[Congressional Record (Bound Edition), Volume 148 (2002), Part 9]
[Senate]
[Pages 12696-12717]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           TEXT OF AMENDMENTS

  SA 4209. Mrs. BOXER submitted an amendment intended to be proposed by 
her 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 16, beginning on line 8, strike ``Two members'' and 
     all that follows through line 12, and insert ``One member, 
     and only 1 member, of the Board shall be or shall have been a 
     certified public accountant pursuant to the laws of 1 or more 
     States, and he or she may not have been''.
                                  ____

  SA 4210. Mrs. BOXER submitted an amendment intended to be proposed by 
her 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 18, strike line 11 and insert the following:
       ``(6) Independence standard for public members.--Prior to 
     the appointment of a member of the Board who is not a 
     certified public accountant, the Commission shall certify 
     that the appointee does not have any material conflicts of 
     interests with respect to accounting firms that audit public 
     companies. A conflict of interest may arise from past 
     employment with a public accounting firm or the American 
     Institute of Certified Public Accountants, or a commercial, 
     banking, consulting, legal, charitable, or familial 
     relationships with a public accounting firm. In making its 
     independent determination, the Commission shall broadly 
     consider all relevant facts and circumstances, including 
     whether a reasonable investor would consider the appointee to 
     be independent of the accounting profession.
       ``(7) Removal from office.--A member of the ''.
                                  ____

  SA 4211. Mr. GRAHAM 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 82, line 18, strike the period and all that follows 
     through ``certify'' on line 20 and insert the following: ``, 
     regardless of whether such issuer is located in or organized 
     under the laws of the United States or any State, or any 
     foreign country.
                                  ____

  SA 4212. Mr. GRAHAM 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

[[Page 12697]]

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 82, line 20 insert ``, under oath,'' after 
     ``certify''.
                                  ____

  SA 4213. Mr. GRAMM (for Mr. Voinovich (for himself and Mr. Akaka)) 
submitted an amendment intended to be proposed by Mr. Gramm 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 114, insert between lines 2 and 3 the following:

     SEC. 605. CHIEF HUMAN CAPITAL OFFICER.

       The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) 
     is amended by inserting after section 4C (as added by this 
     Act) the following:

     ``SEC. 4D. CHIEF HUMAN CAPITAL OFFICER.

       ``(a) In General.--The Commission shall appoint or 
     designate a Chief Human Capital Officer, who shall--
       ``(1) advise and assist the Commission and other Commission 
     officials in carrying out the Commission's responsibilities 
     for selecting, developing, and managing a high-quality, 
     productive workforce in accordance with merit system 
     principles; and
       ``(2) implement the rules and regulations of the President 
     and the Office of Personnel Management and the laws governing 
     the civil service within the Commission.
       ``(b) Functions and Authorities.--
       ``(1) Functions.--The functions of the Chief Human Capital 
     Officer shall include--
       ``(A) setting the workforce development strategy of the 
     Commission;
       ``(B) assessing workforce characteristics and future needs 
     based on the Commission's mission and strategic plan;
       ``(C) aligning the Commission's human resources policies 
     and programs with organization mission, strategic goals, and 
     performance outcomes;
       ``(D) developing and advocating a culture of continuous 
     learning to attract and retain employees with superior 
     abilities;
       ``(E) identifying best practices and benchmarking studies;
       ``(F) applying methods for measuring intellectual capital 
     and identifying links of that capital to organizational 
     performance and growth; and
       ``(G) providing employee training and professional 
     development.
       ``(2) Authorities.--In addition to the authority otherwise 
     provided by this section, the Chief Human Capital Officer--
       ``(A) shall have access to all records, reports, audits, 
     reviews, documents, papers, recommendations, or other 
     material that--
       ``(i) are the property of the Commission or are available 
     to the Commission; and
       ``(ii) relate to programs and operations with respect to 
     which the Chief Human Capital Officer has responsibilities; 
     and
       ``(B) may request such information or assistance as may be 
     necessary for carrying out the duties and responsibilities 
     provided under this section from any Federal, State, or local 
     governmental entity.''.
                                  ____

  SA 4214. Mr. DORGAN (for himself and Mr. Wellstone) 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 84, line 23, strike ``(b) Commission'' and insert 
     the following:
       ``(b) Proceeds From the Sale of Securities Prior to 
     Bankruptcy Filing.--If an issuer files for bankruptcy 
     protection under title 11, United States Code, each director, 
     chief executive officer, and chief financial officer of the 
     issuer shall pay to the issuer all amounts described in 
     paragraphs (1) and (2) of subsection (a) (to the extent that 
     such amounts have not been reimbursed under subsection (a)) 
     realized by such director or officer from the sale of the 
     securities of the issuer during the 12-month period preceding 
     the date of the bankruptcy filing.
       ``(c) Commission''.
                                  ____

  SA 4215. Mr. DORGAN (for himself and Mr. Graham) 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 82, line 14 insert after ``issuer'' the following: 
     ``, whether domiciled, incorporated, or reincorporated under 
     the laws of the United States or any individual State, or 
     under the laws of a foreign country or political subdivision 
     thereof,''.
                                  ____

  SA 4216. Mr. DORGAN 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 70, between lines 19 and 20, insert the following:
       (c) Non-Audit Service Regulations.--The regulations of the 
     Commission to carry out section 10A(g) of the Securities 
     Exchange Act of 1934, as added by this section, shall be 
     substantially similar to the scope of practice provisions of 
     the proposed rule issued by the Commission and published in 
     the Federal Register on July 12, 2000, regarding revision of 
     the auditor independence requirements contained in Parts 210 
     and 240 of title 17, Code of Federal Regulations (65 Fed. 
     Reg. 43190 et seq.), consistent with the provisions of this 
     Act.
                                  ____

  SA 4217. Mr. DORGAN (for himself and Mr. McCain) 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 44, strike lines 8 through 11 and insert the 
     following:
       (2) Public hearings.--All hearings under this subsection 
     shall be public, unless otherwise ordered by the Board for 
     good cause shown on its own motion or after considering the 
     motion of a party to the hearing.
                                  ____

  SA 4218. Mr. BAYH 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

[[Page 12698]]

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. __. REQUIREMENT THAT PLAN ADMINISTRATOR NOTIFY 
                   PARTICIPANTS OF INVOLUNTARY PLAN TERMINATION.

       (a) In General.--Section 4042(b) of the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 1342(b)) is amended by 
     adding at the end the following:
       ``(4)(A) Not later than 30 days (or such longer period as 
     the corporation finds reasonable) after the corporation 
     notifies a plan administrator of a plan of the corporation's 
     determination under subsection (a) to institute proceedings 
     under this section with respect to such plan, the plan 
     administrator shall provide to each affected party (other 
     than the corporation) a written notice of the corporation's 
     determination that the plan should be terminated and the 
     corporation's proposed termination date. The written notice 
     shall be made in such form and manner as the corporation may 
     require. Such notice shall be written in a manner so as to be 
     understood by the average plan participant.
       ``(B) A plan administrator's failure to comply with the 
     requirement under subparagraph (A) shall not affect the 
     validity of any determination or action by the corporation or 
     the termination date established under section 4048.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to termination proceedings commenced after the 
     date of the enactment of this Act.
                                  ____

  SA 4219. Mrs. BOXER submitted an amendment intended to be proposed by 
her 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 84, strike lines 13 through 25 and insert the 
     following: ``shall forfeit to the Department of Labor--
       ``(1) any bonus or other incentive-based or equity-based 
     compensation received by that person from the issuer during 
     the 12-month period following the first public issuance or 
     filing with the Commission (whichever first occurs) of the 
     financial document embodying such financial reporting 
     requirement; and
       ``(2) any profits realized from the sale of securities of 
     the issuer during that 12-month period.
       ``(b) Commission Exemption Authority.--The Commission may 
     exempt any person from the application of subsection (a), as 
     it deems necessary and appropriate.
       ``(c) Distribution of Funds.--
       ``(1) Former employees.--Except as provided in paragraph 
     (4), and in accordance with paragraphs (2) and (3), the 
     Secretary of Labor shall distribute the funds forfeited under 
     subsection (a) to former employees of the issuer whose 
     employment was terminated by the issuer.
       ``(2) Eligibility for funds.--Before distributing funds to 
     an applicant under this subsection, the Secretary of Labor 
     shall certify that the job loss of the applicant resulted 
     from a business decision made by the issuer as a consequence 
     of a restatement of earnings, as described in subsection (a).
       ``(3) Exception.--A former employee of the issuer who was 
     complicit in the misstatement of earnings of the issuer 
     referred to in paragraph (2) shall not be eligible to receive 
     funds distributed under this subsection.
       ``(4) No loss of employment.--If no employee of the issuer 
     is laid off by the issuer within 12 months of a restatement 
     of earnings as a consequence of such restatement, the 
     Secretary of Labor shall distribute the funds forfeited under 
     subsection (a) to the issuer.''.
                                  ____

  SA 4220. Mrs. BOXER submitted an amendment intended to be proposed by 
her 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 84, strike lines 13 through 25 and insert the 
     following: ``shall forfeit to the Commission--
       ``(1) any bonus or other incentive-based or equity-based 
     compensation received by that person from the issuer during 
     the 12-month period following the first public issuance or 
     filing with the Commission (whichever first occurs) of the 
     financial document embodying such financial reporting 
     requirement; and
       ``(2) any profits realized from the sale of securities of 
     the issuer during that 12-month period.
       ``(b) Commission Exemption Authority.--The Commission may 
     exempt any person from the application of subsection (a), as 
     it deems necessary and appropriate.
       ``(c) Distribution of Funds.--
       ``(1) Former employees.--Except as provided in paragraph 
     (4), and in accordance with paragraphs (2) and (3), the 
     Commission shall distribute the funds forfeited under 
     subsection (a) to former employees of the issuer whose 
     employment was terminated by the issuer.
       ``(2) Eligibility for funds.--Before distributing funds to 
     an applicant under this subsection, the Commission shall 
     certify that the job loss of the applicant resulted from a 
     business decision made by the issuer as a consequence of a 
     restatement of earnings, as described in subsection (a).
       ``(3) Exception.--A former employee of the issuer who was 
     complicit in the misstatement of earnings of the issuer 
     referred to in paragraph (2) shall not be eligible to receive 
     funds distributed under this subsection.
       ``(4) No loss of employment.--If no employee of the issuer 
     is laid off by the issuer within 12 months of a restatement 
     of earnings as a consequence of such restatement, the 
     Commission shall distribute the funds forfeited under 
     subsection (a) to the issuer.''.
                                  ____

  SA 4221. Mr. WELLSTONE 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 end of title III, insert the following:

     SEC. __. PROVISIONS RELATING TO WHISTLEBLOWER ACTIONS 
                   INVOLVING PENSION PLANS.

       (a) Authority To Bring Actions.--Section 502(a) of the 
     Employee Retirement Income Security Act of 1974 (29 U.S.C. 
     1132(a)) is amended by striking ``or'' at the end of 
     paragraph (8), by striking the period at the end of paragraph 
     (9) and inserting ``; and'', and by adding at the end the 
     following new paragraph:
       ``(10) by the Secretary, or other person referred to in 
     section 510--
       ``(A) to enjoin any act or practice which violates section 
     510 in connection with a pension plan, or
       ``(B) to obtain appropriate equitable or legal relief to 
     redress such violation or to enforce section 510 in 
     connection with a pension plan.''
       (b) Additional Actions Which May Be Brought.--The second 
     sentence of section 510 of the Employee Retirement Income 
     Security Act of 1974 (29 U.S.C. 1140) is amended by striking 
     ``person because he'' and inserting ``other person because 
     such other person has opposed any practice in connection with 
     a pension plan that is made unlawful by this title or''.
                                  ____

  SA 4222. Mr. WELLSTONE 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

[[Page 12699]]

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 end of title III, add the following:

     SEC. 307. FORFEITURE OF CERTAIN BONUSES AND PROFITS IN 
                   BANKRUPTCY.

       Section 541(a) of title 11, United States Code, is amended 
     by adding at the end the following:
       ``(8) Any bonus or other incentive-based or equity-based 
     compensation received by a chief executive officer or chief 
     financial officer of an issuer of securities (as defined in 
     section 2(a) of the Public Company Accounting Reform and 
     Investor Protection Act of 2002) from that issuer during the 
     24-month period before the date of the filing of the 
     bankruptcy petition by the issuer.
       ``(9) Any profits realized by a chief executive officer or 
     chief financial officer of an issuer of securities (as 
     defined in section 2(a) of the Public Company Accounting 
     Reform and Investor Protection Act of 2002) from the sale of 
     securities of the issuer during the 24-month period before 
     the date of the filing of the bankruptcy petition by the 
     issuer.''.
                                  ____

  SA 4223. Mrs. CARNAHAN (for herself, Mr. Kerry, and Mr. Durbin) 
submitted an amendment intended to be proposed by her 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 94, line 16, beginning with ``shall file'' strike 
     all through ``feasible'' on line 24 and insert ``shall file 
     electronically with the Commission (and if such security is 
     registered on a national securities exchange, shall also file 
     with the exchange), a statement before the end of the second 
     business day following the day on which the subject 
     transaction has been executed, or at such other times as the 
     Commission shall establish, by rule, in any case in which the 
     Commission determines that such 2 day period is not feasible, 
     and the Commission shall provide that statement on a publicly 
     accessible Internet site not later than the end of the 
     business day following that filing, and the issuer (if the 
     issuer maintains a corporate website) shall provide that 
     statement on that corporate website not later than the end of 
     the business day following that filing (the requirements of 
     this paragraph shall take effect 1 year after the date of 
     enactment of this paragraph),''.
                                  ____

  SA 4224. Mr. GRAMM 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 analysis, 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, line 12, insert the following after 
     ``transaction'': ``(or classes of such persons, issuers or 
     public accounting firms from the prohibition on the provision 
     of services under section 10A(g) of the Securities Exchange 
     Act of 1934 (as added by this section), based upon the small 
     business nature of such person, issuer or public accounting 
     firm, taking into consideration applicable factors such as 
     total asset size, availability and cost of retaining multiple 
     service providers, number of public company audits performed, 
     and such other factors and conditions as the Board deems 
     necessary or appropriate in the public interest and 
     consistent with the protection of investors and consistent 
     with the purposes of this Act)''.
                                  ____

  SA 4225. Mr. GRAMM 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 analysis, 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 51, after line 2, insert the following new 
     paragraph:
       (3) Judicial review of disciplinary action.--Instead of 
     filing an application for Commission review under paragraph 
     (1), a public accounting firm or person associated with such 
     firm may, not later than 10 days after the date on which a 
     disciplinary action by the Board becomes final, seek review 
     of such disciplinary action by the United States District 
     Court for the District of Columbia or the appropriate Federal 
     district court in the State in which such person is 
     domiciled. Application to a Federal district court for review 
     of such disciplinary sanction shall operate as a stay of such 
     disciplinary action.''.
                                  ____

  SA 4226. Mr. GRAMM (for himself, Mr. Santorum, and Mr. Bond) 
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:

       Strike section 201(b) and insert in lieu thereof the 
     following:
       ``(b) Exemption Authority.--
       ``(1) Case-by-case waivers.--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.
       ``(2) Small business exemption.--The Board may, by rule 
     (subject to review by the Commission in the same manner as 
     for rules of the Board under section 107), exempt any person, 
     issuer or public accounting firm (or classes of such persons, 
     issuers or public accounting firms) from the prohibition on 
     the provision of services under section 10A(g) of the 
     Securities Exchange Act of 1934 (as added by this section), 
     based upon the small business nature of such person, issuer 
     or public accounting firm, taking into consideration 
     applicable factors such as total asset size, availability and 
     cost of retaining multiple service providers, number of 
     public company audits performed, and such other factors and 
     conditions as the Board deems necessary or appropriate in the 
     public interest and consistent with the protection of 
     investors and consistent with the purposes of this Act.''.
                                  ____

  SA 4227. Mr. SCHUMER 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 91, strike line 19 and all that follows through 
     page 93, line 22 and insert the following:

     SEC. 402. ENHANCED CONFLICT OF INTEREST PROVISIONS.

       (a) Prohibition on Personal Loans to Executives.--Section 
     13 of the Securities Exchange Act of 1934 (15 U.S.C. 78m), as 
     amended by this Act, is amended by adding at the end the 
     following:
       ``(k) Prohibition on Personal Loans to Executives.--

[[Page 12700]]

       ``(1) In general.--It shall be unlawful for any issuer, 
     directly or indirectly, to extend or maintain credit, or 
     arrange for the extension of credit, in the form of a 
     personal loan to or for any director or executive officer (or 
     equivalent thereof) of that issuer.
       ``(2) Limitation.--Paragraph (1) does not preclude any 
     extension of credit under an open end credit plan (as defined 
     in section 103 of the Truth in Lending Act (15 U.S.C. 1602)) 
     that is--
       ``(A) made in the ordinary course of the consumer credit 
     business of an issuer;
       ``(B) of a type that is generally made available by the 
     issuer to the public; and
       ``(C) made on market terms, or terms that are no more 
     favorable than those offered by the issuer to the general 
     public for such loans.''.
                                  ____

  SA 4228. Mr. SCHUMER 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. __. MANDATORY RESTITUTION FOR FEDERAL CRIMES OF FRAUD.

       Section 2327(a) of title 18, United States Code, is 
     amended--
       (1) by striking ``all victims of any offense'' and all that 
     follows through the period and inserting the following: ``all 
     victims of any offense--
       ``(1) for which an enhanced penalty is provided under 
     section 2326; or
       ``(2) relating to a Federal crime of fraud under section 
     371, 1131, 1341, 1343, 1348, 1519, or 1520.''.
                                  ____

  SA 4229. Mr. SCHUMER 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 99, between lines 15 and 16, insert the following:

     SEC. 408. AVAILABILITY OF CORPORATE TAX RETURNS.

