[Congressional Record (Bound Edition), Volume 148 (2002), Part 9]
[Senate]
[Pages 12390-12394]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           TEXT OF AMENDMENTS

  SA 4174. Mr. DASCHLE (for Mr. Leahy (for himself, Mr. McCain, Mr. 
Daschle, Mr. Durbin, Mr. Harkin, Mr. Cleland, Mr. Levin, Mr. Kennedy, 
Mr. Biden, Mr. Feingold, Mr. Miller, Mr. Edwards, Mrs. Boxer, Mr. 
Corzine, Mr. Kerry, Mr. Schumer, Mr. Brownback, and Mr. Nelson of 
Florida)) proposed an amendment to the bill S. 2673, to improve quality 
and transparency in financial reporting and independent audits and 
accounting services for public companies, to create a Public Company 
Accounting Oversight Board, to enhance the standard setting process for 
accounting practices, to strengthen the independence of firms that 
audit public companies, to increase corporate responsibility and the 
usefulness of corporate financial disclosure to protect the objectivity 
and independence of securities analysts, to improve Securities and 
Exchange Commission resources and oversight, and for other purposes:

       On page 117, after line 12, add the following:

        TITLE VIII--CORPORATE AND CRIMINAL FRAUD ACCOUNTABILITY

     SEC. 801. SHORT TITLE.

       This title may be cited as the ``Corporate and Criminal 
     Fraud Accountability Act of 2002''.

     SEC. 802. CRIMINAL PENALTIES FOR ALTERING DOCUMENTS.

       (a) In General.--Chapter 73 of title 18, United States 
     Code, is amended by adding at the end the following:

     ``Sec. 1519. Destruction, alteration, or falsification of 
       records in Federal investigations and bankruptcy

       ``Whoever knowingly alters, destroys, mutilates, conceals, 
     covers up, falsifies, or makes a false entry in any record, 
     document, or tangible object with the intent to impede, 
     obstruct, or influence the investigation or proper 
     administration of any matter within the jurisdiction of any 
     department or agency of the United States or any case filed 
     under title 11, or in relation to or contemplation of any 
     such matter or case, shall be fined under this title, 
     imprisoned not more than 10 years, or both.

     ``Sec. 1520. Destruction of corporate audit records

       ``(a)(1) Any accountant who conducts an audit of an issuer 
     of securities to which section 10A(a) of the Securities 
     Exchange Act of 1934 (15 U.S.C. 78j-1(a)) applies, shall 
     maintain all audit or review workpapers for a period of 5 
     years from the end of the fiscal period in which the audit or 
     review was concluded.
       ``(2) The Securities and Exchange Commission shall 
     promulgate, within 180 days, after adequate notice and an 
     opportunity for comment, such rules and regulations, as are 
     reasonably necessary, relating to the retention of relevant 
     records such as workpapers, documents that form the basis of 
     an audit or review, memoranda, correspondence, 
     communications, other documents, and records (including 
     electronic records) which are created, sent, or received in 
     connection with an audit or review and contain conclusions, 
     opinions, analyses, or financial data relating to such an 
     audit or review, which is conducted by any accountant who 
     conducts an audit of an issuer of securities to which section 
     10A(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78j-
     1(a)) applies.
       ``(b) Whoever knowingly and willfully violates subsection 
     (a)(1), or any rule or regulation promulgated by the 
     Securities and Exchange Commission under subsection (a)(2), 
     shall be fined under this title, imprisoned not more than 5 
     years, or both.
       ``(c) Nothing in this section shall be deemed to diminish 
     or relieve any person of any other duty or obligation, 
     imposed by Federal or State law or regulation, to maintain, 
     or refrain from destroying, any document.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of chapter 73 of title 18, United States Code, is 
     amended by adding at the end the following new items:

``1519. Destruction, alteration, or falsification of records in Federal 
              investigations and bankruptcy.
``1520. Destruction of corporate audit records.''.

     SEC. 803. DEBTS NONDISCHARGEABLE IF INCURRED IN VIOLATION OF 
                   SECURITIES FRAUD LAWS.

       Section 523(a) of title 11, United States Code, is 
     amended--
       (1) in paragraph (17), by striking ``or'' after the 
     semicolon;
       (2) in paragraph (18), by striking the period at the end 
     and inserting ``; or''; and
       (3) by adding at the end, the following:
       ``(19) that--
       ``(A) arises under a claim relating to--
       ``(i) the violation of any of the Federal securities laws 
     (as that term is defined in section 3(a)(47) of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(47)), any 
     State securities laws, or any regulations or orders issued 
     under such Federal or State securities laws; or
       ``(ii) common law fraud, deceit, or manipulation in 
     connection with the purchase or sale of any security; and
       ``(B) results, in relation to any claim described in 
     subparagraph (A), from--
       ``(i) any judgment, order, consent order, or decree entered 
     in any Federal or State judicial or administrative 
     proceeding;
       ``(ii) any settlement agreement entered into by the debtor; 
     or
       ``(iii) any court or administrative order for any damages, 
     fine, penalty, citation, restitutionary payment, disgorgement 
     payment, attorney fee, cost, or other payment owed by the 
     debtor.''.

