102 MODULE 22 FEDERAL SECURITIES ACTS AND ANTITRUST LAW

18. Foreign Corrupt Practices Act

19. Unlawful for any domestic company or its officers or employees or agents to offer or give to for-
eign officials or to political party or political officials something of value to influence decisions
(1) Excluded are routine governmental actions that do not involve official's discretion such as
processing applications or permits,
(2) Amendment includes attempt by supplier to obtain any improper advantage is unlawful
20. Requires companies having registered securities to maintain system of internal control and to
maintairi accurate accounting and to protect integrity of independent audits
21. Actions of foreign citizens or organizations committed within US also covered
22. Regulation Fair Disclosure (Reg FD) from SEC requires corporation to disseminate its data
equally
among investors and analysts to help avoid conflicts of interest by analysts
23. If one mistakenly gives out inside information s/he must disclose it publicly as soon as is practica-
ble and always within 24 hours or less
24. Applies also to giving nonpublic information to shareholders who are likely to trade based upon it
25. Sarbanes-Oxley Act of 2002
26. New federal law that contains many reforms that affect this Module, Module 21, and other
selected
Modules
27. Act also directs SEC to conduct several studies and to promulgate regulations for corporations, ac-
counting profession, other professions, directors, officers that are expected to affect issues for
CPAexam
(1) New laws and new regulations are expected from this for at least the next few years=-each
new piece of information will be available when relevant for your preparation for
CPA exam
28. Act covers all public companies
29. Section 906 certification provision of Act requires that each periodic report that contains financial
re-
ports of the issuer must be accompanied with written statement of CEO or CFO that certifies that re-
ports comply fully with relevant securities laws and also fairly present the financial condition of com-
pany in all material aspects
30. Any officer who makes certification while knowing it does not comply with SEC requirements
can be fined up to $1,000,000 or imprisoned for up to ten years, or both
(1) Officers can be fined for up to $5,000,000 or imprisoned for up to twenty years, or both, for
willful violation of this certification requirement
(2) SEC now permitted to freeze payments to officers and directors during investigation of
wrongdoings
(3) SEC may now prevent unfit individuals from serving as officers or directors of public compa-
nies
31. CEO and CFO must give up any bonuses, incentive-based pay and profits on sales of stock that
they received during 12-month time before financial statements are required to be restated because
of omissions or misstatements of material facts .
.
32. Section 302 certification makes officers responsible for maintaining effective internal controls and
re-
quires principal executive and financial officers to disclose all significant internal control deficiencies
to issuer's auditors and audit committee
33. Management must now evaluate any changes in internal control methods
34. New rules prohibit officers and directors of an issuer or their agents from fraudulently influencing
or coercing auditors to render financial statements materially misleading
35. Act amends Securities Exchange Act of 1934 to make it illegal for issuer to give various types of
per-
sonalloans to or for any executive officer or director
36. CEO and CFO must give up any bonus, any compensation that is equity based or incentive based,
or
any profit from sale of corporation's securities during period when corporation was required to restate
financial statements due to wrongdoings