       Section 13 of the Securities Exchange Act of 1934 (15 
     U.S.C. 78m) is amended by adding at the end the following:
       ``(l) Availability of Tax Returns.--
       ``(1) Filing requirement.--Each issuer that is required to 
     file a return under section 6012 of the Internal Revenue Code 
     of 1986, shall annually provide a complete copy of that 
     return to the Commission.
       ``(2) Public availability.--Each return provided to the 
     Commission under paragraph (1) shall be made available to the 
     public for inspection.''.
                                  ____

  SA 4230. Mr. SCHUMER (for himself and Mr. Shelby) 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 91, between lines 18 and 19, insert the following:
       (c) Study and Report on Special Purpose Entities.--
       (1) Study required.--The Commission shall, not later than 1 
     year after the effective date of adoption of off-balance 
     sheet disclosure rules required by section 13(j) of the 
     Securities Exchange Act of 1934, as added by this section, 
     complete a study of filings by issuers and their disclosures 
     to determine--
       (A) the extent of off-balance sheet transactions, including 
     assets, liabilities, leases, losses, and the use of special 
     purpose entities; and
       (B) whether generally accepted accounting rules result in 
     financial statements of issuers reflecting the economics of 
     such off-balance sheet transactions to investors in a 
     transparent fashion.
       (2) Report and recommendations.--Not later than 6 months 
     after the date of completion of the study required by 
     paragraph (1), the Commission shall submit a report to the 
     President, the Committee on Banking, Housing, and Urban 
     Affairs of the Senate, and the Committee on Financial 
     Services of the House of Representatives, setting forth--
       (A) the amount or an estimate of the amount of off-balance 
     sheet transactions, including assets, liabilities, leases, 
     and loses of, and the use of special purpose entities by, 
     issuers filing periodic reports pursuant to section 13 or 15 
     of the Securities Exchange Act of 1934;
       (B) the extent to which special purpose entities are used 
     to facilitate off-balance sheet transactions;
       (C) whether generally accepted accounting principles or the 
     rules of the Commission result in financial statements of 
     issuers reflecting the economics of such transactions to 
     investors in a transparent fashion;
       (D) whether generally accepted accounting principles 
     specifically result in the consolidation of special purpose 
     entities sponsored by an issuer in cases in which the issuer 
     has the majority of the risks and rewards of the special 
     purpose entity; and
       (E) the recommendations of the Commission for improving the 
     transparency and quality of reporting off-balance sheet 
     transactions in the financial statements and disclosures 
     required to be filed by an issuer with the Commission.
                                  ____

  SA 4231. Mr. SCHUMER 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 91, between lines 18 and 19, insert the following:
       (c) Study and Report on Special Purpose Entities.--
       (1) Study required.--The Commission shall, not later than 1 
     year after the effective date of adoption of off-balance 
     sheet disclosure rules required by section 13(j) of the 
     Securities Exchange Act of 1934, as added by this section, 
     complete a study of filings by issuers and their disclosures, 
     to determine--
       (A) the extent of off-balance sheet transactions, including 
     assets, liabilities, leases, losses, and the use of special 
     purpose entities; and
       (B) whether generally accepted accounting rules result in 
     financial statements of issuers reflecting the economics of 
     such off-balance sheet transactions to investors in a 
     transparent fashion.
       (2) Report.--Not later than 6 months after the date of 
     completion of the study required by paragraph (1), the 
     Commission shall submit a report to the President, the 
     Committee on Banking, Housing, and Urban Affairs of the 
     Senate, and the Committee on Financial Services of the House 
     of Representatives, setting forth--
       (A) the amount or an estimate of the amount of off-balance 
     sheet transactions, including assets, liabilities, leases, 
     and losses of, and the use of special purpose entities by, 
     issuers filing periodic reports pursuant to section 13 or 15 
     of the Securities Exchange Act of 1934;
       (B) the extent to which special purpose entities are used 
     to facilitate off-balance sheet transactions;
       (C) whether generally accepted accounting principles or the 
     rules of the Commission result in financial statements of 
     issuers reflecting the economics of such transactions to 
     investors in a transparent fashion; and
       (D) whether generally accepted accounting principles 
     specifically result in the consolidation of special purpose 
     entities sponsored by an issuer in cases in which the issuer 
     has the majority of the risks and rewards of the special 
     purpose entity.

[[Page 12701]]

       (3) Rules.--If the Commission reports under paragraph (2) 
     that such special purpose entities are not generally 
     consolidated by the issuer having the majority of the risks 
     and rewards of the assets, liabilities, leases, and losses of 
     the special purpose entity, the Commission shall, not later 
     than 12 months after the date of submission of the report, 
     adopt rules or regulations to require consolidation of such 
     entities by the sponsoring issuer.
                                  ____

  SA 4232. 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 15, strike line 11 and inserting the following:
     of the Board and the staff of the Board; and
       (8)(A) review and conduct oversight audits of the financial 
     statements of issuers and using its resources effectively to 
     focus on highest risk audit areas and to target questionable 
     audit practices of which the Board is aware, including 
     practices that the Board is made aware of from communications 
     with the Division of Enforcement of the Commission;
       (B)(i) refer findings of accounting or auditing 
     irregularity to the Division of Enforcement of the Commission 
     for further investigation of the issuer or the public 
     accounting firm, as appropriate; and
       (ii) if appropriate, refer findings of accounting or 
     auditing irregularity to--
       (I) 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;
       (II) the Attorney General of the United States;
       (III) the attorneys general of 1 or more States; or
       (IV) the appropriate State regulatory authority; and
       (C) on an annual basis, report its findings and make 
     recommendations for change to--
       (i) the Commission; and
       (ii) the Comptroller General of the United States.
                                  ____

  SA 4233. 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 85, after line 23, insert the following:
       (c) Investigations and Actions.--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:
       ``(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 4234. Mr. HOLLINGS 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.   . ANNUAL LIMIT ON AMOUNT REALIZED FROM EXERCISE OF 
                   STOCK OPTIONS.

       (a) In General.--It is unlawful for any officer or director 
     of a corporation to exercise stock options with respect to 
     securities registered pursuant to section 12 of the 
     Securities and Exchange Act of 1934 granted by a corporation 
     for its stock, or the stock of any subsidiary or affiliated 
     corporation, to the extent that the net proceeds (determined 
     without regard to taxes) to, or for the benefit of, that 
     officer or director realized from the exercise of the stock 
     options exceed $20,000,000 during any 12-month period.
       (b) Exception.--Subsection (a) does not apply if--
       (1) at last 80 percent of the net proceeds are attributable 
     to the exercise of options held by the officer, employee, or 
     director for 5 years or more; or
       (2) the exercise of the stock options has been approved in 
     advance by majority vote of the publicly-held shares voted 
     during the 12-month period within which the options are 
     exercised.
       (c) Remedy.--The provisions of section 306(c) of this Act 
     apply to any violation of subsection (a) in the same manner 
     as if the violation were a violation of section 306(a).
       (d) Effective Date.--Subsection (a) applies to stock 
     options granted after the date of enactment of this Act.
                                  ____

  SA 4235. Mr. ENZI (for Mr. Lieberman (for himself, Mr. Enzi, Mrs. 
Boxer, Mr. Allen, Ms. Cantwell, Mr. Lott, Mr. Bennett, Mr. Wyden, Mrs. 
Murray, and Mr. Burns)) submitted an amendment intended to be proposed 
by Mr. Enzi 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:

       In lieu of the matter proposed to be inserted, insert the 
     following:

     SEC. __. RECOMMENDATIONS ON THE TREATMENT OF STOCK OPTIONS.

       (a) Analysis.--The Commission shall conduct an analysis and 
     make regulatory and legislative recommendations on the 
     treatment of stock options in which the Commission shall 
     analyze--
       (1) the accounting treatment for employee stock options, 
     including the accuracy of available stock option pricing 
     models;
       (2) the adequacy of current disclosure requirements to 
     investors and shareholders on stock options;
       (3) the adequacy of corporate governance requirements, 
     including shareholder approval of stock option plans;
       (4) any need for new stock holding period requirements for 
     senior executives; and
       (5) the benefit and detriment of any new options expensing 
     rules on--
       (A) the productivity and performance of large, medium, and 
     small companies, and start-up enterprises;
       (B) the recruitment and retention of skilled workers; and
       (C) employees at various income levels, with a particular 
     focus on the effect on rank-and-file employees and the income 
     of women.
       (b) Recommendations.--
       (1) In general.--Not later than 180 days after the date of 
     enactment of this Act, the Commission shall submit regulatory 
     and legislative recommendations and supporting analysis to--
       (A) the standard setting body designated pursuant to 
     section 19(b) of the Securities Act of 1933, as amended by 
     section 106 of this Act;
       (B) the Committee on Banking, Housing, and Urban Affairs of 
     the Senate; and
       (C) the Committee on Financial Services of the House of 
     Representatives.
       (2) Contents.--The analysis, and regulatory and legislative 
     recommendations submitted under paragraph (1) shall include--
       (A) the results of the analysis conducted under subsection 
     (a); and
       (B) regulatory and legislative recommendations, if any, for 
     changes in the treatment of stock options.

[[Page 12702]]

     
                                  ____
  SA 4236. Mr. CLELAND 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 84, strike lines 6 through 22, and insert the 
     following:
       (a) Additional Compensation and Profits Received Subsequent 
     to Noncompliance With Commission Financial Reporting 
     Requirements.--If an issuer is required to prepare an 
     accounting restatement due to the material noncompliance of 
     the issuer, as a result of misconduct by such issuer or its 
     agents, with any financial reporting requirement under the 
     securities laws, the chief executive officer and chief 
     financial officer of the issuer, and any other officer and 
     director of the issuer who had knowledge of such 
     noncompliance, at the earlier of the first public issuance or 
     the filing with the Commission of the financial document 
     embodying such financial reporting requirement, shall 
     reimburse the issuer for the value of--
       (1) any bonus, compensation derived from a severance 
     agreement, or other incentive-based or equity-based 
     compensation received by that person from the issuer during 
     the 12-month period following the earlier of the first public 
     issuance or the filing with the Commission of the financial 
     document embodying such financial reporting requirement;
       (2) any profits realized from the sale of securities of the 
     issuer during that 12-month period; and
       (3) any profits realized from the exercise of any warrants, 
     options, or rights received by that person during that 12-
     month period.
                                  ____

  SA 4237. Mr. BYRD (for himself and Mr. Thompson) 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. __. DISCLOSURE OF INVESTMENTS, HOLDINGS, OR TRANSACTIONS 
                   IN CERTAIN FOREIGN COUNTRIES.

       (a) Securities Exchange Act of 1934.--Section 13 of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78m) is amended by 
     adding at the end the following new subsection:
       ``(i) Disclosure of Investments, Holdings, or Transactions 
     In or With Certain Foreign Entities.--
       ``(1) In general.--Each designated issuer shall, in 
     accordance with such rules and regulations as the Commission 
     may prescribe as necessary or appropriate in the public 
     interest or for the protection of investors--
       ``(A) disclose in each report or other document required to 
     be filed under this section, including all annual filings, 
     and in each registration statement required under section 14, 
     the nature and scope of the operations of the designated 
     issuer in or with any designated entity, and the Commission 
     shall consider material, any investments, holdings, or 
     transactions by a designated issuer in or with any designated 
     entity that, in the aggregate, exceed $100,000 at any time 
     during the period to which the filing relates; and
       ``(B) display all disclosures required by subparagraph (A) 
     prominently for investors.
       ``(2) Definitions.--For purposes of this subsection--
       ``(A) the term `designated entity' means any company or 
     other entity that is organized under the laws of a foreign 
     country, a government-owned corporation of a foreign country, 
     or the government of any foreign country--
       ``(i) that is subject to sanctions by the Office of Foreign 
     Assets Control; or
       ``(ii) the government of which has been determined by the 
     Secretary of State under section 6(j)(1)(A) of the Export 
     Administration Act of 1979, section 40(d) of the Arms Export 
     Control Act, or section 620A of the Foreign Assistance Act of 
     1961, to have knowingly provided support for acts of 
     international terrorism; and
       ``(B) the term `designated issuer'--
       ``(i) means any issuer of a security registered pursuant to 
     section 12, or the securities of which (including American 
     Depository Receipts) are directly or indirectly listed for 
     trading or sold on any national securities exchange or in any 
     United States over-the-counter market; and
       ``(ii) includes any subsidiary or other affiliate of such 
     an issuer.''.
       (b) Securities Act of 1933.--Section 10 of the Securities 
     Act of 1933 (15 U.S.C. 77j) is amended by adding at the end 
     the following new subsection:
       ``(g) Disclosure of Investments, Holdings, or Transactions 
     In or With Certain Foreign Entities.--
       ``(1) In general.--Each designated issuer shall, in 
     accordance with such rules and regulations as the Commission 
     may prescribe as necessary or appropriate in the public 
     interest or for the protection of investors--
       ``(A) disclose in each prospectus required or permitted 
     under this section, the nature and scope of the operations of 
     the designated issuer in or with any designated entity, and 
     the Commission shall consider material, any investments, 
     holdings, or transactions by a designated issuer in or with 
     any designated entity that, in the aggregate, exceed $100,000 
     at any time during the 6-month period preceding the date of 
     issuance of the prospectus; and
       ``(B) display all disclosures required by subparagraph (A) 
     prominently for investors.
       ``(2) Definitions.--For purposes of this subsection--
       ``(A) the term `designated entity' means any company or 
     other entity that is organized under the laws of a foreign 
     country, a government-owned corporation of a foreign country, 
     or the government of any foreign country--
       ``(i) that is subject to sanctions by the Office of Foreign 
     Assets Control; or
       ``(ii) the government of which has been determined by the 
     Secretary of State under section 6(j)(1)(A) of the Export 
     Administration Act of 1979, section 40(d) of the Arms Export 
     Control Act, or section 620A of the Foreign Assistance Act of 
     1961, to have knowingly provided support for acts of 
     international terrorism; and
       ``(B) the term `designated issuer'--
       ``(i) means any issuer of a security registered pursuant to 
     section 12 of the Securities Exchange Act of 1934, or the 
     securities of which (including American Depository Receipts) 
     are directly or indirectly listed for trading or sold on any 
     national securities exchange or in any United States over-
     the-counter market; and
       ``(ii) includes any subsidiary or other affiliate of such 
     an issuer.''.
       (c) Annual Report on Investments, Holdings, or Transactions 
     In or With Certain Foreign Entities.--
       (1) In general.--The Secretary of Defense, in coordination 
     with the Secretary of the Treasury, the Secretary of State, 
     the Director of Central Intelligence, and any other 
     departments or agencies that the Secretary of Defense 
     determines appropriate, shall submit a report to Congress on 
     an annual basis, regarding--
       (A) whether material investments, holdings, or transactions 
     by designated issuers in or with any designated entities have 
     provided during the preceding year, or are providing, 
     financial or technical support for any terrorist-sponsoring 
     government, or terrorist-sponsoring group or organization, in 
     the form of revenues, equipment, technology, or by other 
     means; and
       (B) the impact of such types of support on the regional and 
     global security interests of the United States.
       (2) Form of reports.--Each report under paragraph (1) shall 
     be submitted in unclassified form, but may include a 
     classified annex.
       (3) Definitions.--In this subsection--
       (A) the terms ``designated entity'', and ``designated 
     issuer'' have the same meanings as in section 13(i) of the 
     Securities Exchange Act of 1934, as added by this section; 
     and
       (B) the term ``terrorist-sponsoring government'' means the 
     government of a foreign country--
       (i) that is subject to sanctions by the Office of Foreign 
     Assets Control; or
       (ii) that has been determined by the Secretary of State 
     under section 6(j)(1)(A) of the Export Administration Act of 
     1979, section 40(d) of the Arms Export Control Act, or 
     section 620A of the Foreign Assistance Act of 1961, to have 
     knowingly provided support for acts of international 
     terrorism.
                                  ____

  SA 4238. Mr. McCAIN 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

[[Page 12703]]

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 69, strike line 8 and all that follows through page 
     70, line 19, and insert ``any non-audit service.'.''.

