, "We intend to hold people accountable." "We can't pass a law that says, `You will be honest,'" the president said at the University of Alabama at Birmingham. "We can pass laws that say, `If you're not honest we'll get you.'" Bush urged Congress to get him a bill to sign before adjourning for its summer recess. "I am pleased the Senate has now acted on a tough bill that shares my goals," Bush said in a statement issued after the vote. "We owe it to America's workers and shareholders to crack down on wrongdoing and fix the system to prevent future abuses." Work was to begin Tuesday to resolve the differences between the bill in the Democratic-controlled Senate and a version passed in April by the Republican-led House, said John Feehery, a spokesman for House Speaker Dennis Hastert. The House measure is widely considered weaker because it lacks penalties for corporate fraud and does not go as far toward reigning in accountants. In rare shows of unanimity, senators voted last week to add a series of new penalties, including 10-year prison terms for securities fraud. Chief executive officers and chief financial officers who certified false company financial reports would be slapped with prison terms of five to 10 years and fines of $500,000 to $1 million. In his Birmingham address, Bush coupled an upbeat assessment of the economy with a warning to corporate leaders to "behave responsibly" in an attempt to restore market confidence. Nevertheless, the markets dropped even further after his remarks. The Dow Jones industrials were down about 400 points in early-afternoon trading but rallied late in the session to close down 45 points. Bush has been dogged in recent weeks by a decade-old insider-trading investigation by the Securities and Exchange Commission into his $848,000 sale of stock in his former oil company, Harken Energy Corp., where he was a director. Additionally, U.S. Vice President Dick Cheney's former company, Halliburton Co., is being investigated by the SEC for its accounting practices while Cheney was its chief executive. The Senate bill would ban personal loans from companies to their top officials and directors, and would require company insiders to notify the SEC more promptly when they buy or sell company stock. The measure creates a new private-sector oversight board for the accounting industry with disciplinary powers, to replace the current system in which the industry polices itself. The legislation restricts a wide range of consulting and other nonauditing services that accounting firms would be allowed to provide to their audit clients, including bookkeeping, financial systems design and personnel and legal services. The move has been fiercely opposed by the accounting industry, a major contributor to lawmakers' campaign funds. Investor confidence has been shaken since a series of corporate accounting scandals, beginning with the collapse of Enron Corp. Its longtime auditor, Arthur Andersen LLP, recently was convicted of obstructing justice by shredding Enron audit documents. WorldCom Inc., Xerox Corp. and Global Crossing Ltd. also are under investigation.