     SEC. 804. STATUTE OF LIMITATIONS FOR SECURITIES FRAUD.

       (a) In General.--Section 1658 of title 28, United States 
     Code, is amended--
       (1) by inserting ``(a)'' before ``Except''; and
       (2) by adding at the end the following:
       ``(b) Notwithstanding subsection (a), a private right of 
     action that involves a claim of fraud, deceit, manipulation, 
     or contrivance in contravention of a regulatory requirement 
     concerning the securities laws, as defined in section 
     3(a)(47) of the Securities Exchange Act of 1934 (15 U.S.C. 
     78c(a)(47)), may be brought not later than the earlier of--
       ``(1) 5 years after the date on which the alleged violation 
     occurred; or
       ``(2) 2 years after the date on which the alleged violation 
     was discovered.''.
       (b) Effective Date.--The limitations period provided by 
     section 1658(b) of title 28, United States Code, as added by 
     this section, shall apply to all proceedings addressed by 
     this section that are commenced on or after the date of 
     enactment of this Act.
       (c) No Creation of Actions.--Nothing in this section shall 
     create a new, private right of action.

     SEC. 805. REVIEW OF FEDERAL SENTENCING GUIDELINES FOR 
                   OBSTRUCTION OF JUSTICE AND EXTENSIVE CRIMINAL 
                   FRAUD.

       Pursuant to section 994 of title 28, United States Code, 
     and in accordance with this section, the United States 
     Sentencing Commission shall review and amend, as appropriate,

[[Page 12391]]

     the Federal Sentencing Guidelines and related policy 
     statements to ensure that--
       (1) the base offense level and existing enhancements 
     contained in United States Sentencing Guideline 2J1.2 
     relating to obstruction of justice are sufficient to deter 
     and punish that activity;
       (2) the enhancements and specific offense characteristics 
     relating to obstruction of justice are adequate in cases 
     where--
       (A) documents and other physical evidence are actually 
     destroyed, altered, or fabricated;
       (B) the destruction, alteration, or fabrication of evidence 
     involves--
       (i) a large amount of evidence, a large number of 
     participants, or is otherwise extensive;
       (ii) the selection of evidence that is particularly 
     probative or essential to the investigation; or
       (iii) more than minimal planning; or
       (C) the offense involved abuse of a special skill or a 
     position of trust;
       (3) the guideline offense levels and enhancements for 
     violations of section 1519 or 1520 of title 18, United States 
     Code, as added by this title, are sufficient to deter and 
     punish that activity;
       (4) the guideline offense levels and enhancements under 
     United States Sentencing Guideline 2B1.1 (as in effect on the 
     date of enactment of this Act) are sufficient for a fraud 
     offense when the number of victims adversely involved is 
     significantly greater than 50;
       (5) a specific offense characteristic enhancing sentencing 
     is provided under United States Sentencing Guideline 2B1.1 
     (as in effect on the date of enactment of this Act) for a 
     fraud offense that endangers the solvency or financial 
     security of a substantial number of victims; and
       (6) the guidelines that apply to organizations in United 
     States Sentencing Guidelines, chapter 8, are sufficient to 
     deter and punish organizational criminal misconduct.

     SEC. 806. PROTECTION FOR EMPLOYEES OF PUBLICLY TRADED 
                   COMPANIES WHO PROVIDE EVIDENCE OF FRAUD.

       (a) In General.--Chapter 73 of title 18, United States 
     Code, is amended by inserting after section 1514 the 
     following:

     ``Sec. 1514A. Civil action to protect against retaliation in 
       fraud cases

       ``(a) Whistleblower Protection for Employees of Publicly 
     Traded Companies.--No company with a class of securities 
     registered under section 12 of the Securities Exchange Act of 
     1934 (15 U.S.C. 78l), or that is required to file reports 
     under section 15(d) of the Securities Exchange Act of 1934 
     (15 U.S.C. 78o(d)), or any officer, employee, contractor, 
     subcontractor, or agent of such company, may discharge, 
     demote, suspend, threaten, harass, or in any other manner 
     discriminate against an employee in the terms and conditions 
     of employment because of any lawful act done by the 
     employee--
       ``(1) to provide information, cause information to be 
     provided, or otherwise assist in an investigation regarding 
     any conduct which the employee reasonably believes 
     constitutes a violation of section 1341, 1343, 1344, or 1348, 
     any rule or regulation of the Securities and Exchange 
     Commission, or any provision of Federal law relating to fraud 
     against shareholders, when the information or assistance is 
     provided to or the investigation is conducted by--
       ``(A) a Federal regulatory or law enforcement agency;
       ``(B) any Member of Congress or any committee of Congress; 
     or
       ``(C) a person with supervisory authority over the employee 
     (or such other person working for the employer who has the 
     authority to investigate, discover, or terminate misconduct); 
     or
       ``(2) to file, cause to be filed, testify, participate in, 
     or otherwise assist in a proceeding filed or about to be 
     filed (with any knowledge of the employer) relating to an 
     alleged violation of section 1341, 1343, 1344, or 1348, any 
     rule or regulation of the Securities and Exchange Commission, 
     or any provision of Federal law relating to fraud against 
     shareholders.
       ``(b) Enforcement Action.--
       ``(1) In general.--A person who alleges discharge or other 
     discrimination by any person in violation of subsection (a) 
     may seek relief under subsection (c), by--
       ``(A) filing a complaint with the Secretary of Labor; or
       ``(B) if the Secretary has not issued a final decision 
     within 180 days of the filing of the complaint and there is 
     no showing that such delay is due to the bad faith of the 
     claimant, bringing an action at law or equity for de novo 
     review in the appropriate district court of the United 
     States, which shall have jurisdiction over such an action 
     without regard to the amount in controversy.
       ``(2) Procedure.--
       ``(A) In general.--An action under paragraph (1)(A) shall 
     be governed under the rules and procedures set forth in 
     section 42121(b) of title 49, United States Code.
       ``(B) Exception.--Notification made under section 
     42121(b)(1) of title 49, United States Code, shall be made to 
     the person named in the complaint and to the employer.
       ``(C) Burdens of proof.--An action brought under paragraph 
     (1)(B) shall be governed by the legal burdens of proof set 
     forth in section 42121(b) of title 49, United States Code.
       ``(D) Statute of limitations.--An action under paragraph 
     (1) shall be commenced not later than 90 days after the date 
     on which the violation occurs.
       ``(c) Remedies.--
       ``(1) In general.--An employee prevailing in any action 
     under subsection (b)(1) shall be entitled to all relief 
     necessary to make the employee whole.
       ``(2) Compensatory damages.--Relief for any action under 
     paragraph (1) shall include--
     ``(A) reinstatement with the same seniority status that the 
     employee would have had, but for the discrimination;
       ``(B) the amount of back pay, with interest; and
       ``(C) compensation for any special damages sustained as a 
     result of the discrimination, including litigation costs, 
     expert witness fees, and reasonable attorney fees.
       ``(d) Rights Retained by Employee.--Nothing in this section 
     shall be deemed to diminish the rights, privileges, or 
     remedies of any employee under any Federal or State law, or 
     under any collective bargaining agreement.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of chapter 73 of title 18, United States Code, is 
     amended by inserting after the item relating to section 1514 
     the following new item:

``1514A. Civil action to protect against retaliation in fraud cases.''.

     SEC. 807. CRIMINAL PENALTIES FOR DEFRAUDING SHAREHOLDERS OF 
                   PUBLICLY TRADED COMPANIES.

       (a) In General.--Chapter 63 of title 18, United States 
     Code, is amended by adding at the end the following:

     ``Sec. 1348. Securities fraud

       ``Whoever knowingly executes, or attempts to execute, a 
     scheme or artifice--
       ``(1) to defraud any person in connection with any security 
     of an issuer with a class of securities registered under 
     section 12 of the Securities Exchange Act of 1934 (15 U.S.C. 
     78l) or that is required to file reports under section 15(d) 
     of the Securities Exchange Act of 1934 (15 U.S.C. 78o(d)); or
       ``(2) to obtain, by means of false or fraudulent pretenses, 
     representations, or promises, any money or property in 
     connection with the purchase or sale of any security of an 
     issuer with a class of securities registered under section 12 
     of the Securities Exchange Act of 1934 (15 U.S.C. 78l) or 
     that is required to file reports under section 15(d) of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78o(d));
     shall be fined under this title, or imprisoned not more than 
     10 years, or both.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of chapter 63 of title 18, United States Code, is 
     amended by adding at the end the following new item:

``1348. Securities fraud.''.
                                  ____

  SA 4175. Mr. GRAMM (for Mr. McConnell) proposed an amendment to 
amendment SA 4174 proposed by Mr. Daschle (for Mr. Leahy (for himself, 
Mr. McCain, Mr. Daschle, Mr. Durbin, Mr. Harkin, Mr. Cleland, Mr. 
Levin, Mr. Kennedy, Mr. Biden, Mr. Feingold, Mr. Miller, Mr. Edwards, 
Mrs. Boxer, Mr. Corzine, Mr. Kerry, Mr. Schumer, Mr. Brownback, and Mr. 
Nelson of Florida)) to the bill (S. 2673) to improve quality and 
transparency in financial reporting and independent audits and 
accounting services for public companies, to create a Public Company 
Accounting Oversight Board, to enhance the standard setting process for 
accounting practices, to strengthen the independence of firms that 
audit public companies, to increase corporate responsibility and the 
usefulness of corporate financial disclosure, to protect the 
objectivity and independence of securities analysts, to improve 
Securities and Exchange Commission resources and oversight, and for 
other purposes:

       At the end of the amendment add the following:

     SEC. 302. CORPORATE AND LABOR ORGANIZATION RESPONSIBILITY FOR 
                   FINANCIAL REPORTS AND DISCLOSURE REQUIREMENTS.