       On page 82, line 9, strike the quotation marks and the 
     final period and insert the following:
       ``(n) Standards Relating to Boards of Directors.--
       ``(1) Commission rules.--
       ``(A) In general.--Effective not later than 270 days after 
     the date of enactment of this subsection, the Commission 
     shall, by rule, direct the national securities exchanges and 
     national securities associations to prohibit the listing of 
     any security of an issuer that is not in compliance with the 
     requirements of any portion of paragraph (2).
       ``(B) Opportunity to cure defects.--The rules of the 
     Commission under subparagraph (A) shall provide for 
     appropriate procedures for an issuer to have an opportunity 
     to cure any defects that would be the basis for a prohibition 
     under subparagraph (A), before the imposition of such 
     prohibition.
       ``(2) Independence.--
       ``(A) In general.--Each member of the board of directors of 
     the issuer (other than the chief executive officer) shall be 
     independent.
       ``(B) Criteria.--In order to be considered independent for 
     purposes of this paragraph, a member of a board of directors 
     of an issuer may not, other than in his or her capacity as a 
     member of that board of directors--
       ``(i) accept any consulting, advisory, or other 
     compensatory fee from the issuer;
       ``(ii) be an affiliated person of the issuer or any 
     subsidiary thereof; or
       ``(iii) otherwise maintain any other business relationship 
     with the issuer or the management thereof.
       On page 82, line 24, insert before the period the 
     following: ``, and shall include a brief narrative of the 
     basis for the decision to so certify, including a discussion 
     of any questionable accounting treatment.''.
       On page 86, line 8, strike ``during'' and all that follows 
     through page 89, line 20 and insert the following: ``at any 
     time during the term of employment of that person by the 
     issuer, or service to that issuer as a director or executive 
     officer, or during the 90-day period following the date of 
     termination of such employment or service.
       ``(b) Exception.--Nothing in subsection (a) shall be 
     construed to prohibit the purchase, sale, acquisition, or 
     other transfer of equity securities of the issuer for the 
     purpose of avoiding expiration of stock options, but only to 
     the extent necessary to pay the option price of the 
     securities and any applicable taxes or to satisfy a court 
     ordered judgment.
       ``(c) Remedy.--
       ``(1) In general.--Any profit realized by a director or 
     executive officer referred to in subsection (a) from any 
     purchase, sale, or other acquisition or transfer in violation 
     of this section shall inure to and be recoverable by the 
     issuer, irrespective of any intention on the part of such 
     director or executive officer in entering into the 
     transaction.
       ``(2) Actions to recover profits.--An action to recover 
     profits in accordance with this section may be instituted at 
     law or in equity in any court of competent jurisdiction by 
     the issuer, or by the owner of any security of the issuer in 
     the name and in behalf of the issuer if the issuer fails or 
     refuses to bring such action within 60 days after the date of 
     request, or fails diligently to prosecute the action 
     thereafter.
       ``(d) Rulemaking Authorized.--The Commission may issue 
     rules to clarify the application of this subsection, to 
     ensure adequate notice to all persons affected by this 
     subsection, and to prevent evasion there of by the issuer.''.
                                  ____

  SA 4239. Mr. McCAIN 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 69, strike line 8 and all that follows through page 
     70, line 19, and insert ``any non-audit service.'.''.
       On page 82, line 24, insert before the period the 
     following: ``, and shall include a brief narrative of the 
     basis for the decision to so certify, including a discussion 
     of any questionable accounting treatment.''.
       On page 86, line 8, strike ``during'' and all that follows 
     through page 89, line 20 and insert the following: ``at any 
     time during the term of employment of that person by the 
     issuer, or service to that issuer as a director or executive 
     officer, or during the 90-day period following the date of 
     termination of such employment or service.
       ``(b) Exception.--Nothing in subsection (a) shall be 
     construed to prohibit the purchase, sale, acquisition, or 
     other transfer of equity securities of the issuer for the 
     purpose of avoiding expiration of stock options, but only to 
     the extent necessary to pay the option price of the 
     securities and any applicable taxes or to satisfy a court 
     ordered judgment.
       ``(c) Remedy.--
       ``(1) In general.--Any profit realized by a director or 
     executive officer referred to in subsection (a) from any 
     purchase, sale, or other acquisition or transfer in violation 
     of this section shall inure to and be recoverable by the 
     issuer, irrespective of any intention on the part of such 
     director or executive officer in entering into the 
     transaction.
       ``(2) Actions to recover profits.--An action to recover 
     profits in accordance with this section may be instituted at 
     law or in equity in any court of competent jurisdiction by 
     the issuer, or by the owner of any security of the issuer in 
     the name and in behalf of the issuer if the issuer fails or 
     refuses to bring such action within 60 days after the date of 
     request, or fails diligently to prosecute the action 
     thereafter.
       ``(d) Rulemaking Authorized.--The Commission may issue 
     rules to clarify the application of this subsection, to 
     ensure adequate notice to all persons affected by this 
     subsection, and to prevent evasion thereof by the issuer.''.
                                  ____

  SA 4240. Mr. LIEBERMAN (for himself, Mr. Enzi, Mrs. Boxer, Mr. Allen, 
Ms. Cantwell, Mr. Bennett, Mr. Wyden, Mr. Lott, Mrs. Murray, Mr. Burns, 
and Mr. Craig) 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 end of the bill insert the following:

     SEC. __. RECOMMENDATIONS ON THE TREATMENT OF STOCK OPTIONS.

       (a) Analysis.--The Commission shall conduct an analysis and 
     make regulatory and legislative recommendations on the 
     treatment of stock options in which the Commission shall 
     analyze--
       (1) the accounting treatment for employee stock options, 
     including the accuracy of available stock option pricing 
     models;
       (2) the adequacy of current disclosure requirements to 
     investors and shareholders on stock options;
       (3) the adequacy of corporate governance requirements, 
     including shareholder approval of stock option plans;
       (4) any need for new stock holding period requirements for 
     senior executives; and
       (5) the benefit and detriment of any new options expensing 
     rules on--
       (A) the productivity and performance of large, medium, and 
     small companies, and start-up enterprises;
       (B) the recruitment and retention of skilled workers; and
       (C) employees at various income levels, with a particular 
     focus on the effect on rank-and-file employees and the income 
     of women.
       (b) Recommendations.--
       (1) In general.--Not later than 180 days after the date of 
     enactment of this Act, the Commission shall submit regulatory 
     and legislative recommendations and supporting analysis to--
       (A) the standard setting body designated pursuant to 
     section 19(b) of the Securities Act of 1933, as amended by 
     section 106 of this Act;
       (B) the Committee on Banking, Housing, and Urban Affairs of 
     the Senate; and
       (C) the Committee on Financial Services of the House of 
     Representatives.
       (2) Contents.--The analysis, and regulatory and legislative 
     recommendations submitted under paragraph (1) shall include--
       (A) the results of the analysis conducted under subsection 
     (a); and
       (B) regulatory and legislative recommendations, if any, for 
     changes in the treatment of stock options.

[[Page 12704]]

     
                                  ____
  SA 4241. Mr. LIEBERMAN (for himself, Mr. Enzi, Mrs. Boxer, Mr. Allen, 
Ms. Cantwell, Mr. Bennett, Mr. Wyden, Mr. Lott, Mrs. Murray, Mr. Burns, 
and Mr. Craig) 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:

       In lieu of the matter proposed to be inserted, insert the 
     following:

     SEC. __. RECOMMENDATIONS ON THE TREATMENT OF STOCK OPTIONS.

       (a) Analysis.--The Commission shall conduct an analysis and 
     make regulatory and legislative recommendations on the 
     treatment of stock options in which the Commission shall 
     analyze--
       (1) the accounting treatment for employee stock options, 
     including the accuracy of available stock option pricing 
     models;
       (2) the adequacy of current disclosure requirements to 
     investors and shareholders on stock options;
       (3) the adequacy of corporate governance requirements, 
     including shareholder approval of stock option plans;
       (4) any need for new stock holding period requirements for 
     senior executives; and
       (5) the benefit and detriment of any new options expensing 
     rules on--
       (A) the productivity and performance of large, medium, and 
     small companies, and start-up enterprises;
       (B) the recruitment and retention of skilled workers; and
       (C) employees at various income levels, with a particular 
     focus on the effect on rank-and-file employees and the income 
     of women.
       (b) Recommendations.--
       (1) In general.--Not later than 180 days after the date of 
     enactment of this Act, the Commission shall submit regulatory 
     and legislative recommendations and supporting analysis to--
       (A) the standard setting body designated pursuant to 
     section 19(b) of the Securities Act of 1933, as amended by 
     section 106 of this Act;
       (B) the Committee on Banking, Housing, and Urban Affairs of 
     the Senate; and
       (C) the Committee on Financial Services of the House of 
     Representatives.
       (2) Contents.--The analysis, and regulatory and legislative 
     recommendations submitted under paragraph (1) shall include--
       (A) the results of the analysis conducted under subsection 
     (a); and
       (B) regulatory and legislative recommendations, if any, for 
     changes in the treatment of stock options.
                                  ____

  SA 4242. Mr. KENNEDY (for himself, Mr. Reed, Mr. Leahy) 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. __. LIABILITY FOR BREACH OF FIDUCIARY DUTY.

       (a) Liability for Participating In or Concealing Fiduciary 
     Breach.--
       (1) Application to participants and beneficiaries of 401(k) 
     plans.--
       (A) In general.--Part 4 of subtitle B of title I of the 
     Employee Retirement Income Security Act of 1974 (29 U.S.C. 
     1101 et seq.) is amended by adding after section 409 the 
     following new section:

     ``SEC. 409A. LIABILITY FOR BREACH OF FIDUCIARY DUTY IN 401(K) 
                   PLANS.

       ``(a)(1)(A) Any person who is a fiduciary with respect to 
     an individual account plan that includes a qualified cash or 
     deferred arrangement under section 401(k) of the Internal 
     Revenue Code of 1986 who breaches any of the 
     responsibilities, obligations, or duties imposed upon 
     fiduciaries by this title shall be personally liable to make 
     good to each participant's and beneficiary's individual 
     account in the plan (or directly to such participant or 
     beneficiary in the absence of an individual account) any 
     losses to the participant's or beneficiary's individual 
     account in the plan resulting from each such breach, and to 
     restore to the participant's or beneficiary's individual 
     account in the plan (or directly to such participant or 
     beneficiary in the absence of an individual account) any 
     profits of such fiduciary which have been made through use of 
     assets of the plan by the fiduciary, and shall be subject to 
     such other equitable or remedial relief as the court may deem 
     appropriate, including removal of such fiduciary. A fiduciary 
     may also be removed for a violation of section 411 of this 
     Act.
       ``(B) If an insider (as defined in section 409(b)(1)(B)) 
     with respect to the plan sponsor of an employer individual 
     account plan that holds employer securities that are readily 
     tradable on an established securities market--
       ``(i) knowingly participates in a breach of fiduciary 
     responsibility to which subparagraph (A) applies, or
       ``(ii) knowingly undertakes to conceal such a breach,

     such insider shall be personally liable under this 
     subparagraph to each participant's and beneficiary's 
     individual account in the plan (or directly to such 
     participant or beneficiary in the absence of an individual 
     account) for such breach in the same manner as the fiduciary 
     who commits such breach.
       ``(2) Nothing in this subsection shall be construed as 
     permitting the recovery by a participant or beneficiary of 
     any consequential or punitive damages.
       ``(b) The right of participants and beneficiaries under 
     subsection (a) to sue for breach of fiduciary duty with 
     respect to an individual account plan that includes a 
     qualified cash or deferred arrangement under section 401(k) 
     of such Code shall be in addition to all existing rights that 
     participants and beneficiaries have under section 409, 
     section 502, and any other provision of this title, and shall 
     not be construed to give rise to any inference that such 
     rights do not already exist under section 409, section 502, 
     or any other provision of this title.
       ``(c) No fiduciary shall be liable with respect to a breach 
     of fiduciary duty under this title if such breach was 
     committed before he or she became a fiduciary or after he or 
     she ceased to be a fiduciary, unless such liability arises 
     under subsection (a)(1)(B).''
       (B) Conforming amendment.--The table of contents for part 4 
     of subtitle B of title I of such Act is amended by inserting 
     the following new item after the item relating to section 
     409:

``Sec. 409A. Liability for breach of fiduciary duty in 401(k) plans.''
       (2) Insider liability.--
       (A) In general.--Section 409 of the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 1109) is amended by 
     redesignating subsection (b) as subsection (c) and by 
     inserting after subsection (a) the following new subsection:
       ``(b)(1)(A) If an insider with respect to the plan sponsor 
     of an employer individual account plan that holds employer 
     securities that are readily tradable on an established 
     securities market--
       ``(i) knowingly participates in a breach of fiduciary 
     responsibility to which subsection (a) applies, or
       ``(ii) knowingly undertakes to conceal such a breach,

     such insider shall be personally liable under this subsection 
     to the plan or to any participant or beneficiary of the plan 
     for such breach in the same manner as the fiduciary who 
     commits such breach.
       ``(B) For purposes of subparagraph (A), the term `insider' 
     means, with respect to any plan sponsor of a plan to which 
     subparagraph (A) applies--
       ``(i) any officer or director with respect to the plan 
     sponsor, or
       ``(ii) any independent qualified public accountant of the 
     plan or of the plan sponsor.
       ``(2) Any relief provided under this subsection or section 
     409A--
       ``(A) to an individual account plan shall inure to the 
     individual accounts of the affected participants or 
     beneficiaries, and
       ``(B) to a participant or beneficiary shall be payable to 
     the participant's or beneficiary's individual account in the 
     plan (or directly to such participant or beneficiary in the 
     absence of an individual account).''
       (B) Conforming amendment.--Section 409(c) of such Act (29 
     U.S.C. 1109(c)), as redesignated by subparagraph (A), is 
     amended by inserting before the period the following: ``, 
     unless such liability arises under subsection (b)''.
       (b) Effective Date; Plan Amendments.--
       (1) General effective date.--Except as otherwise provided 
     in this section, the amendments made by this section shall 
     apply with respect to plan years beginning on or after 
     January 1, 2003.
       (2) Special rule for collectively bargained plans.--In the 
     case of a plan maintained pursuant to 1 or more collective 
     bargaining agreements between employee representatives and 1 
     or more employers ratified on or before the date of the 
     enactment of this Act, paragraph (1) shall be applied to 
     benefits pursuant to, and individuals covered by, any such 
     agreement by substituting for

[[Page 12705]]

     ``January 1, 2003'' the date of the commencement of the first 
     plan year beginning on or after the earlier of--
       (A) the later of--
       (i) January 1, 2004, or
       (ii) the date on which the last of such collective 
     bargaining agreements terminates (determined without regard 
     to any extension thereof after the date of the enactment of 
     this Act), or
       (B) January 1, 2005.
       (3) Plan amendments.--If any amendment made by this section 
     requires an amendment to any plan, such plan amendment shall 
     not be required to be made before the first plan year 
     beginning on or after January 1, 2005, if--
       (A) during the period after such amendment made by this 
     section takes effect and before such first plan year, the 
     plan is operated in good faith compliance with the 
     requirements of such amendment made by this section, and
       (B) such plan amendment applies retroactively to the period 
     after such amendment made by this section takes effect and 
     before such first plan year.
                                  ____

  SA 4243. Mr. BUNNING 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 practice, 
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. __. TREATMENT OF THE TENNESSEE VALLEY AUTHORITY.

       (a) Securities Act of 1933.--The Securities Act of 1933 (15 
     U.S.C. 77a et seq.) is amended--
       (1) in section 3(a)(2) (15 U.S.C. 77c(a)(2)), by inserting 
     ``(other than the Tennessee Valley Authority)'' after 
     ``Congress of the United States'';
       (2) in section 3 (15 U.S.C. 77c), by adding at the end the 
     following:
       ``(d) Tennessee Valley Authority Bonds not Exempt.--
     Notwithstanding any provision of this title, no bond issued 
     or sold by the Tennessee Valley Authority pursuant to section 
     15d of the Tennessee Valley Authority Act (16 U.S.C. 831n-
     3(d)) shall be exempt from the requirements of this title.''; 
     and
       (3) in section 28 (15 U.S.C. 77z-3)--
       (A) by inserting ``(a) In General.--'' before ``The''; and
       (B) by adding at the end the following:
       ``(b) Applicability.--Notwithstanding subsection (a), the 
     Commission may not exempt from any provision of this title, 
     or any rule or regulation issued under this title any bond 
     issued or sold by the Tennessee Valley Authority pursuant to 
     section 15d of the Tennessee Valley Authority Act (16 U.S.C. 
     831n-3(d)).''.
       (b) Securities Exchange Act of 1934.--The Securities 
     Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended--
       (1) in section 3(c) (15 U.S.C. 78c(c)), by inserting 
     ``(other than the Tennessee Valley Authority)'' after 
     ``establishment of the United States'';
       (2) in section 3 (15 U.S.C. 78c), by adding at the end the 
     following:
       ``(h) Tennessee Valley Authority.--Notwithstanding any 
     other provision of this title, no bond issued or sold by the 
     Tennessee Valley Authority pursuant to section 15d of the 
     Tennessee Valley Authority Act (16 U.S.C. 831n-3(d)) shall be 
     exempt from the requirements of this title or the rules or 
     regulations issued under this title.''; and
       (3) in section 36(b) (15 U.S.C. 78mm(b))--
       (A) by striking ``exempt any'' and inserting ``exempt--
       ``(1) any'';
       (B) by striking the period at the end and inserting ``; 
     or''; and
       (C) by adding at the end the following:
       ``(2) any bond issued by the Tennessee Valley Authority 
     pursuant to section 15d of the Tennessee Valley Authority Act 
     (16 U.S.C. 831n-3(d)).''.
                                  ____

  SA 4244. 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 84, after line 25, insert the following:
       (c) 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 has committed--
       ``(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; or
       ``(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.''
                                  ____

  SA 4245. Mr. SESSIONS 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. __. COMPLIANCE COMMITTEES.

       (a) Establishment.--The Commission shall, by rule, require 
     each of the largest 1,000 publicly traded companies (as 
     determined by the Commission) to establish a compliance 
     committee of the board of directors to receive and 
     investigate complaints or concerns of employees that question 
     the integrity of financial records, financial statements, or 
     other practices of the company.
       (b) Composition.--Each compliance committee shall be made 
     up of not fewer than 3 members of the board of directors.
       (c) Recordkeeping.--The compliance committee shall keep 
     records of complaints and investigation for a period of 5 
     years, which records shall be deemed confidential, and shall 
     not be discoverable by any private party litigant in any 
     civil action.
       (d) Procedures for Review.--Each member of the compliance 
     committee shall--
       (1) personally review each complaint and investigation; and
       (2) sign and certify that they have read the complaint and 
     investigation and that records thereof are true and accurate 
     in all material respects.
       (f) Reports to Board.--The compliance committee shall 
     report to the board of directors its findings with respect to 
     each investigation for appropriate action.
                                  ____

  SA 4246. Mr. SESSIONS 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.   . REPORTING COMPLAINTS.

