SOX Fraud And Whistleblower, Section 802,902,906

SOX sections 806, 902 and 906 were enacted in an attempt to hold individuals responsible for fraudulent acts associated with financial reporting. Sections 806, 902 and 906 of the Sarbanes-Oxley act all have critical implications to companies working to comply with the Act.  In fact, many people would contest that the topics addressed in these sections go to the heart of why the legislation was established – because of the instances of corporate miss-deeds. Let us have a brief introduction about each sections:

1. Section 802: It provides protection for employees of publicly traded companies who provide evidence of fraud and requires an investigation to be conducted after a complaint is filed  
2. Section 902: It provides broadly that any attempt or conspiracy to commit a criminal fraud offense will be subject to the same penalties as if the attempt or conspiracy had succeeded
3. Section 906: It requires that public companies include a specific written certification of the Chief Executive Officer and Chief Financial Officer in each periodic report containing financial statements. It addresses criminal penalties for certifying a misleading or fraudulent financial report

According to the Wall Street Journal, the SEC’s whistleblower program has generated tips from more than 6,500 people from at least 68 countries.  Resulted in more than $150 million in restitution and fines and more than $15 million in bounty payments to the whistleblowers. 

Each of these acts address specific criteria to protect whistleblowers and help bring confidence and assurance to investors through requirements of certifications, specification of penalties for non-compliance and protection for whistleblowers.

Major topics covered in this online CPE webinar:

SOX 806 -Protection for employees of publicly traded companies who provide evidence of fraud. 

• Background/ Expectations/Lawsuits
• Dodd Frank
• Sox 902 –attempts/conspiracies to commit criminal fraud. 

SOX 906 - criminal penalties for certifying a misleading or fraudulent financial report. 

• Background/Court Cases
• Section 906 vs. 302

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