       (a) Financial Reports.--
       (1) Certification of reports.--
       (A) Certification of periodic reports.--Each periodic 
     report containing financial statements filed by an issuer 
     with the Commission pursuant to section 13(a) or 15(d) of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)) 
     shall be accompanied by a written statement by the chief 
     executive officer and chief financial officer (or the 
     equivalent thereof) of the issuer.
       (B) Certification of financial reports by labor 
     organizations.--
       (i) In general.--Each financial report filed by a labor 
     organization with the Secretary of Labor pursuant to section 
     201(b) of the Labor-Management Reporting and Disclosure Act 
     of 1959 (29 U.S.C. 431(b)) shall be accompanied by a written 
     statement by the president and secretary-treasurer (or the 
     equivalent thereof) of the labor organization.

[[Page 12392]]

       (ii) Definition.--In this subparagraph, the term ``labor 
     organization'' has the meaning given the term in section 3 of 
     the Labor-Management Reporting and Disclosure Act of 1959 (29 
     U.S.C. 402).
       (2) Content.--The statement required by paragraph (1) shall 
     certify the appropriateness of the financial statements and 
     disclosures contained in the periodic report or financial 
     report, and that those financial statements and disclosures 
     fairly present, in all material respects, the operations and 
     financial condition of the issuer or labor organization.
       (3) Conforming amendment.--Section 201(b) of the Labor-
     Management Reporting and Disclosure Act of 1959 is amended, 
     in the matter preceding paragraph (1), by inserting ``(and 
     accompanied by the statement described in section 
     302(a)(1)(B) of the Public Company Accounting Reform and 
     Investor Protection Act of 2002)'' after ``officers''.
       (b) Reporting Requirements.--
       (1) Financial reporting for labor organizations equivalent 
     to required reporting of public companies.--Section 201 of 
     the Labor-Management Reporting and Disclosure Act of 1959 (29 
     U.S.C. 431) is amended by adding at the end the following:
       ``(d)(1) In the case of a labor organization with gross 
     annual receipts for the fiscal year in an amount equal to 
     $200,000 or more, the information required under this section 
     shall be reported using financial reporting procedures 
     comparable to procedures required for periodic and annual 
     reports of public companies pursuant to sections 12(g), 13, 
     and 15 of the Securities and Exchange Act of 1934 (15 U.S.C. 
     78l(g), 78m, and 78o).
       ``(2)(A) Such information shall be reviewed by a certified 
     public accountant using generally accepted auditing standards 
     applicable to reporting companies under the Securities and 
     Exchange Act of 1934.
       ``(B) Such audit shall be conducted subject to requirements 
     comparable to the requirements under section 10A of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78j-1).
       ``(3) Such information shall be reported using generally 
     accepted accounting procedures comparable to the procedures 
     required for public companies under sections 12(g), 13, and 
     15 of the Securities and Exchange Act of 1934 (15 U.S.C. 
     78l(g), 78m, and 78o).
       ``(4) The authority provided under this subsection shall be 
     in addition to the authority provided under subsection (b) 
     and section 208, regarding reporting procedures and review of 
     information required under this section.''.
       (2) Remedies and penalties for violations of reporting 
     requirements.--Section 210 of the Labor-Management Reporting 
     and Disclosure Act of 1959 (29 U.S.C. 440) is amended--
       (A) by striking ``Whenever'' and inserting ``(a) 
     Whenever''; and
       (B) by adding at the end the following:
       ``(b)(1) If the Secretary finds, on the record after notice 
     and opportunity for hearing, that any person has willfully 
     violated any provision of section 201(d), the Secretary may 
     impose a civil monetary penalty in an amount not to exceed 
     the amount for any comparable violation under section 21B(b) 
     of the Securities Exchange Act of 1934 (15 U.S.C. 78u-2).
       ``(2) In the case of a violation of an auditing requirement 
     under section 201(d)(2) by a public accountant, the Secretary 
     may impose a civil monetary penalty in the same manner as 
     penalties are imposed under section 10A(d) of the Securities 
     Exchange Act of 1934 (15 U.S.C. 78j-1(d)).
       ``(3) For purposes of any action brought by the Secretary 
     under paragraph (1), any person who knowingly provides 
     substantial assistance to another person in violation of a 
     provision of section 201(d), or of any rule or regulation 
     issued under such section (including aiding, abetting, 
     counseling, commanding, or inducing such violation) shall be 
     deemed to be in violation of such provision to the same 
     extent as the person to whom such assistance is provided.
       ``(c)(1) Any person who makes or causes to be made any 
     statement in any report or document required to be filed 
     under section 201(d) which statement was at the time, and in 
     the light of the circumstances under which it was made, false 
     or misleading with respect to any material fact, shall be 
     liable to any person (not knowing that such statement was 
     false or misleading) who relied upon such statement. A person 
     seeking to enforce such liability may sue at law or in equity 
     in any court of competent jurisdiction.
       ``(2) In any such suit the court may, in its discretion, 
     require an undertaking for the payment of the costs of such 
     suit, and assess reasonable costs, including reasonable 
     attorneys' fees, against either party litigant.
       ``(3) The recovery and statute of limitation provisions of 
     subsections (b) and (c) of section 18 of the Securities 
     Exchange Act of 1934 (15 U.S.C. 78r) shall apply for purposes 
     of any action under this subsection.
       ``(d) In any action arising under subsection (c) or (d) or 
     in connection with any provision of section 201(d), the 
     provisions of section 27(c) of the Securities Act of 1933 (15 
     U.S.C. 77z-1(c)) regarding abusive litigation shall apply.''.
       (3) Regulations.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary of Labor, shall 
     promulgate such regulations as the Secretary determines 
     necessary to carry out the provisions and purposes of this 
     subsection (including the amendments made by this subsection) 
     and to ensure the provisions of this subsection are carried 
     out in a manner comparable to the manner any similar 
     provisions are carried out by the Securities and Exchange 
     Commission.
                                  ____