       The Commission shall establish, by rule, on easily 
     available option (toll free number, website, e-mail, or other 
     means) for employees of the largest 1,000 publicly traded 
     companies (as determined by the Commission) to

[[Page 12706]]

     report to the Enforcement Division of the Commission 
     confidentially any complaints or concerns that questions the 
     integrity of the financial records or financial statements of 
     the company.
                                  ____

  SA 4247. Mr. EDWARDS 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:
       (  ) Rules of Professional Responsibility for Attorneys.--
     Not later than 180 days after the date of enactment of this 
     section, the Commission shall establish rules, in the public 
     interest and for the protection of investors, setting forth 
     minimum standards of professional conduct for attorneys 
     appearing and practicing before the Commission in any way in 
     the representation of public companies, including a rule 
     requiring an attorney to report evidence of a material 
     violation of securities law or breach of fiduciary duty or 
     similar violation by the company or any agent thereof to the 
     chief legal counsel or the chief executive officer of the 
     company (or the equivalent thereof) and, if the counsel or 
     officer does not appropriately respond to the evidence 
     (adopting, as necessary, appropriate remedial measures or 
     sanctions with respect to the violation), requiring the 
     attorney to report the evidence to the audit committee of the 
     board of directors or to another committee of the board of 
     directors comprised solely of directors not employed directly 
     or indirectly by the company, or to the board of directors.
                                  ____

  SA 4248. Mr. EDWARDS 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 108, line 15, insert before the end quotation marks 
     the following:
       ``(c) Rules of Professional Responsibility for Attorneys.--
     Not later than 180 days after the date of enactment of this 
     section, the Commission shall establish rules, in the public 
     interest and for the protection of investors, setting forth 
     minimum standards of professional conduct for attorneys 
     appearing and practicing before the Commission in any way in 
     the representation of public companies, including a rule 
     requiring an attorney to report evidence of a material 
     violation of securities law or breach of fiduciary duty or 
     similar violation by the company or any agent thereof to the 
     chief legal counsel or the chief executive officer of the 
     company (or the equivalent thereof) and, if the counsel or 
     officer does not appropriately respond to the evidence 
     (adopting, as necessary, appropriate remedial measures or 
     sanctions with respect to the violation), requiring the 
     attorney to report the evidence to the audit committee of the 
     board of directors or to another committee of the board of 
     directors comprised solely of directors not employed directly 
     or indirectly by the company, or to the board of directors.
                                  ____

  SA 4249. Mr. LEVIN 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 2, line 17 strike ``directors.'' and insert the 
     following: ``directors.

     SEC. 605. ADMINISTRATIVE PROCEEDINGS REGARDING BANS ON 
                   SERVICE.

       (a) Securities Exchange Act of 1934.--Section 21C of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78u-3) is amended 
     by adding at the end the following new subsection:
       ``(f) Authority of the Commission To Prohibit Persons From 
     Serving as Officers and Directors.--In any cease-and-desist 
     proceeding under subsection (a), the Commission may issue an 
     order to prohibit, conditionally or unconditionally, and 
     permanently or for such period of time as it shall determine, 
     any person who has violated section 10(b), or the rules or 
     regulations thereunder, from acting as an officer or director 
     of any issuer that has a class or securities registered 
     pursuant to section 12, or that is required to file reports 
     pursuant to section 15(d), if the conduct of that person 
     demonstrates unfitness to serve as an officer or director of 
     any such issuer.''.
       (b) Securities Act of 1933.--Section 8A of the Securities 
     Act of 1933 (15 U.S.C. 77h-1) is amended by adding at the end 
     the following new subsection:
       ``(f) Authority of the Commission To Prohibit Persons From 
     Serving as Officer and Directors.--In any cease-and-desist 
     proceeding under subsection (a), the Commission may issue an 
     order to prohibit, conditionally or unconditionally, and 
     permanently or for such period of time as it shall determine, 
     any person who has violated section 17(a)(1) from acting as 
     an officer or director of any issuer that has a class or 
     securities registered pursuant to section 12 of the 
     Securities Exchange Act of 1934, or that is required to file 
     reports pursuant to section 15(d) of that Act, if the conduct 
     of that person demonstrates unfitness to serve as an officer 
     or director of any such issuer.''.

     SEC. 606. AUTHORITY TO ASSESS CIVIL MONEY PENALTIES.

       (a) Securities Act of 1933.--Section 8A of the Securities 
     Act of 1933 (15 U.S.C. 77h-1) is amended by adding at the end 
     a new subsection as follows:
       ``(g) Authority of the Commission To Assess Money 
     Penalty.--
       ``(1) In general.--In any cease-and-desist proceeding under 
     subsection (a), the Commission may impose a civil monetary 
     penalty if it finds, on the record after notice and 
     opportunity for hearing, that a person is violating, has 
     violated, is about to violate, or has been or will be the 
     cause of the violation of, any provision of this title or any 
     rule or regulation thereunder, and that such penalty is in 
     the public interest.
       ``(2) Maximum amount of penalty.--
       ``(A) First tier.--The maximum amount of penalty for each 
     act or omission described in paragraph (1) shall be $100,000 
     for a natural person or $250,000 for any other person.
       ``(B) Second tier.--Notwithstanding subparagraph (A), the 
     maximum amount of penalty for such act or omission described 
     in paragraph (1) shall be $500,000 for a natural person or 
     $1,000,000 for any other person, if the act or omission 
     involved fraud, deceit, manipulation, or deliberate or 
     reckless disregard of a statutory or regulatory requirement.
       ``(C) Third tier.--Notwithstanding subparagraphs (A) and 
     (B), the maximum amount of penalty for each act or omission 
     described in paragraph (1) shall be $1,000,000 for a natural 
     person or $2,000,000 for any other person, if--
       ``(i) the act or omission involved fraud, deceit, 
     manipulation, or deliberate or reckless disregard of a 
     statutory or regulatory requirement; and
       ``(ii) such act or omission directly or indirectly resulted 
     in substantial losses or created a significant risk of 
     substantial losses to other persons or resulted in 
     substantial pecuniary gain to the person who committed the 
     act or omission.''.
       (b) Securities Exchange Act of 1934.--Section 21B(a) of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78u-2(a)) is 
     amended--
       (1) in paragraph (4), by striking ``supervision;'' and all 
     that follows through the end of the subsection and inserting 
     ``supervision.'';
       (2) by redesignating paragraphs (1) through (4) as 
     subparagraphs (A) through (D), respectively, and moving the 
     margins 2 ems to the right;
       (3) by inserting ``that such penalty is in the public 
     interest and'' after ``hearing,'';
       (4) by striking ``In any proceeding'' and inserting the 
     following:
       ``(1) In general.--In any proceeding''; and
       (5) by adding at the end the following:
       ``(2) Other money penalties.--In any proceeding under 
     section 21C against any person, the Commission may impose a 
     civil monetary penalty if it finds, on the record after 
     notice and opportunity for hearing, that such person is 
     violating, has violated, is about to violate, or has been or 
     will be the cause of the violation of, any provision of this 
     title or any rule or regulation thereunder, and that such 
     penalty is in the public interest.''.

[[Page 12707]]

       (c) Investment Company Act of 1940.--Section 9(d)(1) of the 
     Investment Company Act of 1940 (15 U.S.C. 80a-9(d)(1)) is 
     amended--
       (1) in subparagraph (C), by striking ``therein;'' and all 
     that follows through the end of the paragraph and inserting 
     ``supervision.'';
       (2) by redesignating subparagraphs (A) through (C) as 
     clauses (i) through (iii), respectively, and moving the 
     margins 2 ems to the right;
       (3) by inserting ``that such penalty is in the public 
     interest and'' after ``hearing,'';
       (4) by striking ``In any proceeding'' and inserting the 
     following:
       ``(A) In general.--In any proceeding''; and
       (5) by adding at the end the following:
       ``(B) Other money penalties.--In any proceeding under 
     subsection (f) against any person, the Commission may impose 
     a civil monetary penalty if it finds, on the record after 
     notice and opportunity for hearing, that such person is 
     violating, has violated, is about to violate, or has been or 
     will be the cause of the violation of, any provision of this 
     title or any rule or regulation thereunder, and that such 
     penalty is in the public interest.''.
       (d) Investment Advisers Act of 1940.--Section 203(i)(1) of 
     the Investment Advisers Act of 1940 (15 U.S.C. 80b-3(i)(1)) 
     is amended--
       (1) in subparagraph (D), by striking ``supervision;'' and 
     all that follows through the end of the paragraph and 
     inserting ``supervision.'';
       (2) by redesignating subparagraphs (A) through (D) as 
     clauses (i) through (iv), respectively, and moving the 
     margins 2 ems to the right;
       (3) by inserting ``that such penalty is in the public 
     interest and'' after ``hearing,'';
       (4) by striking ``In any proceeding'' and inserting the 
     following:
       ``(A) In general.--In any proceeding''; and
       (5) by adding at the end the following:
       ``(B) Other money penalties.--In any proceeding under 
     subsection (k) against any person, the Commission may impose 
     a civil monetary penalty if it finds, on the record after 
     notice and opportunity for hearing, that such person is 
     violating, has violated, is about to violate, or has been or 
     will be the cause of the violation of, any provision of this 
     title or any rule or regulation thereunder, and that such 
     penalty is in the public interest.''.

     SEC. 607. INCREASED MAXIMUM CIVIL MONEY PENALTIES.

       (a) Securities Act of 1933.--Section 20(d)(2) of the 
     Securities Act of 1933 (15 U.S.C. 77t(d)(2)) is amended--
       (1) in subparagraph (A)(i), by--
       (A) striking ``$5,000'' and inserting ``$100,000''; and
       (B) striking ``$50,000'' and inserting ``$250,000'';
       (2) in subparagraph (B)(i), by--
       (A) striking ``$50,000'' and inserting ``$500,000''; and
       (B) striking ``$250,000'' and inserting ``$1,000,000''; and
       (3) in subparagraph (C)(i), by--
       (A) striking ``$100,000'' and inserting ``$1,000,000''; and
       (B) striking ``$500,000'' and inserting ``$2,000,000''.
       (b) Securities Exchange Act of 1934.--
       (1) Penalties.--Section 32 of the Securities Exchange Act 
     of 1934 (15 U.S.C. 78ff) is amended--
       (A) in subsection (b), by striking ``$100'' and inserting 
     ``$10,000''; and
       (B) in subsection (c)--
       (i) in paragraph (1)(B), by striking ``$10,000'' and 
     inserting ``$500,000''; and
       (ii) in paragraph (2)(B), by striking ``$2,000'' and 
     inserting ``$500,000''.
       (2) Insider trading.--Section 21A(a)(3) of the Securities 
     Exchange Act of 1934 (15 U.S.C. 78u-1(a)(3)) is amended by 
     striking ``$1,000,000'' and inserting ``$2,000,000''.
       (3) Administrative proceedings.--Section 21B(b) of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78u-2(b)) is 
     amended--
       (A) in paragraph (1), by--
       (i) striking ``$5,000'' and inserting ``$100,000''; and
       (ii) striking ``$50,000'' and inserting ``$250,000'';
       (B) in paragraph (2), by--
       (i) striking ``$50,000'' and inserting ``$500,000''; and
       (ii) striking ``$250,000'' and inserting ``$1,000,000''; 
     and
       (C) in paragraph (3), by--
       (i) striking ``$100,000'' and inserting ``$1,000,000''; and
       (ii) striking ``$500,000'' and inserting ``$2,000,000''.
       (4) Civil actions.--Section 21(d)(3)(B) of the Securities 
     Exchange Act of 1934 (15 U.S.C. 78u(d)(3)(B)) is amended--
       (A) in clause (i), by--
       (i) striking ``$5,000'' and inserting ``$100,000''; and
       (ii) striking ``$50,000'' and inserting ``$250,000'';
       (B) in clause (ii), by--
       (i) striking ``$50,000'' and inserting ``$500,000''; and
       (ii) striking ``$250,000'' and inserting ``$1,000,000''; 
     and
       (C) in clause (iii), by--
       (i) striking ``$100,000'' and inserting ``$1,000,000''; and
       (ii) striking ``$500,000'' and inserting ``$2,000,000''.
       (c) Investment Company Act of 1940.--
       (1) Ineligibility.--Section 9(d)(2) of the Investment 
     Company Act of 1940 (15 U.S.C. 80a-9(d)(2)) is amended--
       (A) in subparagraph (A), by--
       (i) striking ``$5,000'' and inserting ``$100,000''; and
       (ii) striking ``$50,000'' and inserting ``$250,000'';
       (B) in subparagraph (B), by--
       (i) striking ``$50,000'' and inserting ``$500,000''; and
       (ii) striking ``$250,000'' and inserting ``$1,000,000''; 
     and
       (C) in subparagraph (C), by--
       (i) striking ``$100,000'' and inserting ``$1,000,000''; and
       (ii) striking ``$500,000'' and inserting ``$2,000,000''.
       (2) Enforcement of investment company act.--Section 
     42(e)(2) of the Investment Company Act of 1940 (15 U.S.C. 
     80a-41(e)(2)) is amended--
       (A) in subparagraph (A), by--
       (i) striking ``$5,000'' and inserting ``$100,000''; and
       (ii) striking ``$50,000'' and inserting ``$250,000'';
       (B) in subparagraph (B), by--
       (i) striking ``$50,000'' and inserting ``$500,000''; and
       (ii) striking ``$250,000'' and inserting ``$1,000,000''; 
     and
       (C) in subparagraph (C), by--
       (i) striking ``$100,000'' and inserting ``$1,000,000''; and
       (ii) striking ``$500,000'' and inserting ``$2,000,000''.
       (d) Investment Advisors Act of 1940.--
       (1) Registration.--Section 203(i)(2) of the Investment 
     Advisors Act of 1940 (15 U.S.C. 80b-3(i)(2)) is amended--
       (A) in subparagraph (A), by--
       (i) striking ``$5,000'' and inserting ``$100,000''; and
       (ii) striking ``$50,000'' and inserting ``$250,000'';
       (B) in subparagraph (B), by--
       (i) striking ``$50,000'' and inserting ``$500,000''; and
       (ii) striking ``$250,000'' and inserting ``$1,000,000''; 
     and
       (C) in subparagraph (C), by--
       (i) striking ``$100,000'' and inserting ``$1,000,000''; and
       (ii) striking ``$500,000'' and inserting ``$2,000,000''.
       (2) Enforcement of investment advisors act.--Section 
     209(e)(2) of the Investment Advisors Act of 1940 (15 U.S.C. 
     80b-9(e)(2)) is amended--
       (A) in subparagraph (A), by--
       (i) striking ``$5,000'' and inserting ``$100,000''; and
       (ii) striking ``$50,000'' and inserting ``$250,000'';
       (B) in subparagraph (B), by--
       (i) striking ``$50,000'' and inserting ``$500,000''; and
       (ii) striking ``$250,000'' and inserting ``$1,000,000''; 
     and
       (C) in subparagraph (C), by--
       (i) striking ``$100,000'' and inserting ``$1,000,000''; and
       (ii) striking ``$500,000'' and inserting ``$2,000,000''.

     SEC. 608. AUTHORITY TO OBTAIN FINANCIAL RECORDS.

       Section 21(h) of the Securities Exchange Act of 1934 (15 
     U.S.C. 78u(h)) is amended--
       (1) by striking paragraphs (2) through (8);
       (2) in paragraph (9), by striking ``(9)(A)'' and all that 
     follows through ``(B) The'' and inserting ``(3) The'';
       (3) by inserting after paragraph (1), the following:
       ``(2) Access to financial records.--
       ``(A) In general.--Notwithstanding section 1105 or 1107 of 
     the Right to Financial Privacy Act of 1978, the Commission 
     may obtain access to and copies of, or the information 
     contained in, financial records of any person held by a 
     financial institution, including the financial records of a 
     customer, without notice to that person, when it acts 
     pursuant to a subpoena authorized by a formal order of 
     investigation of the Commission and issued under the 
     securities laws or pursuant to an administrative or judicial 
     subpoena issued in a proceeding or action to enforce the 
     securities laws.
       ``(B) Nondisclosure of requests.--If the Commission so 
     directs in its subpoena, no financial institution, or 
     officer, director, partner, employee, shareholder, 
     representative or agent of such financial institution, shall, 
     directly or indirectly, disclose that records have been 
     requested or provided in accordance with subparagraph (A), if 
     the Commission finds reason to believe that such disclosure 
     may--
       ``(i) result in the transfer of assets or records outside 
     the territorial limits of the United States;
       ``(ii) result in improper conversion of investor assets;
       ``(iii) impede the ability of the Commission to identify, 
     trace, or freeze funds involved in any securities 
     transaction;
       ``(iv) endanger the life or physical safety of an 
     individual;
       ``(v) result in flight from prosecution;
       ``(vi) result in destruction of or tampering with evidence;
       ``(vii) result in intimidation of potential witnesses; or

[[Page 12708]]

       ``(viii) otherwise seriously jeopardize an investigation or 
     unduly delay a trial.'';
       (4) by striking paragraph (10); and
       (5) by redesignating paragraphs (11), (12), and (13) as 
     paragraphs (4), (5), and (6), respectively.
                                  ____

  SA 4250. Mr. LEVIN 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:

       Amend Section 108 by creating a new (d) and relettering the 
     rest of the section accordingly:
       ``(d) Review of Stock Option Accounting Treatment.--A 
     standard setting body described in paragraph (1) and funded 
     pursuant to Section 109 shall review the accounting treatment 
     of employee stock options and shall, within one year of the 
     date of enactment of this Act, adopt an appropriate generally 
     accepted accounting principle for the treatment of employee 
     stock options.''.
                                  ____

  SA 4251. Mr. LEVIN 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 114, between lines 2 and 3, insert the following:

     SEC. 605. ADMINISTRATIVE PROCEEDINGS REGARDING BANS ON 
                   SERVICE.

       (a) Securities Exchange Act of 1934.--Section 21C of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78u-3) is amended 
     by adding at the end the following new subsection:
       ``(f) Authority of the Commission To Prohibit Persons From 
     Serving as Officers and Directors.--In any cease-and-desist 
     proceeding under subsection (a), the Commission may issue an 
     order to prohibit, conditionally or unconditionally, and 
     permanently or for such period of time as it shall determine, 
     any person who has violated section 10(b), or the rules or 
     regulations thereunder, from acting as an officer or director 
     of any issuer that has a class or securities registered 
     pursuant to section 12, or that is required to file reports 
     pursuant to section 15(d), if the conduct of that person 
     demonstrates unfitness to serve as an officer or director of 
     any such issuer.''.
       (b) Securities Act of 1933.--Section 8A of the Securities 
     Act of 1933 (15 U.S.C. 77h-1) is amended by adding at the end 
     the following new subsection:
       ``(f) Authority of the Commission To Prohibit Persons From 
     Serving as Officers and Directors.--In any cease-and-desist 
     proceeding under subsection (a), the Commission may issue an 
     order to prohibit, conditionally or unconditionally, and 
     permanently or for such period of time as it shall determine, 
     any person who has violated section 17(a)(1) from acting as 
     an officer or director of any issuer that has a class or 
     securities registered pursuant to section 12 of the 
     Securities Exchange Act of 1934, or that is required to file 
     reports pursuant to section 15(d) of that Act, if the conduct 
     of that person demonstrates unfitness to serve as an officer 
     or director of any such issuer.''.

     SEC. 606. AUTHORITY TO ASSESS CIVIL MONEY PENALTIES.

       (a) Securities Act of 1933.--Section 8A of the Securities 
     Act of 1933 (15 U.S.C. 77h-1) is amended by adding at the end 
     a new subsection as follows:
       ``(g) Authority of the Commission To Assess Money 
     Penalty.--
       ``(1) In general.--In any cease-and-desist proceeding under 
     subsection (a), the Commission may impose a civil monetary 
     penalty if it finds, on the record after notice and 
     opportunity for hearing, that a person is violating, has 
     violated, is about to violate, or has been or will be the 
     cause of the violation of, any provision of this title or any 
     rule or regulation thereunder, and that such penalty is in 
     the public interest.
       ``(2) Maximum amount of penalty.--
       ``(A) First tier.--The maximum amount of penalty for each 
     act or omission described in paragraph (1) shall be $100,000 
     for a natural person or $250,000 for any other person.
       ``(B) Second tier.--Notwithstanding subparagraph (A), the 
     maximum amount of penalty for such act or omission described 
     in paragraph (1) shall be $500,000 for a natural person or 
     $1,000,000 for any other person, if the act or omission 
     involved fraud, deceit, manipulation, or deliberate or 
     reckless disregard of a statutory or regulatory requirement.
       ``(C) Third tier.--Notwithstanding subparagraphs (A) and 
     (B), the maximum amount of penalty for each act or omission 
     described in paragraph (1) shall be $1,000,000 for a natural 
     person or $2,000,000 for any other person, if--
       ``(i) the act or omission involved fraud, deceit, 
     manipulation, or deliberate or reckless disregard of a 
     statutory or regulatory requirement; and
       ``(ii) such act or omission directly or indirectly resulted 
     in substantial losses or created a significant risk of 
     substantial losses to other persons or resulted in 
     substantial pecuniary gain to the person who committed the 
     act or omission.''.
       (b) Securities Exchange Act of 1934.--Section 21B(a) of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78u-2(a)) is 
     amended--
       (1) in paragraph (4), by striking ``supervision;'' and all 
     that follows through the end of the subsection and inserting 
     ``supervision.'';
       (2) by redesignating paragraphs (1) through (4) as 
     subparagraphs (A) through (D), respectively, and moving the 
     margins 2 ems to the right;
       (3) by inserting ``that such penalty is in the public 
     interest and'' after ``hearing,'';
       (4) by striking ``In any proceeding'' and inserting the 
     following:
       ``(1) In general.--In any proceeding''; and
       (5) by adding at the end the following:
       ``(2) Other money penalties.--In any proceeding under 
     section 21C against any person, the Commission may impose a 
     civil monetary penalty if it finds, on the record after 
     notice and opportunity for hearing, that such person is 
     violating, has violated, is about to violate, or has been or 
     will be the cause of the violation of, any provision of this 
     title or any rule or regulation thereunder, and that such 
     penalty is in the public interest.''.
       (c) Investment Company Act of 1940.--Section 9(d)(1) of the 
     Investment Company Act of 1940 (15 U.S.C. 80a-9(d)(1)) is 
     amended--
       (1) in subparagraph (C), by striking ``therein;'' and all 
     that follows through the end of the paragraph and inserting 
     ``supervision.'';
       (2) by redesignating subparagraphs (A) through (C) as 
     clauses (i) through (iii), respectively, and moving the 
     margins 2 ems to the right;
       (3) by inserting ``that such penalty is in the public 
     interest and'' after ``hearing,'';
       (4) by striking ``In any proceeding'' and inserting the 
     following:
       ``(A) In general.--In any proceeding''; and
       (5) by adding at the end the following:
       ``(B) Other money penalties.--In any proceeding under 
     subsection (f) against any person, the Commission may impose 
     a civil monetary penalty if it finds, on the record after 
     notice and opportunity for hearing, that such person is 
     violating, has violated, is about to violate, or has been or 
     will be the cause of the violation of, any provision of this 
     title or any rule or regulation thereunder, and that such 
     penalty is in the public interest.''.
       (d) Investment Advisers Act of 1940.--Section 203(i)(1) of 
     the Investment Advisers Act of 1940 (15 U.S.C. 80b-3(i)(1)) 
     is amended--
       (1) in subparagraph (D), by striking ``supervision;'' and 
     all that follows through the end of the paragraph and 
     inserting ``supervision.'';
       (2) by redesignating subparagraphs (A) through (D) as 
     clauses (i) through (iv), respectively, and moving the 
     margins 2 ems to the right;
       (3) by inserting ``that such penalty is in the public 
     interest and'' after ``hearing,'';
       (4) by striking ``In any proceeding'' and inserting the 
     following:
       ``(A) In general.--In any proceeding''; and
       (5) by adding at the end the following:
       ``(B) Other money penalties.--In any proceeding under 
     subsection (k) against any person, the Commission may impose 
     a civil monetary penalty if it finds, on the record after 
     notice and opportunity for hearing, that such person is 
     violating, has violated, is about to violate, or has been or 
     will be the cause of the violation of, any provision of this 
     title or any rule or regulation thereunder, and that such 
     penalty is in the public interest.''.

     SEC. 607. INCREASED MAXIMUM CIVIL MONEY PENALTIES.

       (a) Securities Act of 1933.--Section 20(d)(2) of the 
     Securities Act of 1933 (15 U.S.C. 77t(d)(2)) is amended--
       (1) in subparagraph (A)(i), by--
       (A) striking ``$5,000'' and inserting ``$100,000''; and
       (B) striking ``$50,000'' and inserting ``$250,000'';
       (2) in subparagraph (B)(i), by--
       (A) striking ``$50,000'' and inserting ``$500,000''; and

[[Page 12709]]

       (B) striking ``$250,000'' and inserting ``$1,000,000''; and
       (3) in subparagraph (C)(i), by--
       (A) striking ``$100,000'' and inserting ``$1,000,000''; and
       (B) striking ``$500,000'' and inserting ``$2,000,000''.
       (b) Securities Exchange Act of 1934.--
       (1) Penalties.--Section 32 of the Securities Exchange Act 
     of 1934 (15 U.S.C. 78ff) is amended--
       (A) in subsection (b), by striking ``$100'' and inserting 
     ``$10,000''; and
       (B) in subsection (c)--
       (i) in paragraph (1)(B), by striking ``$10,000'' and 
     inserting ``$500,000''; and
       (ii) in paragraph (2)(B), by striking ``$10,000'' and 
     inserting ``$500,000''.
       (2) Insider trading.--Section 21A(a)(3) of the Securities 
     Exchange Act of 1934 (15 U.S.C. 78u-1(a)(3)) is amended by 
     striking ``$1,000,000'' and inserting ``$2,000,000''.
       (3) Administrative proceedings.--Section 21B(b) of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78u-2(b)) is 
     amended--
       (A) in paragraph (1), by--
       (i) striking ``$5,000'' and inserting ``$100,000''; and
       (ii) striking ``$50,000'' and inserting ``$250,000'';
       (B) in paragraph (2), by--
       (i) striking ``$50,000'' and inserting ``$500,000''; and
       (ii) striking ``$250,000'' and inserting ``$1,000,000''; 
     and
       (C) in paragraph (3), by--
       (i) striking ``$100,000'' and inserting ``$1,000,000''; and
       (ii) striking ``$500,000'' and inserting ``$12,000,000''.
       (4) Civil actions.--Section 21(d)(3)(B) of the Securities 
     Exchange Act of 1934 (15 U.S.C. 78u(d)(3)(B)) is amended--
       (A) in clause (i), by--
       (i) striking ``$5,000'' and inserting ``$100,000''; and
       (ii) striking ``$50,000'' and inserting ``$250,000'';
       (B) in clause (ii), by--
       (i) striking ``$50,000'' and inserting ``$500,000''; and
       (ii) striking ``$250,000'' and inserting ``$1,000,000''; 
     and
       (C) in clause (iii), by--
       (i) striking ``$100,000'' and inserting ``$1,000,000''; and
       (ii) striking ``$500,000'' and inserting ``$2,000,000''.
       (c) Investment Company Act of 1940.--
       (1) Ineligibility.--Section 9(d)(2) of the Investment 
     Company Act of 1940 (15 U.S.C. 80a-9(d)(2)) is amended--
       (A) in subparagraph (A), by--
       (i) striking ``$5,000'' and inserting ``$100,000''; and
       (ii) striking ``$50,000'' and inserting ``$250,000'';
       (B) in subparagraph (B), by--
       (i) striking ``$50,000'' and inserting ``$500,000''; and
       (ii) striking ``$250,000'' and inserting ``$1,000,000''; 
     and
       (C) in subparagraph (C), by--
       (i) striking ``$100,000'' and inserting ``$1,000,000''; and
       (ii) striking ``$500,000'' and inserting ``$2,000,000''.
       (2) Enforcement investment company act.--Section 42(e)(2) 
     of the Investment Company Act of 1940 (15 U.S.C. 80a-
     41(e)(2)) is amended--
       (A) in subparagraph (A), by--
       (i) striking ``$5,000'' and inserting ``$100,000''; and
       (ii) striking ``$50,000'' and inserting ``$250,000'';
       (B) in subparagraph (B), by--
       (i) striking ``$50,000'' and inserting ``$500,000''; and
       (ii) striking ``$250,000'' and inserting ``$1,000,000''; 
     and
       (C) in subparagraph (C), by--
       (i) striking ``$100,000'' and inserting ``$1,000,000''; and
       (ii) striking ``$500,000'' and inserting ``$2,000,000''.
       (d) Investment Advisors Act of 1940.--
       (1) Registration.--Section 203(i)(2) of the Investment 
     Advisors Act of 1940 (15 U.S.C. 80b-3(i)(2)) is amended--
       (A) in subparagraph (A), by--
       (i) striking ``$5,000'' and inserting ``$100,000''; and
       (ii) striking ``$50,000'' and inserting ``$250,000'';
       (B) in subparagraph (B), by--
       (i) striking ``$50,000'' and inserting ``$500,000''; and
       (ii) striking ``$250,000'' and inserting ``$1,000,000''; 
     and
       (C) in subparagraph (C), by--
       (i) striking ``$100,000'' and inserting ``$1,000,000''; and
       (ii) striking ``$500,000'' and inserting ``$2,000,000''.
       (2) Enforcement of investment advisors act.--Section 
     209(e)(2) of the Investment Advisors Act of 1940 (15 U.S.C. 
     80b-9(e)(2)) is amended--
       (A) in subparagraph (A), by--
       (i) striking ``$5,000'' and inserting ``$100,000''; and
       (ii) striking ``$50,000'' and inserting ``$250,000'';
       (B) in subparagraph (B), by--
       (i) striking ``$50,000'' and inserting ``$500,000''; and
       (ii) striking ``$250,000'' and inserting ``$1,000,000''; 
     and
       (C) in subparagraph (C), by--
       (i) striking ``$100,000'' and inserting ``$1,000,000''; and
       (ii) striking ``$500,000'' and inserting ``$2,000,000''.

     SEC. 608. AUTHORITY TO OBTAIN FINANCIAL RECORDS.

       Section 21(h) of the Securities Exchange Act of 1934 (15 
     U.S.C. 78u(h)) is amended--
       (1) by striking paragraphs (2) through (8);
       (2) in paragraph (9), by striking ``(9)(A)'' and all that 
     follows through ``(B) The'' and inserting ``(3) The'';
       (3) by inserting after paragraph (1), the following:
       ``(2) Access to financial records.--
       ``(A) In general.--Notwithstanding section 1105 or 1107 of 
     the Right to Financial Privacy Act of 1978, the Commission 
     may obtain access to and copies of, or the information 
     contained in, financial records of any person held by a 
     financial institution, including the financial records of a 
     customer, without notice to that person, when it acts 
     pursuant to a subpoena authorized by a formal order of 
     investigation of the Commission and issued under the 
     securities laws or pursuant to an administrative or judicial 
     subpoena issued in a proceeding or action to enforce the 
     securities laws.
       ``(B) Nondisclosure of requests.--If the Commission so 
     directs in its subpoena, no financial institution, or 
     officer, director, partner, employee, shareholder, 
     representative or agent of such financial institution, shall, 
     directly or indirectly, disclose that records have been 
     requested or provided in accordance with subparagraph (A), if 
     the Commission finds reason to believe that such disclosure 
     may--
       ``(i) result in the transfer of assets or records outside 
     the territorial limits of the United States;
       ``(ii) result in improper conversion of investor assets;
       ``(iii) impede the ability of the Commission to identify, 
     trace, or freeze funds involved in any securities 
     transaction;
       ``(iv) endanger the life or physical safety of an 
     individual;
       ``(v) result in flight from prosecution;
       ``(vi) result in destruction of or tampering with evidence;
       ``(vii) result in intimidation of potential witnesses; or
       ``(viii) otherwise seriously jeopardize an investigation or 
     unduly delay a trial.'';
       (4) by striking paragraph (10); and
       (5) by redesignating paragraphs (11), (12), and (13) as 
     paragraphs (4), (5), and (6), respectively.
                                  ____

  SA 4252. Mr. LEVIN 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 93, strike line 22, and insert the following: 
     ``sion shall specify.
       ``(4) Certain information to be included.--Disclosures 
     required by paragraph (1)(B)(ii) shall include whether any 
     payment was made through the tender of a security and, if so, 
     the number of shares tendered.
       ``(5) Deadline for rulemaking.--The Commission shall--
       ``(A) propose rules to implement this subsection, not later 
     than 90 days after the date of enactment of this subsection; 
     and
       ``(b) issue final rules to implement this subsection, not 
     later than 180 days after that date of enactment.''.
                                  ____

  SA 4253. Mr. LEVIN 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 114, between lines 2 and 3, insert the following:

[[Page 12710]]



     SEC. 605. ADMINISTRATIVE PROCEEDINGS REGARDING BANS ON 
                   SERVICE.

       (a) Securities Exchange Act of 1934.--Section 21C of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78u-3) is amended 
     by adding at the end the following new subsection:
       ``(f) Authority of the Commission To Prohibit Persons From 
     Serving as Officers and Directors.--In any cease-and-desist 
     proceeding under subsection (a), the Commission may issue an 
     order to prohibit, conditional or unconditionally, and 
     permanently or for such period of time as it shall determine, 
     any person who has violated section 10(b), or the rules or 
     regulations thereunder, from acting as an officer or director 
     of any issuer that has a class or securities registered 
     pursuant to section 12, or that is required to file reports 
     pursuant to section 15(d), if the conduct of that person 
     demonstrates unfitness to serve as an officer or director of 
     any such issuer.''.
       (b) Securities Act of 1933.--Section 8A of the Securities 
     Act of 1933 (15 U.S.C. 77h-1) is amended by adding at the end 
     the following new subsection:
       ``(f) Authority of the Commission To Prohibit Persons From 
     Serving as Officer and Directors.--In any cease-and-desist 
     proceeding under subsection (a), the Commission may issue an 
     order to prohibit, conditional or unconditionally, and 
     permanently or for such period of time as it shall determine, 
     any person who has violated section 17(a)(1) from acting as 
     an officer or director of any issuer that has a class or 
     securities registered pursuant to section 12 of the 
     Securities Exchange Act of 1934, or that is required to file 
     reports pursuant to section 15(d) of that Act, if the conduct 
     of that person demonstrates unfitness to serve as an officer 
     or director of any such issuer.''.

     SEC. 606. AUTHORITY TO ASSESS CIVIL MONEY PENALTIES.