  SA 4176. Mr. MILLER proposed an amendment to the bill S. 2673, to 
improve quality and transparency in financial reporting and independent 
audits and accounting services for public companies, to create a Public 
Company Accounting Oversight Board, to enhance the standard setting 
process for accounting practices, to strengthen the independence of 
firms that audit public companies, to increase corporate responsibility 
and the usefulness of corporate financial disclosure, to protect the 
objectivity and independence of securities analysts, to improve 
Securities and Exchange Commission resources and oversight, and for 
other purposes; as follows:

       At the end add the following new title:

                   TITLE VIII--CORPORATE TAX RETURNS

     SEC. 801. SIGNING OF CORPORATE TAX RETURNS BY CHIEF EXECUTIVE 
                   OFFICER.

       (a) In General.--Section 6062 of the Internal Revenue Code 
     of 1986 (relating to signing of corporation returns) is 
     amended by striking the first sentence and inserting the 
     following new sentence: ``The return of a corporation with 
     respect to income shall be signed by the chief executive 
     officer of such corporation.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to returns filed after the date of the enactment 
     of this Act.
                                  ____

  SA 4177. Mr. GRASSLEY submitted an amendment intended to be proposed 
by him to the bill S. 2673, to improve quality and transparency in 
financial reporting and independent audits and accounting services for 
public companies, to create a Public Company Accounting Oversight 
Board, to enhance the standard setting process for accounting 
practices, to strengthen the independence of firms that audit public 
companies, to increase corporate responsibility and the usefulness of 
corporate financial disclosure, to protect the objectivity and 
independence of securities analysts, to improve Securities and Exchange 
Commission resources and oversight, and for other purposes; as follows:

       At the appropriate place, insert the following:

     SEC. __. PROTECTION FOR EMPLOYEES OF PUBLICLY TRADED 
                   COMPANIES WHO PROVIDE EVIDENCE OF FRAUD.

       (a) In General.--Chapter 73 of title 18, United States 
     Code, is amended by inserting after section 1514 the 
     following:

     ``Sec. 1514A. Civil action to protect against retaliation in 
       fraud cases

       ``(a) Whistleblower Protection for Employees of Publicly 
     Traded Companies.--No company with a class of securities 
     registered under section 12 of the Securities Exchange Act of 
     1934 (15 U.S.C. 78l), or that is required to file reports 
     under section 15(d) of the Securities Exchange Act of 1934 
     (15 U.S.C. 78o(d)), or any officer, employee, contractor, 
     subcontractor, or agent of such company, may discharge, 
     demote, suspend, threaten, harass, or in any other manner 
     discriminate against an employee in the terms and conditions 
     of employment because of any lawful act done by the 
     employee--
       ``(1) to provide information, cause information to be 
     provided, or otherwise assist in an investigation regarding 
     any conduct which the employee reasonably believes 
     constitutes a violation of section 1341, 1343, 1344, or 1348, 
     any rule or regulation of the Securities and Exchange 
     Commission, or any provision of Federal law relating to fraud 
     against shareholders, when the information or assistance is 
     provided to or the investigation is conducted by--
       ``(A) a Federal regulatory or law enforcement agency;
       ``(B) any Member of Congress or any committee of Congress; 
     or
       ``(C) a person with supervisory authority over the employee 
     (or such other person working for the employer who has the 
     authority to investigate, discover, or terminate misconduct); 
     or
       ``(2) to file, cause to be filed, testify, participate in, 
     or otherwise assist in a proceeding filed or about to be 
     filed (with any knowledge of the employer) relating to an 
     alleged violation of section 1341, 1343, 1344, or 1348, any 
     rule or regulation of the Securities and Exchange Commission, 
     or any provision of Federal law relating to fraud against 
     shareholders.
       ``(b) Enforcement Action.--
       ``(1) In general.--A person who alleges discharge or other 
     discrimination by any person in violation of subsection (a) 
     may seek relief under subsection (c), by--

[[Page 12393]]

       ``(A) filing a complaint with the Secretary of Labor; or
       ``(B) if the Secretary has not issued a final decision 
     within 180 days of the filing of the complaint and there is 
     no showing that such delay is due to the bad faith of the 
     claimant, bringing an action at law or equity for de novo 
     review in the appropriate district court of the United 
     States, which shall have jurisdiction over such an action 
     without regard to the amount in controversy.
       ``(2) Procedure.--
       ``(A) In general.--An action under paragraph (1)(A) shall 
     be governed under the rules and procedures set forth in 
     section 42121(b) of title 49, United States Code.
       ``(B) Exception.--Notification made under section 
     42121(b)(1) of title 49, United States Code, shall be made to 
     the person named in the complaint and to the employer.
       ``(C) Burdens of proof.--An action brought under paragraph 
     (1)(B) shall be governed by the legal burdens of proof set 
     forth in section 42121(b) of title 49, United States Code.
       ``(D) Statute of limitations.--An action under paragraph 
     (1) shall be commenced not later than 90 days after the date 
     on which the violation occurs.
       ``(c) Remedies.--
       ``(1) In general.--An employee prevailing in any action 
     under subsection (b)(1) shall be entitled to all relief 
     necessary to make the employee whole.
       ``(2) Compensatory damages.--Relief for any action under 
     paragraph (1) shall include--
       ``(A) reinstatement with the same seniority status that the 
     employee would have had, but for the discrimination;
       ``(B) the amount of back pay, with interest; and
       ``(C) compensation for any special damages sustained as a 
     result of the discrimination, including litigation costs, 
     expert witness fees, and reasonable attorney fees.
       ``(d) Rights Retained by Employee.--Nothing in this section 
     shall be deemed to diminish the rights, privilege, or 
     remedies of any employee under any Federal or State law, or 
     under any collective bargaining agreement.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of chapter 73 of title 18, United States Code, is 
     amended by inserting after the item relating to section 1514 
     the following new item:

``1514A. Civil action to protect against retaliation in fraud cases.''.
                                  ____

  SA 4178. Mr. GRASSLEY submitted an amendment intended to be proposed 
by him to the bill S. 2673, to improve quality and transparency in 
financial reporting and independent audits and accounting services for 
public companies, to create a Public Company Accounting Oversight 
Board, to enhance the standard setting process for accounting 
practices, to strengthen the independence of firms that audit public 
companies, to increase corporate responsibility and the usefulness of 
corporate financial disclosure, to protect the objectivity and 
independence of securities analysts, to improve Securities and Exchange 
Commission resources and oversight, and for other purposes; which was 
ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. INVESTIGATION AND PROSECUTION OF OFFENSES.

       Section 21(d) of the Securities Exchange Act of 1934 (15 
     U.S.C. 78u(d)) is amended by adding at the end the following:
       ``(5) Equitable relief.--In any action brought by the 
     Commission under any provision of the securities laws against 
     any person, the Commission may seek, and Federal courts may 
     grant, any equitable relief appropriate or necessary for the 
     benefit of investors.
       ``(6) Disgorgement of benefits.--In any action or 
     proceeding brought or instituted by the Commission under the 
     securities laws against any person for engaging in, causing, 
     or aiding and abetting any violation of the securities laws 
     or the rules and regulations prescribed under those laws, 
     such person, in addition to being subject to any other 
     appropriate order, may be required to disgorge any or all 
     benefits received from any source in connection with the 
     conduct constituting, causing, or aiding and abetting the 
     violation, including salary, commissions, fees, bonuses, 
     options, profits from securities transactions, and losses 
     avoided through securities transactions.''.
                                  ____

  SA 4179. Mr. GRASSLEY submitted an amendment intended to be proposed 
by him to the bill S. 2673, to improve quality and transparency in 
financial reporting and independent audits and accounting services for 
public companies, to create a Public Company Accounting Oversight 
Board, to enhance the standard setting process for accounting 
practices, to strengthen the independence of firms that audit public 
companies, to increase corporate responsibility and the usefulness of 
corporate financial disclosure, to protect the objectivity and 
independence of securities analysts, to improve Securities and Exchange 
Commission resources and oversight, and for other purposes; which was 
ordered to lie on the table; as follows:

       On page 68, between lines 14 and 15, insert the following:

     SEC. 110. OVERSIGHT AUDITING OF PUBLIC COMPANIES.