       (a) Securities Act of 1933.--Section 8A of the Securities 
     Act of 1933 (15 U.S.C. 77h-1) is amended by adding at the end 
     a new subsection as follows:
       ``(g) Authority of the Commission To Assess Money 
     Penalty.--
       ``(1) In general.--In any cease-and-desist proceeding under 
     subsection (a), the Commission may impose a civil monetary 
     penalty if it finds, on the record after notice and 
     opportunity for hearing, that a person is violating, has 
     violated, is about to violate, or has been or will be the 
     cause of the violation of, any provision of this title or any 
     rule or regulation thereunder, and that such penalty is in 
     the public interest.
       ``(2) Maximum amount of penalty.--
       ``(A) First tier.--The maximum amount of penalty for each 
     act or omission described in paragraph (1) shall be $100,000 
     for a natural person or $250,000 for any other person.
       ``(B) Second tier.--Notwithstanding subparagraph (A), the 
     maximum amount of penalty for such act or omission described 
     in paragraph (1) shall be $500,000 for a natural person or 
     $1,000,000 for any other person, if the act or omission 
     involved fraud, deceit, manipulation, or deliberate or 
     reckless disregard of a statutory or regulatory requirement.
       ``(C) Third tier.--Notwithstanding subparagraphs (A) and 
     (B), the maximum amount of penalty for each act or omission 
     described in paragraph (1) shall be $1,000,000 for a natural 
     person or $2,000,000 for any other person, if--
       ``(i) the act or omission involved fraud, deceit, 
     manipulation, or deliberate or reckless disregard of a 
     statutory or regulatory requirement; and
       ``(ii) such act or omission directly or indirectly resulted 
     in substantial losses or created a significant risk of 
     substantial losses to other persons or resulted in 
     substantial pecuniary gain to the person who committed the 
     act or omission.''.
       (b) Securities Exchange Act of 1934.--Section 21B(a) of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78u-2(a)) is 
     amended--
       (1) in paragraph (4), by striking ``supervision;'' and all 
     that follows through the end of the subsection and inserting 
     ``supervision.'';
       (2) by redesignating paragraphs (1) through (4) as 
     subparagraphs (A) through (D), respectively, and moving the 
     margins 2 ems to the right;
       (3) by inserting ``that such penalty is in the public 
     interest and'' after ``hearing,'';
       (4) by striking ``In any proceeding'' and inserting the 
     following:
       ``(1) In general.--In any proceeding''; and
       (5) by adding at the end the following:
       ``(2) Other money penalties.--In any proceeding under 
     section 21C against any person, the Commission may impose a 
     civil monetary penalty if it finds, on the record after 
     notice and opportunity for hearing, that such person is 
     violating, has violated, is about to violate, or has been or 
     will be the cause of the violation of, any provision of this 
     title or any rule or regulation thereunder, and that such 
     penalty is in the public interest.''.
       (c) Investment Company Act of 1940.--Section 9(d)(1) of the 
     Investment Company Act of 1940 (15 U.S.C. 80a-9(d)(1)) is 
     amended--
       (1) in subparagraph (C), by striking ``therein;'' and all 
     that follows through the end of the paragraph and inserting 
     ``supervision.'';
       (2) by redesignating subparagraphs (A) through (C) as 
     clauses (i) through (iii), respectively, and moving the 
     margins 2 ems to the right;
       (3) by inserting ``that such penalty is in the public 
     interest and'' after ``hearing,'';
       (4) by striking ``In any proceeding'' and inserting the 
     following:
       ``(A) In general.--In any proceeding''; and
       (5) by adding at the end the following:
       ``(B) Other money penalties.--In any proceeding under 
     subsection (f) against any person, the Commission may impose 
     a civil monetary penalty if it finds, on the record after 
     notice and opportunity for hearing, that such person is 
     violating, has violated, is about to violate, or has been or 
     will be the cause of the violation of, any provision of this 
     title or any rule or regulation thereunder, and that such 
     penalty is in the public interest.''.
       (d) Investment Advisers Act of 1940.--Section 203(i)(1) of 
     the Investment Advisers Act of 1940 (15 U.S.C. 80b-3(i)(1)) 
     is amended--
       (1) in subparagraph (D), by striking ``supervision;'' and 
     all that follows through the end of the paragraph and 
     inserting ``supervision.'';
       (2) by redesignating subparagraphs (A) through (D) as 
     clauses (i) through (iv), respectively, and moving the 
     margins 2 ems to the right;
       (3) by inserting ``that such penalty is in the public 
     interest and'' after ``hearing,'';
       (4) by striking ``In any proceeding'' and inserting the 
     following:
       ``(A) In general.--In any proceeding''; and
       (5) by adding at the end the following:
       ``(B) Other money penalties.--In any proceeding under 
     subsection (k) against any person, the Commission may impose 
     a civil monetary penalty if it finds, on the record after 
     notice and opportunity for hearing, that such person is 
     violating, has violated, is about to violate, or has been or 
     will be the cause of the violation of, any provision of this 
     title or any rule or regulation thereunder, and that such 
     penalty is in the public interest.''.

     SEC. 607. INCREASED MAXIMUM CIVIL MONEY PENALTIES.

       (a) Securities Act of 1933.--Section 20(d)(2) of the 
     Securities Act of 1933 (15 U.S.C. 77t(d)(2)) is amended--
       (1) in subparagraph (A)(i), by--
       (A) striking ``$5,000'' and inserting ``$100,000''; and
       (B) striking ``$50,000'' and inserting ``$250,000'';
       (2) in subparagraph (B)(i), by--
       (A) striking ``$50,000'' and inserting ``$500,000''; and
       (B) striking ``$250,000'' and inserting ``$1,000,000''; and
       (3) in subparagraph (C)(i), by--
       (A) striking ``$100,000'' and inserting ``$1,000,000''; and
       (B) striking ``$500,000'' and inserting ``$2,000,000''.
       (b) Securities Exchange Act of 1934.--
       (1) Penalties.--Section 32 of the Securities Exchange Act 
     of 1934 (15 U.S.C. 78ff) is amended--
       (A) in subsection (b), by striking ``$100'' and inserting 
     ``$10,000''; and
       (B) in subsection (c)--
       (i) in paragraph (1)(B), by striking ``$10,000'' and 
     inserting ``$500,000''; and
       (ii) in paragraph (2)(B), by striking ``$10,000'' and 
     inserting ``$500,000''.
       (2) Insider trading.--Section 21A(a)(3) of the Securities 
     Exchange Act of 1934 (15 U.S.C. 78u-1(a)(3)) is amended by 
     striking ``$1,000,000'' and inserting ``$2,000,000''.
       (3) Administrative proceedings.--Section 21B(b) of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78u-2(b)) is 
     amended--
       (A) in paragraph (1), by--
       (i) striking ``$5,000'' and inserting ``$100,000''; and
       (ii) striking ``$50,000'' and inserting ``$250,000'';
       (B) in paragraph (2), by--
       (i) striking ``$50,000'' and inserting ``$500,000''; and
       (ii) striking ``$250,000'' and inserting ``$1,000,000''; 
     and
       (C) in paragraph (3), by--
       (i) striking ``$100,000'' and inserting ``$1,000,000''; and
       (ii) striking ``$500,000'' and inserting ``$2,000,000''.
       (4) Civil actions.--Section 21(d)(3)(B) of the Securities 
     Exchange Act of 1934 (15 U.S.C. 78u(d)(3)(B)) is amended--
       (A) in clause (i), by--
       (i) striking ``$5,000'' and inserting ``$100,000''; and
       (ii) striking ``$50,000'' and inserting ``$250,000'';
       (B) in clause (ii), by--
       (i) striking ``$50,000'' and inserting ``$500,000''; and
       (ii) striking ``$250,000'' and inserting ``$1,000,000''; 
     and
       (C) in clause (iii), by--
       (i) striking ``$100,000'' and inserting ``$1,000,000''; and
       (ii) striking ``$500,000'' and inserting ``$2,000,000''.
       (c) Investment Company Act of 1940.--
       (1) Ineligibility.--Section 9(d)(2) of the Investment 
     Company Act of 1940 (15 U.S.C. 80a-9(d)(2)) is amended--
       (A) in subparagraph (A), by--
       (i) striking ``$5,000'' and inserting ``$100,000''; and
       (ii) striking ``$50,000'' and inserting ``$250,000'';

[[Page 12711]]

       (B) in subparagraph (B), by--
       (i) striking ``$50,000'' and inserting ``$500,000''; and
       (ii) striking ``$250,000'' and inserting ``$1,000,000''; 
     and
       (C) in subparagraph (C), by--
       (i) striking ``$100,000'' and inserting ``$1,000,000''; and
       (ii) striking ``$500,000'' and inserting ``$2,000,000''.
       (2) Enforcement investment company act.--Section 42(e)(2) 
     of the Investment Company Act of 1940 (15 U.S.C. 80a-
     41(e)(2)) is amended--
       (A) in subparagraph (A), by--
       (i) striking ``$5,000'' and inserting ``$100,000''; and
       (ii) striking ``$50,000'' and inserting ``$250,000'';
       (B) in subparagraph (B), by--
       (i) striking ``$50,000'' and inserting ``$500,000''; and
       (ii) striking ``$250,000'' and inserting ``$1,000,000''; 
     and
       (C) in subparagraph (C), by--
       (i) striking ``$100,000'' and inserting ``$1,000,000''; and
       (ii) striking ``$500,000'' and inserting ``$2,000,000''.
       (d) Investment Advisors Act of 1940.--
       (1) Registration.--Section 203(i)(2) of the Investment 
     Advisors Act of 1940 (15 U.S.C. 80b-3(i)(2)) is amended--
       (A) in subparagraph (A), by--
       (i) striking ``$5,000'' and inserting ``$100,000''; and
       (ii) striking ``$50,000'' and inserting ``$250,000'';
       (B) in subparagraph (B), by--
       (i) striking ``$50,000'' and inserting ``$500,000''; and
       (ii) striking ``$250,000'' and inserting ``$1,000,000''; 
     and
       (C) in subparagraph (C), by--
       (i) striking ``$100,000'' and inserting ``$1,000,000''; and
       (ii) striking ``$500,000'' and inserting ``$2,000,000''.
       (2) Enforcement of investment advisors act.--Section 
     209(e)(2) of the Investment Advisors Act of 1940 (15 U.S.C. 
     80b-9(e)(2)) is amended--
       (A) in subparagraph (A), by--
       (i) striking ``$5,000'' and inserting ``$100,000''; and
       (ii) striking ``$50,000'' and inserting ``$250,000'';
       (B) in subparagraph (B), by--
       (i) striking ``$50,000'' and inserting ``$500,000''; and
       (ii) striking ``$250,000'' and inserting ``$1,000,000''; 
     and
       (C) in subparagraph (C), by--
       (i) striking ``$100,000'' and inserting ``$1,000,000''; and
       (ii) striking ``$500,000'' and inserting ``$2,000,000''.
                                  ____

  SA 4254. Mr. LEVIN 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 50, line 1, strike ``public (once'' and all that 
     follows through page 51, line 2 and insert the following: 
     ``public.
       ``(2) Contents.--The information reported under paragraph 
     (1) shall include--
       ``(A) the name of the sanctioned person;
       ``(B) a description of the sanction and the basis for its 
     imposition; and
       ``(C) such other information as the Board deems 
     appropriate.''.
                                  ____

  SA 4255. Mr. LEVIN 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 74, line 7, strike ``and'' and all that follows 
     through ``other'' on line 8, and insert the following:
       ```(3) the quality, acceptability, clarity, and 
     aggressiveness of the financial statements, financial 
     reports, accounting principles, and related decision-making 
     of the issuer; and
       ```(4) other''.
                                  ____

  SA 4256. Mr. LEVIN 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 84, line 8, strike ``If an issuer'' and all that 
     follows through line 20 and insert the following: ``If, as a 
     result of misconduct under the securities laws, an issuer is 
     required by the board of directors, auditor, regulatory 
     agency, bankruptcy official, civil or criminal settlement, 
     court, or other legal proceeding to prepare an accounting 
     restatement due to the material noncompliance of the issuer 
     with any financial reporting requirement under the securities 
     laws, the chief executive officer and chief financial officer 
     of the issuer shall reimburse the issuer for--
       ``(1) any bonus or other incentive-based or equity-based 
     compensation received by that person from the issuer during 
     the 12-month period following the first public issuance or 
     filing with the Commission (whichever first occurs) of the 
     document containing the financial information subject to 
     correction in such restatement; and''.
                                  ____

  SA 4257. Mr. LEVIN 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 73, beginning on line 17, strike ``amended by 
     adding'' and insert the following: ``amended--
       ``(1) in subsection (a)--
       ``(A) in paragraph (2), by striking `and' at the end;
       ``(B) by redesignating paragraph (3) as paragraph (4); and
       ``(C) by inserting after paragraph (2) the following:
       ```(3) a statement of opinion by the registered public 
     accounting firm on whether the financial statements of the 
     issuer are appropriate and fairly present, in all material 
     respects, the operations and financial condition of the 
     issuer; and'; and
       ``(2) by adding''.
                                  ____

  SA 4258. Mrs. CLINTON submitted an amendment intended to be proposed 
by her 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 99, between lines 15 and 16, insert the following:

     SEC. 408. ACCOUNTABILITY TO SHAREHOLDERS FOR ISSUANCE OF 
                   STOCK OPTIONS.

       (a) Rules Required.--Not later than 180 days after the date 
     of enactment of this Act, the Commission shall prescribe 
     final rules to ensure that--
       (1) all issuers require shareholder approval of any stock 
     option plan, stock purchase

[[Page 12712]]

     plan, or other arrangement by which employees may acquire an 
     equity interest in the issuer in exchange for consideration 
     that is less than the fair market value of the equity 
     interest at the time of the exchange;
       (2) the shareholder approval requirement under paragraph 
     (1) is waived whenever such approval is impracticable; and
       (3) shareholder approval of a plan or arrangement under 
     paragraph (1) is disclosed to the public immediately after 
     such approval, through the Internet or similar means of broad 
     distribution.
       (b) Report to Congress.--Not later than 180 days after the 
     date of enactment of this Act, the Commission shall report to 
     Congress on the issuance of the rules pursuant to subsection 
     (a).
                                  ____

  SA 4259. Mrs. FEINSTEIN submitted an amendment intended to be 
proposed by her 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 91, strike line 19 and all that follows through 
     page 93, line 22 and insert the following:

     SEC. 402. PROHIBITION ON LOANS TO OFFICERS AND DIRECTORS.

       Section 13 of the Securities Exchange Act of 1934 (15 
     U.S.C. 78m), as amended by this Act, is amended by adding at 
     the end the following:
       ``(k) Prohibition on Personal Loans to Executives.--
       ``(1) In general.--It shall be unlawful for any issuer, 
     directly or indirectly, to extend or maintain credit, or 
     arrange for the extension of credit, to or for any director 
     or executive officer (or equivalent thereof) of that issuer, 
     except as provided in paragraph (2).
       ``(2) Limitation.--Paragraph (1) does not preclude any 
     extension of credit under an open end credit plan (as defined 
     in section 103 of the Truth in Lending Act (15 U.S.C. 1602)) 
     that is--
       ``(A) made in the ordinary course of the consumer credit 
     business of an issuer;
       ``(B) of a type that is generally made available by the 
     issuer to the public; and
       ``(C) made on market terms, or terms that are no more 
     favorable than those offered by the issuer to the general 
     public for such loans.''.
                                  ____

  SA 4260. Mr. BINGAMAN 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 73, strike lines 3 through 14 and insert the 
     following:

     SEC. 203. AUDIT FIRM ROTATION

       Section 10A of the Securities Exchange Act of 1934 (15 
     U.S.C. 78j-1), as amended by this Act, is amended by adding 
     at the end the following:
       ``(j) Audit Firm Rotation.--It shall be unlawful for a 
     registered public accounting firm to provide audit services 
     to an issuer if that public accounting firm has performed 
     audit services for that issuer in each of the 5 previous 
     fiscal years of that issuer.''.
                                  ____

  SA 4261. Mr. SHELBY 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 107, line 22 add the following:
       (b) Study and Report on Aiding and Abetting Securities 
     Frauds.--
       (1) The Commission shall, not later than 1 year after the 
     adoption of the new rules on appearance and practice before 
     the Commission as required under this section of the bill, 
     complete a study to determine--
       (A) the number of securities professionals including 
     accountants, lawyers and other securities professionals 
     practicing before the Commission, who have been found to have 
     aided and abetted a violation of the securities laws or the 
     rules and regulations issued thereunder; and
       (B) the extent to which such violations indicate the 
     existence of a pattern or practice; and
       (C) the amount of shareholder value that was lost in the 
     instances where securities professionals are found to have 
     aided and abetted a violation of the securities laws; and
       (D) the amount of disgorgement, restitution or any other 
     fines or payments the Commission has obtained from securities 
     professionals who have aided and abetted violations of the 
     securities laws for such conduct; and
       (E) the amount of remuneration shareholders have received 
     in civil suits from securities professionals who have been 
     found to have committed primary violations of the securities 
     laws; and
       (F) the number of securities professionals who have been 
     found to have aided and abetted securities violations who 
     have been censured or denied the privilege of practicing 
     before the Commission for their aiding and abetting 
     activities.
                                  ____

  SA 4262. Mr. SHELBY 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 107, line 22 add the following:
       (b) Study and Report on Aiding and Abetting Securities 
     Frauds.--
       (1) The Commission shall, not later than 1 year after the 
     adoption of the new rules on appearance and practice before 
     the Commission as required under this section of the bill, 
     complete a study to determine--
       (A) the number of securities professionals including 
     accountants, lawyers and other securities professionals 
     practicing before the Commission, who have been found to have 
     aided and abetted a violation of the securities laws or the 
     rules and regulations issued thereunder; and
       (B) the extent to which such violations indicate the 
     existence of a pattern or practice; and
       (C) the amount of shareholder value that was lost in the 
     instances where securities professionals are found to have 
     aided and abetted a violation of the securities laws; and
       (D) the amount of disgorgement, restitution or any other 
     fines or payments the Commission has obtained from securities 
     professionals who have aided and abetted violations of the 
     securities laws for such conduct; and
       (E) the amount of remuneration shareholders have received 
     in civil suits from securities professionals who have been 
     found to have committed primary violations of the securities 
     laws; and
       (F) the number of securities professionals who have been 
     found to have aided and abetted securities violations who 
     have been censured or denied the privilege of practicing 
     before the Commission for their aiding and abetting 
     activities.
                                  ____

  SA 4263. Mr. ENZI 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

[[Page 12713]]

and Exchange Commission resources and oversight, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 74, strike lines 1 through 4 and insert the 
     following:
       ``(2) all material alternative treatments of financial 
     information within generally accepted accounting principles 
     that have been discussed with management officials of the 
     issuer, ramifications of the use of such material''.
                                  ____

  SA 4264. Mr. ENZI 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 78, strike lines 15 through 24, and insert the 
     following:
       In supervising public accounting firms that are not 
     registered by the Board and their associated persons, 
     appropriate State regulatory authorities should make an 
     independent determination of the proper standards applicable, 
     particularly taking into consideration the size and nature of 
     the business of the accounting firms they supervise and the 
     size and nature of the business of the clients of those 
     firms. The standards applied by the Board under this Act 
     could create undue burdens and costs if applied without 
     independent consideration to nonpublic accounting companies 
     and other accounting firms that provide services to small 
     business clients.
       On page 68, strike line 22 and all that follows through 
     page 69, line 9, and insert the following:
       ``(g) Prohibited Activities.--A registered public 
     accounting firm (and any associated person of that firm, to 
     the extent determined appropriate by the Commission) shall 
     not be deemed independent if such firm or person performs for 
     any issuer any audit required by this title or the rules of 
     the Commission under this title or, beginning 180 days after 
     the date of commencement of the operations of the Public 
     Company Accounting Oversight Board established under section 
     101 of the Public Company Accounting Reform and Investor 
     Protection Act of 2002 (in this section referred to as the 
     `Board'), the rules of the Board, to provide to that issuer, 
     contemporaneously with the audit, the following non-audit 
     services:
       On page 70, strike lines 3 and all that follows through 
     page 73, line 2, and insert the following:
       (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.

     SEC. 202. PREAPPROVAL REQUIREMENTS.

       Section 10A of the Securities Exchange Act of 1934 (15 
     U.S.C. 78j-1), as amended by this Act, is amended by adding 
     at the end the following:
       ``(h) Preapproval Required for Non-Audit Services.--
       ``(1) In general.
       ``(A) Terms of provision of 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 (9) of subsection (g) for an audit 
     client, only if such services are provided in accordance with 
     policies and procedures established by the audit committee of 
     the issuer requiring the committee to approve in advance the 
     provision of non-audit services.
       ``(B) De minimus exception.--The preapproval requirement 
     under subparagraph (A) is waived with respect to the 
     provision of non-audit services for an issuer, if--
       ``(i) the aggregate amount of all such non-audit services 
     provided to the issuer constitutes not more than 5 percent of 
     the total amount of revenues paid by the issuer to its 
     auditor;
       ``(ii) such services were not recognized by the issuer at 
     the time of the engagement to be non-audit services; and
       ``(iii) such services are promptly brought to the attention 
     of the audit committee of the issuer and approved by the 
     audit committee prior to the completion of the audit, by 1 or 
     more members of the audit committee who are members of the 
     board of directors to whom authority to grant such approvals 
     has been delegated by the audit committee.
       ``(2) Disclosure to investors.--Policies and procedures for 
     approval by an audit committee of an issuer under this 
     subsection of a non-audit service to be performed by the 
     auditor of the issuer shall be disclosed to investors in 
     periodic reports required by section 13(a).
       ``(3) Delegation authority.--The audit committee of an 
     issuer may delegate to 1 or more designated members of the 
     audit committee who are independent directors of the board of 
     directors, the authority to grant preapprovals required by 
     this subsection. The decisions of any member to whom 
     authority is delegated under this paragraph to preapprove an 
     activity under this subsection shall be presented to the full 
     audit committee at each of its scheduled meetings.''.
                                  ____

  SA 4265. Mr. EDWARDS 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 108, line 15, insert before the end quotation marks 
     the following:
       ``(c) Rules of Professional Responsibility for Attorneys.--
     Not later than 180 days after the date of enactment of this 
     section, the Commission shall establish rules, in the public 
     interest and for the protection of investors, setting forth 
     minimum standards of professional conduct for attorneys 
     appearing and practicing before the Commission in the 
     representation of public companies, including a rule 
     requiring an attorney to report evidence of a material 
     violation of law by the company or any agent thereof to the 
     chief legal counsel or the chief executive officer of the 
     company (or the equivalent thereof) and, if the counsel or 
     officer does not appropriately respond to the evidence 
     (adopting, as necessary, appropriate remedial measures or 
     sanctions with respect to the violation), requiring the 
     attorney to report the evidence to the audit committee of the 
     board of directors or to another committee of the board of 
     directors comprised solely of directors not employed directly 
     or indirectly by the company, or to the board of directors.
                                  ____

  SA 4266. Mr. SCHUMER 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.   . MANDATORY RESTITUTION FOR FEDERAL CRIMES OF FRAUD.

       Section 1348 of title 18, United States Code as added by 
     this bill, is amended--
       (1) by striking ``all victims of any offense'' and all that 
     follows through the period and inserting the following: ``all 
     victims of any offense--
       ``(1) for which an enhanced penalty is provided under 
     section 2326; or
       ``(2) relating to a Federal crime of fraud under section 
     371, 1131, 1341, 1343, 1348, 1519, or 1520.''.
                                  ____

  SA 4267. Mr. DORGAN 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

[[Page 12714]]

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:

       Insert at the appropriate place:
       ``(c) Foreign Reincorporations.--This subsection shall not 
     be interpreted or applied in any way to allow any issue to 
     lessen the legal force of the statement required under this 
     subsection, by reincorporating, or engaging in other 
     transaction that result in the transfer of corporate domicile 
     or offices from inside to outside the United States.
                                  ____

  SA 4268. Mr. SMITH of Oregon 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. __. GAO ANALYSIS AND REPORT.

       (a) Analysis.--The Comptroller General of the United States 
     shall, in consultation with the Commission and the Department 
     of Labor, shall conduct an analysis of--
       (1) decline in the value of the securities of publicly 
     traded companies under investigation by the Commission for 
     possible violations of the Federal securities laws; and
       (2) how such declines have affected assets held in public 
     and private pension plans.
       (b) Report.--Not later than 6 months after the date of 
     enactment of this Act, the Comptroller shall submit a report 
     to Congress on the results of the analysis conducted under 
     subsection (a).
                                  ____

  SA 4269. Mr. DASCHLE (for Mr. Levin (for himself, Mr. Nelson of 
Florida, Mr. Harkin, Mr. Corzine, and Mr. Biden)) 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:

       In the amendment on page 2 in line 17 strike director. and 
     insert directors.

     SEC. 605. ADMINISTRATIVE PROCEEDINGS REGARDING BANS ON 
                   SERVICE.

       (a) Securities Exchange Act of 1934.--Section 21C of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78u-3) is amended 
     by adding at the end the following new subsection:
       ``(f) Authority of the Commission To Prohibit Persons From 
     Serving as Officers and Directors.--In any cease-and-desist 
     proceeding under subsection (a), the Commission may issue an 
     order to prohibit, conditionally or unconditionally, and 
     permanently or for such period of time as it shall determine, 
     any person who has violated section 10(b), or the rules or 
     regulations thereunder, from acting as an officer or director 
     of any issuer that has a class or securities registered 
     pursuant to section 12, or that is required to file reports 
     pursuant to section 15(d), if the conduct of that person 
     demonstrates unfitness to serve as an officer or director of 
     any such issuer.''.
       (b) Securities Act of 1933.--Section 8A of the Securities 
     Act of 1933 (15 U.S.C. 77h-1) is amended by adding at the end 
     the following new subsection:
       ``(f) Authority of the Commission To Prohibit Persons From 
     Serving as Officer and Directors.--In any cease-and-desist 
     proceeding under subsection (a), the Commission may issue an 
     order to prohibit, conditionally or unconditionally, and 
     permanently or for such period of time as it shall determine, 
     any person who has violated section 17(a)(1) from acting as 
     an officer or director of any issuer that has a class or 
     securities registered pursuant to section 12 of the 
     Securities Exchange Act of 1934, or that is required to file 
     reports pursuant to section 15(d) of that Act, if the conduct 
     of that person demonstrates unfitness to serve as an officer 
     or director of any such issuer.''.

     SEC. 606. AUTHORITY TO ASSESS CIVIL MONEY PENALTIES.

       (a) Securities Act of 1933.--Section 8A of the Securities 
     Act of 1933 (15 U.S.C. 77h-1) is amended by adding at the end 
     a new subsection as follows:
       ``(g) Authority of the Commission To Assess Money 
     Penalty.--
       ``(1) In general.--In any cease-and-desist proceeding under 
     subsection (a), the Commission may impose a civil monetary 
     penalty if it finds, on the record after notice and 
     opportunity for hearing, that a person is violating, has 
     violated, is about to violate, or has been or will be the 
     cause of the violation of, any provision of this title or any 
     rule or regulation thereunder, and that such penalty is in 
     the public interest.
       ``(2) Maximum amount of penalty.--
       ``(A) First tier.--The maximum amount of penalty for each 
     act or omission described in paragraph (1) shall be $100,000 
     for a natural person or $250,000 for any other person.
       ``(B) Second tier.--Notwithstanding subparagraph (A), the 
     maximum amount of penalty for such act or omission described 
     in paragraph (1) shall be $500,000 for a natural person or 
     $1,000,000 for any other person, if the act or omission 
     involved fraud, deceit, manipulation, or deliberate or 
     reckless disregard of a statutory or regulatory requirement.
       ``(C) Third tier.--Notwithstanding subparagraphs (A) and 
     (B), the maximum amount of penalty for each act or omission 
     described in paragraph (1) shall be $1,000,000 for a natural 
     person or $2,000,000 for any other person, if--
       ``(i) the act or omission involved fraud, deceit, 
     manipulation, or deliberate or reckless disregard of a 
     statutory or regulatory requirement; and
       ``(ii) such act or omission directly or indirectly resulted 
     in substantial losses or created a significant risk of 
     substantial losses to other persons or resulted in 
     substantial pecuniary gain to the person who committed the 
     act or omission.''.
       (b) Securities Exchange Act of 1934.--Section 21B(a) of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78u-2(a)) is 
     amended--
       (1) in paragraph (4), by striking ``supervision;'' and all 
     that follows through the end of the subsection and inserting 
     ``supervision.'';
       (2) by redesignating paragraphs (1) through (4) as 
     subparagraphs (A) through (D), respectively, and moving the 
     margins 2 ems to the right;
       (3) by inserting ``that such penalty is in the public 
     interest and'' after ``hearing,'';
       (4) by striking ``In any proceeding'' and inserting the 
     following:
       ``(1) In general.--In any proceeding''; and
       (5) by adding at the end the following:
       ``(2) Other money penalties.--In any proceeding under 
     section 21C against any person, the Commission may impose a 
     civil monetary penalty if it finds, on the record after 
     notice and opportunity for hearing, that such person is 
     violating, has violated, is about to violate, or has been or 
     will be the cause of the violation of, any provision of this 
     title or any rule or regulation thereunder, and that such 
     penalty is in the public interest.''.
       (c) Investment Company Act of 1940.--Section 9(d)(1) of the 
     Investment Company Act of 1940 (15 U.S.C. 80a-9(d)(1)) is 
     amended--
       (1) in subparagraph (C), by striking ``therein;'' and all 
     that follows through the end of the paragraph and inserting 
     ``supervision.'';
       (2) by redesignating subparagraphs (A) through (C) as 
     clauses (i) through (iii), respectively, and moving the 
     margins 2 ems to the right;
       (3) by inserting ``that such penalty is in the public 
     interest and'' after ``hearing,'';
       (4) by striking ``In any proceeding'' and inserting the 
     following:
       ``(A) In general.--In any proceeding''; and
       (5) by adding at the end the following:
       ``(B) Other money penalties.--In any proceeding under 
     subsection (f) against any person, the Commission may impose 
     a civil monetary penalty if it finds, on the record after 
     notice and opportunity for hearing, that such person is 
     violating, has violated, is about to violate, or has been or 
     will be the cause of the violation of, any provision of this 
     title or any rule or regulation thereunder, and that such 
     penalty is in the public interest.''.
       (d) Investment Advisers Act of 1940.--Section 203(i)(1) of 
     the Investment Advisers Act of 1940 (15 U.S.C. 80b-3(i)(1)) 
     is amended--
       (1) in subparagraph (D), by striking ``supervision;'' and 
     all that follows through the end of the paragraph and 
     inserting ``supervision.'';
       (2) by redesignating subparagraphs (A) through (D) as 
     clauses (i) through (iv), respectively, and moving the 
     margins 2 ems to the right;
       (3) by inserting ``that such penalty is in the public 
     interest and'' after ``hearing,'';
       (4) by striking ``In any proceeding'' and inserting the 
     following:
       ``(A) In general.--In any proceeding''; and
       (5) by adding at the end the following:
       ``(B) Other money penalties.--In any proceeding under 
     subsection (k) against any person, the Commission may impose 
     a civil monetary penalty if it finds, on the record after 
     notice and opportunity for hearing, that such person is 
     violating, has violated, is

[[Page 12715]]

     about to violate, or has been or will be the cause of the 
     violation of, any provision of this title or any rule or 
     regulation thereunder, and that such penalty is in the public 
     interest.''.

     SEC. 607. INCREASED MAXIMUM CIVIL MONEY PENALTIES.

       (a) Securities Act of 1933.--Section 20(d)(2) of the 
     Securities Act of 1933 (15 U.S.C. 77t(d)(2)) is amended--
       (1) in subparagraph (A)(i), by--
       (A) striking ``$5,000'' and inserting ``$100,000''; and
       (B) striking ``$50,000'' and inserting ``$250,000'';
       (2) in subparagraph (B)(i), by--
       (A) striking ``$50,000'' and inserting ``$500,000''; and
       (B) striking ``$250,000'' and inserting ``$1,000,000''; and
       (3) in subparagraph (C)(i), by--
       (A) striking ``$100,000'' and inserting ``$1,000,000''; and
       (B) striking ``$500,000'' and inserting ``$2,000,000''.
       (b) Securities Exchange Act of 1934.--
       (1) Penalties.--Section 32 of the Securities Exchange Act 
     of 1934 (15 U.S.C. 78ff) is amended--
       (A) in subsection (b), by striking ``$100'' and inserting 
     ``$10,000''; and
       (B) in subsection (c)--
       (i) in paragraph (1)(B), by striking ``$10,000'' and 
     inserting ``$500,000''; and
       (ii) in paragraph (2)(B), by striking ``$2,000'' and 
     inserting ``$500,000''.
       (2) Insider trading.--Section 21A(a)(3) of the Securities 
     Exchange Act of 1934 (15 U.S.C. 78u-1(a)(3)) is amended by 
     striking ``$1,000,000'' and inserting ``$2,000,000''.
       (3) Administrative proceedings.--Section 21B(b) of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78u-2(b)) is 
     amended--
       (A) in paragraph (1), by--
       (i) striking ``$5,000'' and inserting ``$100,000''; and
       (ii) striking ``$50,000'' and inserting ``$250,000'';
       (B) in paragraph (2), by--
       (i) striking ``$50,000'' and inserting ``$500,000''; and
       (ii) striking ``$250,000'' and inserting ``$1,000,000''; 
     and
       (C) in paragraph (3), by--
       (i) striking ``$100,000'' and inserting ``$1,000,000''; and
       (ii) striking ``$500,000'' and inserting ``$2,000,000''.
       (4) Civil actions.--Section 21(d)(3)(B) of the Securities 
     Exchange Act of 1934 (15 U.S.C. 78u(d)(3)(B)) is amended--
       (A) in clause (i), by--
       (i) striking ``$5,000'' and inserting ``$100,000''; and
       (ii) striking ``$50,000'' and inserting ``$250,000'';
       (B) in clause (ii), by--
       (i) striking ``$50,000'' and inserting ``$500,000''; and
       (ii) striking ``$250,000'' and inserting ``$1,000,000''; 
     and
       (C) in clause (iii), by--
       (i) striking ``$100,000'' and inserting ``$1,000,000''; and
       (ii) striking ``$500,000'' and inserting ``$2,000,000''.
       (c) Investment Company Act of 1940.--
       (1) Ineligibility.--Section 9(d)(2) of the Investment 
     Company Act of 1940 (15 U.S.C. 80a-9(d)(2)) is amended--
       (A) in subparagraph (A), by--
       (i) striking ``$5,000'' and inserting ``$100,000''; and
       (ii) striking ``$50,000'' and inserting ``$250,000'';
       (B) in subparagraph (B), by--
       (i) striking ``$50,000'' and inserting ``$500,000''; and
       (ii) striking ``$250,000'' and inserting ``$1,000,000''; 
     and
       (C) in subparagraph (C), by--
       (i) striking ``$100,000'' and inserting ``$1,000,000''; and
       (ii) striking ``$500,000'' and inserting ``$2,000,000''.
       (2) Enforcement of investment company act.--Section 
     42(e)(2) of the Investment Company Act of 1940 (15 U.S.C. 
     80a-41(e)(2)) is amended--
       (A) in subparagraph (A), by--
       (i) striking ``$5,000'' and inserting ``$100,000''; and
       (ii) striking ``$50,000'' and inserting ``$250,000'';
       (B) in subparagraph (B), by--
       (i) striking ``$50,000'' and inserting ``$500,000''; and
       (ii) striking ``$250,000'' and inserting ``$1,000,000''; 
     and
       (C) in subparagraph (C), by--
       (i) striking ``$100,000'' and inserting ``$1,000,000''; and
       (ii) striking ``$500,000'' and inserting ``$2,000,000''.
       (d) Investment Advisors Act of 1940.--
       (1) Registration.--Section 203(i)(2) of the Investment 
     Advisors Act of 1940 (15 U.S.C. 80b-3(i)(2)) is amended--
       (A) in subparagraph (A), by--
       (i) striking ``$5,000'' and inserting ``$100,000''; and
       (ii) striking ``$50,000'' and inserting ``$250,000'';
       (B) in subparagraph (B), by--
       (i) striking ``$50,000'' and inserting ``$500,000''; and
       (ii) striking ``$250,000'' and inserting ``$1,000,000''; 
     and
       (C) in subparagraph (C), by--
       (i) striking ``$100,000'' and inserting ``$1,000,000''; and
       (ii) striking ``$500,000'' and inserting ``$2,000,000''.
       (2) Enforcement of investment advisors act.--Section 
     209(e)(2) of the Investment Advisors Act of 1940 (15 U.S.C. 
     80b-9(e)(2)) is amended--
       (A) in subparagraph (A), by--
       (i) striking ``$5,000'' and inserting ``$100,000''; and
       (ii) striking ``$50,000'' and inserting ``$250,000'';
       (B) in subparagraph (B), by--
       (i) striking ``$50,000'' and inserting ``$500,000''; and
       (ii) striking ``$250,000'' and inserting ``$1,000,000''; 
     and
       (C) in subparagraph (C), by--
       (i) striking ``$100,000'' and inserting ``$1,000,000''; and
       (ii) striking ``$500,000'' and inserting ``$2,000,000''.

     SEC. 608. AUTHORITY TO OBTAIN FINANCIAL RECORDS.