       (a) Establishment of Division.--There is established within 
     the Office of the Chief Accountant of the Commission, the 
     Division of Oversight Audits, which shall be charged with 
     responsibility for conducting oversight audits of issuers, at 
     such times, and in accordance with such procedures as the 
     Commission shall establish, by rule.
       (b) Structure and Oversight.--The Division of Oversight 
     Audits shall be headed by the Chief Accountant of the 
     Commission. Notwithstanding any other provision of law, 
     following the end of the term of employment of the Chief 
     Accountant in effect on the date of enactment of this Act, 
     the Chief Accountant shall be appointed by the President, 
     with the advice and consent of the Senate, and may be removed 
     at will by the President. The Chief Accountant shall be 
     appointed to a 5-year term, and may not serve for more than 2 
     terms.
       (c) Purpose, Functions, and Duties.--The Division of 
     Oversight Audits shall be responsible for--
       (1) reviewing and conducting oversight audits of the 
     financial statements of issuers; and
       (2) using its resources effectively to focus on highest 
     risk audit areas and to target questionable audit practices 
     of which the Division of Oversight Audits is aware from 
     communications with the Division of Enforcement of the 
     Commission and the Board.
       (d) Reports.--On an annual basis, the Division of Oversight 
     Audits shall report its findings and make recommendations for 
     change to--
       (1) the Commission;
       (2) the Board; and
       (3) the Comptroller General of the United States.
       (e) Referrals.--
       (1) In general.--The Division of Oversight Audits shall 
     refer findings of accounting or auditing irregularity to--
       (A) the Division of Enforcement of the Commission for 
     further investigation of the issuer or the public accounting 
     firm, as appropriate; and
       (B) the Board for further investigation of the public 
     accounting firm, as appropriate.
       (2) Other referrals.--If appropriate, the Division of 
     Oversight Audits may refer findings of accounting or auditing 
     irregularity to--
       (A) any other Federal functional regulator (as defined in 
     section 509 of the Gramm-Leach-Bliley Act (15 U.S.C. 6809)), 
     in the case of an audit report for an institution that is 
     subject to the jurisdiction of such regulator;
       (B) the Attorney General of the United States;
       (C) the attorneys general of 1 or more States; or
       (D) the appropriate State regulatory authority.
       (f) Funding.--
       (1) In general.--The Division of Oversight Audits shall be 
     funded exclusively as provided in this subsection.
       (2) Annual budgets.--The Division of Oversight Audits shall 
     establish a budget for each fiscal year, which shall be 
     subject to approval by the Commission.
       (3) Sources and uses of funds.--The budget of the Division 
     of Oversight Audits for each fiscal year shall be payable 
     from annual accounting support fees, in accordance with 
     paragraph (4).
       (4) Annual accounting support fee.--The annual accounting 
     support fee for the Division of Oversight Audits--
       (A) shall be allocated in accordance with paragraph (5), 
     and assessed and collected against each issuer, by 1 or more 
     appropriate designated collection agents, as may be necessary 
     or appropriate to pay for the budget and provide for the 
     expenses of the Division, and to provide for an independent, 
     stable source of funding for the Division, subject to review 
     by the Commission; and
       (B) may differentiate among different classes of issuers.
       (5) Allocation of accounting support fees among issuers.--
     Any amount due from issuers (or a particular class of 
     issuers) under this subsection to fund the budget of the 
     Division of Oversight Audits shall be allocated among and 
     payable by each issuer (or each issuer in a particular class, 
     as applicable) in an amount equal to the total of such 
     amount, multiplied by a fraction--
       (A) the numerator of which is the average monthly equity 
     market capitalization of the issuer for the 12-month period 
     immediately preceding the beginning of the fiscal year to 
     which such budget relates; and
       (B) the denominator of which is the average monthly equity 
     market capitalization of all such issuers for such 12-month 
     period.
                                  ____

  SA 4180. Mr. GRASSLEY submitted an amendment intended to be proposed

[[Page 12394]]

by him to the bill S. 2673, to improve quality and transparency in 
financial reporting and independent audits and accounting services for 
public companies, to create Public Company Accounting Oversight Board, 
to enhance the standard setting process for accounting practices, to 
strengthen the independence of firms that audit public companies, to 
increase corporate responsibility and the usefulness of corporate 
financial disclosure, to protect the objectivity and independence of 
securities analysts, to improve Securities and Exchange Commission 
resources and oversight, and for other purposes; which was ordered to 
lie on the table; as follows:

       On page 70, strike lines 1 through 19, and insert the 
     following:
       ``(9) the opining on a financial statement with respect to 
     the proper financial statement results of--
       ``(A) any listed transaction, or
       ``(B) any reportable transaction (other than a listed 
     transaction) if a significant purpose of such transaction is 
     the avoidance or evasion of Federal income tax,

     but only if the registered public accounting firm (or any 
     such associated person of such firm) has directly or 
     indirectly provided any material aid, assistance, or advice 
     with respect to the organizing, promoting, selling, 
     implementing, or carrying out of such listed or reportable 
     transaction, and
       ``(10) any other service that the Board determines, by 
     regulation, is impermissible.
       ``(h) Rules and Definitions Relating to Non-Audit 
     Services.--
       ``(1) Preapproval required for non-audit services.--A 
     registered public accounting firm may engage in any non-audit 
     service, including tax services, that is not described in any 
     of paragraphs (1) through (10) of subsection (g) for an audit 
     client, only if the activity is approved in advance by the 
     audit committee of the issuer, in accordance with subsection 
     (i).
       ``(2) Reportable and listed transactions.--For purposes of 
     subsection (g)(9)--
       ``(A) Reportable transaction.--The term `reportable 
     transaction' means any transaction with respect to which 
     information is required to be included with a return or 
     statement because, as determined under regulations prescribed 
     under section 6011 of the Internal Revenue Code of 1986, such 
     transaction is of a type which the Secretary of the Treasury 
     determines as having a potential for tax avoidance or 
     evasion.
       ``(B) Listed transaction.--Except as provided in 
     regulations, the term `listed transaction' means a reportable 
     transaction which is the same as, or similar to, a 
     transaction specifically identified by the Secretary of the 
     Treasury as a tax avoidance transaction for purposes of 
     section 6011 of such Code.''.
       (b) Exemption Authority.--The Board may, on a case by case 
     basis, exempt any person, issuer, public accounting firm, or 
     transaction from the prohibition on the provision of services 
     under section 10A(g) of the Securities Exchange Act of 1934 
     (as added by this section), to the extent that such exemption 
     is necessary or appropriate in the public interest and is 
     consistent with the protection of investors, and subject to 
     review by the Commission in the same manner as for rules of 
     the Board under section 107. This subsection shall not apply 
     to services described in paragraph (9) of such section 
     10A(g).
                                  ____

  SA 4181. Mr. GRASSLEY submitted an amendment intended to be proposed 
by him to the bill S. 2673, to improve quality and transparency in 
financial reporting and independent audits and accounting services for 
public companies, to create a Public Company Accounting Oversight 
Board, to enhance the standard setting process for accounting 
practices, to strengthen the independence of firms that audit public 
companies, to increase corporate responsibility and the usefulness of 
corporate financial disclosure, to protect the objectivity and 
independence of securities analysts, to improve Securities and Exchange 
Commission resources and oversight, and for other purposes; which was 
ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. BANKRUPTCY PROVISIONS.

       (a) Preferences.--Section 547 of title 11, United States 
     Code, is amended by adding at the end the following:
       ``(h) A trustee may avoid any transfer made within 1 year 
     before the date of the filing of the petition that was made 
     to an insider, officer, or director for any bonuses, loans, 
     nonqualified deferred compensation, or other extraordinary or 
     excessive compensation as determined by the court.''.
       (b) Fraudulent Transfers and Obligations.--Section 548(a) 
     of title 11, United States Code, is amended by adding at the 
     end the following:
       ``(3) The trustee may avoid any transfer of an interest of 
     the debtor in property, or any obligation incurred by the 
     debtor, including any bonuses, loans, nonqualified deferred 
     compensation, or other extraordinary or excessive 
     compensation as determined by the court, paid to any officer, 
     director, or employee of an issuer of securities (as defined 
     in section 2(a) of the Public Company Accounting Reform and 
     Investor Protection Act of 2002), if--
       ``(A) that transfer of interest or obligation was made or 
     incurred on or within 4 years before the date of the filing 
     of the petition; and
       ``(B) the officer, director, or employee was directly or 
     indirectly responsible for--
       ``(i) any violation of the Federal securities laws (as 
     defined in section 3(a)(47) of the Securities Exchange Act of 
     1934), State securities laws, or any regulation or order 
     issued under Federal or State securities laws;
       ``(ii) fraud, deceit, or manipulation in a fiduciary 
     capacity or in connection with the purchase or sale of any 
     security registered under section 12 or 15(d) of the 
     Securities Exchange Act of 1934 or under section 6 of the 
     Securities Act of 1933; or
       ``(iii) improper, illegal, or deceptive accounting 
     practices.''.

                          ____________________