       Section 21(h) of the Securities Exchange Act of 1934 (15 
     U.S.C. 78u(h)) is amended--
       (1) by striking paragraphs (2) through (8);
       (2) in paragraph (9), by striking ``(9)(A)'' and all that 
     follows through ``(B) The'' and inserting ``(3) The'';
       (3) by inserting after paragraph (1), the following:
       ``(2) Access to financial records.--
       ``(A) In general.--Notwithstanding section 1105 or 1107 of 
     the Right to Financial Privacy Act of 1978, the Commission 
     may obtain access to and copies of, or the information 
     contained in, financial records of any person held by a 
     financial institution, including the financial records of a 
     customer, without notice to that person, when it acts 
     pursuant to a subpoena authorized by a formal order of 
     investigation of the Commission and issued under the 
     securities laws or pursuant to an administrative or judicial 
     subpoena issued in a proceeding or action to enforce the 
     securities laws.
       ``(B) Nondisclosure of requests.--If the Commission so 
     directs in its subpoena, no financial institution, or 
     officer, director, partner, employee, shareholder, 
     representative or agent of such financial institution, shall, 
     directly or indirectly, disclose that records have been 
     requested or provided in accordance with subparagraph (A), if 
     the Commission finds reason to believe that such disclosure 
     may--
       ``(i) result in the transfer of assets or records outside 
     the territorial limits of the United States;
       ``(ii) result in improper conversion of investor assets;
       ``(iii) impede the ability of the Commission to identify, 
     trace, or freeze funds involved in any securities 
     transaction;
       ``(iv) endanger the life or physical safety of an 
     individual;
       ``(v) result in flight from prosecution;
       ``(vi) result in destruction of or tampering with evidence;
       ``(vii) result in intimidation of potential witnesses; or
       ``(viii) otherwise seriously jeopardize an investigation or 
     unduly delay a trial.'';
       (4) by striking paragraph (10); and
       (5) by redesignating paragraphs (11), (12), and (13) as 
     paragraphs (4), (5), and (6), respectively.
                                  ____

  SA 4270. Mr. McCAIN 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.   . STOCK OPTIONS MUST BE BOOKED AS EXPENSE WHEN 
                   GRANTED.

       Any corporation that grants a stock option to an officer or 
     employee to purchase a publicly traded security in the United 
     States shall record the granting of the option as an expense 
     in that corporation's income statement for the year in which 
     the option is granted.
                                  ____

  SA 4271. Mr. REID (for Mr. Edwards (for himself, Mr. Enzi, and Mr. 
Corzine)) 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

[[Page 12716]]

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 of the instructions add the following:
       ``(c) Rules of Professional Responsibility for Attorneys.--
     Not later than 180 days after the date of enactment of this 
     section, the Commission shall establish rules, in the public 
     interest and for the protection of investors, setting forth 
     minimum standards of professional conduct for attorneys 
     appearing and practicing before the Commission in any way in 
     the representation of public companies, including a rule 
     requiring an attorney to report evidence of a material 
     violation of securities law or breach of fiduciary duty or 
     similar violation by the company or any agent thereof to the 
     chief legal counsel or the chief executive officer of the 
     company (or the equivalent thereof) and, if the counsel or 
     officer does not appropriately respond to the evidence 
     (adopting, as necessary, appropriate remedial measures or 
     sanctions with respect to the violation), requiring the 
     attorney to report the evidence to the audit committee of the 
     board of directors, or to another committee of the board of 
     directors comprised solely of directors not empl9yed directly 
     or indirectly by the company, or to the board of directors.
                                  ____

  SA 4272. Mr. REID (for Mr. Levin (for himself, Mr. Nelson of Florida, 
Mr. Harkin, Mr. Corzine, and Mr. Biden)) proposed an amendment to 
amendment SA 4271 proposed by Mr. Reid (for Mr. Edwards (for himself, 
Mr. Enzi, and Mr. Corzine)) 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:

       In the amendment on page 2 in line 17 strike director. and 
     insert directors.

     SEC. 605. ADMINISTRATIVE PROCEEDINGS REGARDING BANS ON 
                   SERVICE.

       (a) Securities Exchange Act of 1934.--Section 21C of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78u-3) is amended 
     by adding at the end the following new subsection:
       ``(f) Authority of the Commission To Prohibit Persons From 
     Serving as Officers and Directors.--In any cease-and-desist 
     proceeding under subsection (a), the Commission may issue an 
     order to prohibit, conditionally or unconditionally, and 
     permanently or for such period of time as it shall determine, 
     any person who has violated section 10(b), or the rules or 
     regulations thereunder, from acting as an officer or director 
     of any issuer that has a class or securities registered 
     pursuant to section 12, or that is required to file reports 
     pursuant to section 15(d), if the conduct of that person 
     demonstrates unfitness to serve as an officer or director of 
     any such issuer.''.
       (b) Securities Act of 1933.--Section 8A of the Securities 
     Act of 1933 (15 U.S.C. 77h-1) is amended by adding at the end 
     the following new subsection:
       ``(f) Authority of the Commission To Prohibit Persons From 
     Serving as Officer and Directors.--In any cease-and-desist 
     proceeding under subsection (a), the Commission may issue an 
     order to prohibit, conditionally or unconditionally, and 
     permanently or for such period of time as it shall determine, 
     any person who has violated section 17(a)(1) from acting as 
     an officer or director of any issuer that has a class or 
     securities registered pursuant to section 12 of the 
     Securities Exchange Act of 1934, or that is required to file 
     reports pursuant to section 15(d) of that Act, if the conduct 
     of that person demonstrates unfitness to serve as an officer 
     or director of any such issuer.''.

     SEC. 606. AUTHORITY TO ASSESS CIVIL MONEY PENALTIES.

       (a) Securities Act of 1933.--Section 8A of the Securities 
     Act of 1933 (15 U.S.C. 77h-1) is amended by adding at the end 
     a new subsection as follows:
       ``(g) Authority of the Commission To Assess Money 
     Penalty.--
       ``(1) In general.--In any cease-and-desist proceeding under 
     subsection (a), the Commission may impose a civil monetary 
     penalty if it finds, on the record after notice and 
     opportunity for hearing, that a person is violating, has 
     violated, is about to violate, or has been or will be the 
     cause of the violation of, any provision of this title or any 
     rule or regulation thereunder, and that such penalty is in 
     the public interest.
       ``(2) Maximum amount of penalty.--
       ``(A) First tier.--The maximum amount of penalty for each 
     act or omission described in paragraph (1) shall be $100,000 
     for a natural person or $250,000 for any other person.
       ``(B) Second tier.--Notwithstanding subparagraph (A), the 
     maximum amount of penalty for such act or omission described 
     in paragraph (1) shall be $500,000 for a natural person or 
     $1,000,000 for any other person, if the act or omission 
     involved fraud, deceit, manipulation, or deliberate or 
     reckless disregard of a statutory or regulatory requirement.
       ``(C) Third tier.--Notwithstanding subparagraphs (A) and 
     (B), the maximum amount of penalty for each act or omission 
     described in paragraph (1) shall be $1,000,000 for a natural 
     person or $2,000,000 for any other person, if--
       ``(i) the act or omission involved fraud, deceit, 
     manipulation, or deliberate or reckless disregard of a 
     statutory or regulatory requirement; and
       ``(ii) such act or omission directly or indirectly resulted 
     in substantial losses or created a significant risk of 
     substantial losses to other persons or resulted in 
     substantial pecuniary gain to the person who committed the 
     act or omission.''.
       (b) Securities Exchange Act of 1934.--Section 21B(a) of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78u-2(a)) is 
     amended--
       (1) in paragraph (4), by striking ``supervision;'' and all 
     that follows through the end of the subsection and inserting 
     ``supervision.'';
       (2) by redesignating paragraphs (1) through (4) as 
     subparagraphs (A) through (D), respectively, and moving the 
     margins 2 ems to the right;
       (3) by inserting ``that such penalty is in the public 
     interest and'' after ``hearing,'';
       (4) by striking ``In any proceeding'' and inserting the 
     following:
       ``(1) In general.--In any proceeding''; and
       (5) by adding at the end the following:
       ``(2) Other money penalties.--In any proceeding under 
     section 21C against any person, the Commission may impose a 
     civil monetary penalty if it finds, on the record after 
     notice and opportunity for hearing, that such person is 
     violating, has violated, is about to violate, or has been or 
     will be the cause of the violation of, any provision of this 
     title or any rule or regulation thereunder, and that such 
     penalty is in the public interest.''.
       (c) Investment Company Act of 1940.--Section 9(d)(1) of the 
     Investment Company Act of 1940 (15 U.S.C. 80a-9(d)(1)) is 
     amended--
       (1) in subparagraph (C), by striking ``therein;'' and all 
     that follows through the end of the paragraph and inserting 
     ``supervision.'';
       (2) by redesignating subparagraphs (A) through (C) as 
     clauses (i) through (iii), respectively, and moving the 
     margins 2 ems to the right;
       (3) by inserting ``that such penalty is in the public 
     interest and'' after ``hearing,'';
       (4) by striking ``In any proceeding'' and inserting the 
     following:
       ``(A) In general.--In any proceeding''; and
       (5) by adding at the end the following:
       ``(B) Other money penalties.--In any proceeding under 
     subsection (f) against any person, the Commission may impose 
     a civil monetary penalty if it finds, on the record after 
     notice and opportunity for hearing, that such person is 
     violating, has violated, is about to violate, or has been or 
     will be the cause of the violation of, any provision of this 
     title or any rule or regulation thereunder, and that such 
     penalty is in the public interest.''.
       (d) Investment Advisers Act of 1940.--Section 203(i)(1) of 
     the Investment Advisers Act of 1940 (15 U.S.C. 80b-3(i)(1)) 
     is amended--
       (1) in subparagraph (D), by striking ``supervision;'' and 
     all that follows through the end of the paragraph and 
     inserting ``supervision.'';
       (2) by redesignating subparagraphs (A) through (D) as 
     clauses (i) through (iv), respectively, and moving the 
     margins 2 ems to the right;
       (3) by inserting ``that such penalty is in the public 
     interest and'' after ``hearing,'';
       (4) by striking ``In any proceeding'' and inserting the 
     following:
       ``(A) In general.--In any proceeding''; and
       (5) by adding at the end the following:
       ``(B) Other money penalties.--In any proceeding under 
     subsection (k) against any person, the Commission may impose 
     a civil monetary penalty if it finds, on the record after 
     notice and opportunity for hearing, that such person is 
     violating, has violated, is about to violate, or has been or 
     will be the cause of the violation of, any provision of this 
     title or any rule or regulation thereunder, and that such 
     penalty is in the public interest.''.

     SEC. 607. INCREASED MAXIMUM CIVIL MONEY PENALTIES.

       (a) Securities Act of 1933.--Section 20(d)(2) of the 
     Securities Act of 1933 (15 U.S.C. 77t(d)(2)) is amended--
       (1) in subparagraph (A)(i), by--
       (A) striking ``$5,000'' and inserting ``$100,000''; and
       (B) striking ``$50,000'' and inserting ``$250,000'';
       (2) in subparagraph (B)(i), by--
       (A) striking ``$50,000'' and inserting ``$500,000''; and

[[Page 12717]]

       (B) striking ``$250,000'' and inserting ``$1,000,000''; and
       (3) in subparagraph (C)(i), by--
       (A) striking ``$100,000'' and inserting ``$1,000,000''; and
       (B) striking ``$500,000'' and inserting ``$2,000,000''.
       (b) Securities Exchange Act of 1934.--
       (1) Penalties.--Section 32 of the Securities Exchange Act 
     of 1934 (15 U.S.C. 78ff) is amended--
       (A) in subsection (b), by striking ``$100'' and inserting 
     ``$10,000''; and
       (B) in subsection (c)--
       (i) in paragraph (1)(B), by striking ``$10,000'' and 
     inserting ``$500,000''; and
       (ii) in paragraph (2)(B), by striking ``$2,000'' and 
     inserting ``$500,000''.
       (2) Insider trading.--Section 21A(a)(3) of the Securities 
     Exchange Act of 1934 (15 U.S.C. 78u-1(a)(3)) is amended by 
     striking ``$1,000,000'' and inserting ``$2,000,000''.
       (3) Administrative proceedings.--Section 21B(b) of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78u-2(b)) is 
     amended--
       (A) in paragraph (1), by--
       (i) striking ``$5,000'' and inserting ``$100,000''; and
       (ii) striking ``$50,000'' and inserting ``$250,000'';
       (B) in paragraph (2), by--
       (i) striking ``$50,000'' and inserting ``$500,000''; and
       (ii) striking ``$250,000'' and inserting ``$1,000,000''; 
     and
       (C) in paragraph (3), by--
       (i) striking ``$100,000'' and inserting ``$1,000,000''; and
       (ii) striking ``$500,000'' and inserting ``$2,000,000''.
       (4) Civil actions.--Section 21(d)(3)(B) of the Securities 
     Exchange Act of 1934 (15 U.S.C. 78u(d)(3)(B)) is amended--
       (A) in clause (i), by--
       (i) striking ``$5,000'' and inserting ``$100,000''; and
       (ii) striking ``$50,000'' and inserting ``$250,000'';
       (B) in clause (ii), by--
       (i) striking ``$50,000'' and inserting ``$500,000''; and
       (ii) striking ``$250,000'' and inserting ``$1,000,000''; 
     and
       (C) in clause (iii), by--
       (i) striking ``$100,000'' and inserting ``$1,000,000''; and
       (ii) striking ``$500,000'' and inserting ``$12,000,000''.
       (c) Investment Company Act of 1940.--
       (1) Ineligibility.--Section 9(d)(2) of the Investment 
     Company Act of 1940 (15 U.S.C. 80a-9(d)(2)) is amended--
       (A) in subparagraph (A), by--
       (i) striking ``$5,000'' and inserting ``$100,000''; and
       (ii) striking ``$50,000'' and inserting ``$250,000'';
       (B) in subparagraph (B), by--
       (i) striking ``$50,000'' and inserting ``$500,000''; and
       (ii) striking ``$250,000'' and inserting ``$1,000,000''; 
     and
       (C) in subparagraph (C), by--
       (i) striking ``$100,000'' and inserting ``$1,000,000''; and
       (ii) striking ``$500,000'' and inserting ``$2,000,000''.
       (2) Enforcement of investment company act.--Section 
     42(e)(2) of the Investment Company Act of 1940 (15 U.S.C. 
     80a-41(e)(2)) is amended--
       (A) in subparagraph (A), by--
       (i) striking ``$5,000'' and inserting ``$100,000''; and
       (ii) striking ``$50,000'' and inserting ``$250,000'';
       (B) in subparagraph (B), by--
       (i) striking ``$50,000'' and inserting ``$500,000''; and
       (ii) striking ``$250,000'' and inserting ``$1,000,000''; 
     and
       (C) in subparagraph (C), by--
       (i) striking ``$100,000'' and inserting ``$1,000,000''; and
       (ii) striking ``$500,000'' and inserting ``$2,000,000''.
       (d) Investment Advisors Act of 1940.--
       (1) Registration.--Section 203(i)(2) of the Investment 
     Advisors Act of 1940 (15 U.S.C. 80b-3(i)(2)) is amended--
       (A) in subparagraph (A), by--
       (i) striking ``$5,000'' and inserting ``$100,000''; and
       (ii) striking ``$50,000'' and inserting ``$250,000'';
       (B) in subparagraph (B), by--
       (i) striking ``$50,000'' and inserting ``$500,000''; and
       (ii) striking ``$250,000'' and inserting ``$1,000,000''; 
     and
       (C) in subparagraph (C), by--
       (i) striking ``$100,000'' and inserting ``$1,000,000''; and
       (ii) striking ``$500,000'' and inserting ``$2,000,000''.
       (2) Enforcement of investment advisors act.--Section 
     209(e)(2) of the Investment Advisors Act of 1940 (15 U.S.C. 
     80b-9(e)(2)) is amended--
       (A) in subparagraph (A), by--
       (i) striking ``$5,000'' and inserting ``$100,000''; and
       (ii) striking ``$50,000'' and inserting ``$250,000'';
       (B) in subparagraph (B), by--
       (i) striking ``$50,000'' and inserting ``$500,000''; and
       (ii) striking ``$250,000'' and inserting ``$1,000,000''; 
     and
       (C) in subparagraph (C), by--
       (i) striking ``$100,000'' and inserting ``$1,000,000''; and
       (ii) striking ``$500,000'' and inserting ``$12,000,000''.

     SEC. 608. AUTHORITY TO OBTAIN FINANCIAL RECORDS.

       Section 21(h) of the Securities Exchange Act of 1934 (15 
     U.S.C. 78u(h)) is amended--
       (1) by striking paragraphs (2) through (8);
       (2) in paragraph (9), by striking ``(9)(A)'' and all that 
     follows through ``(B) The'' and inserting ``(3) The'';
       (3) by inserting after paragraph (1), the following:
       ``(2) Access to financial records.--
       ``(A) In general.--Notwithstanding section 1105 or 1107 of 
     the Right to Financial Privacy Act of 1978, the Commission 
     may obtain access to and copies of, or the information 
     contained in, financial records of any person held by a 
     financial institution, including the financial records of a 
     customer, without notice to that person, when it acts 
     pursuant to a subpoena authorized by a formal order of 
     investigation of the Commission and issued under the 
     securities laws or pursuant to an administrative or judicial 
     subpoena issued in a proceeding or action to enforce the 
     securities laws.
       ``(B) Nondisclosure of requests.--If the Commission so 
     directs in its subpoena, no financial institution, or 
     officer, director, partner, employee, shareholder, 
     representative or agent of such financial institution, shall, 
     directly or indirectly, disclose that records have been 
     requested or provided in accordance with subparagraph (A), if 
     the Commission finds reason to believe that such disclosure 
     may--
       ``(i) result in the transfer of assets or records outside 
     the territorial limits of the United States;
       ``(ii) result in improper conversion of investor assets;
       ``(iii) impede the ability of the Commission to identify, 
     trace, or freeze funds involved in any securities 
     transaction;
       ``(iv) endanger the life or physical safety of an 
     individual;
       ``(v) result in flight from prosecution;
       ``(vi) result in destruction of or tampering with evidence;
       ``(vii) result in intimidation of potential witnesses; or
       ``(viii) otherwise seriously jeopardize an investigation or 
     unduly delay a trial.'';
       (4) by striking paragraph (10); and
       (5) by redesignating paragraphs (11), (12), and (13) as 
     paragraphs (4), (5), and (6), respectively.

                          ____________________