The Sarbanes-Oxley Act of 2002

Zhenzhou Du (#861000224)
BUS 102
Professor Sean Jasso
TA: Kevin, Section 023, #114
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Table of Contents

Introduction............................................................................................................................................. 3

Background Information – Corporate Frauds................................................................................................. 4

Process of Formation........................................................................................................................................ 6

Implementing SOX................................................................................................................................ 8

Impacts of SOX.................................................................................................................................... 10

The Influence of SOX on Internal Control.................................................................................................. 10

The Effects of SOX on External Auditors................................................................................................... 11

Overall Analysis on SOX.................................................................................................................... 12

The Efficacy of SOX...................................................................................................................................... 12

Recommendation............................................................................................................................................ 15

Appendix................................................................................................................................................ 17

Bibliography......................................................................................................................................... 20
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Introduction

Beginning from October 2001, a series of business ethics scandals was exposed to the

public. These scandals involved many world famous corporations, including Enron, Arthur

Anderson, and WorldCom, which greatly struck investors’ confidence to entire U.S. market. In

order to restore the investors’ confidence, on July 25, 2002, the US Congress passed one of the

biggest acts of regulation involving business ethics, The Sarbanes-Oxley Act of 2002 (SOX).

The Sarbanes-Oxley Act is also known as the Public Company Accounting Reform and Investor

Protection Act. This act was initially introduced in the Congress by U.S. Senator Paul Sarbanes

and U.S. Representative Michael Oxley. The two people made some reforming proposals in the

act in order to strengthen the internal controls of all public companies so that the entire market

can restore the investors’ confidence.

Groups that are required to comply with SOX are all U.S. publicly traded companies,

subsidiaries of foreign companies in the U.S., and private companies that are preparing on IPO

(Initial Public Offering). If those groups failed to comply with the act, they will face up to $1

million in fines or up to 10 years in jails. Moreover, if the company intentionally defrauds the

investors, the related people will face up to $5 million in jail or up to 20 years in jails. This paper

will take a deep look at the Sarbanes-Oxley Act of 2002, including the rationale and the history

of the act, how the act is implemented, how the act is influencing the current business market,

and how the act can be further improved. The goal of this paper is to let people have a better

understanding about the Sarbanes-Oxley act and realize the act is a very important code for every

public company to follow.

Rationale for the Sarbanes-Oxley Act of 2002

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Background Information – Corporate Frauds

The creation of the Sarbanes Oxley was closely related to a series of major corporate

accounting scandals happened between 2001 and 2002. Of all the corporate scandals, Enron and

WorldCom accounting frauds were the most striking ones.

Before 2001, the Enron Corporation was enveloped in the atmosphere of praises. As the

world’s largest energy trading corporation, Enron’s total income in the year 2000 was $101

billion and it was the seventh largest company on the Fortune 500 evaluated by Fortune

Magazine. Also, the company controlled over 20 percent of electricity and natural gas market

share. Almost all stock rating agencies recommended Enron stock because they thought it was

definitely a blue chip stock.

However, on October 16, 2001, Enron’s third quarter financial report attracted the

public’s attention. People found that in the third quarter, Enron suffered a total loss of over six

hundred million dollars. Before this report was announced, the company’s net revenue

experienced constant growth for 21 consecutive months. The investors, the government, and the

media was shocked about this huge number change. The U.S. Securities and Exchange

Commission quickly investigate the entire Enron Corporation and found that in 1997-2000,

Enron committed accounting fraud for four consecutive years. “It is suspected that Enron

structured many deals to inflate misleadingly reported profits, e.g. by booking most of the future

profits – often just estimates at best – on long-term deals at the beginning of the deal, rather than

reporting them as received over the lifetime of the deal” (“Cooking the Books”, 2002). Through

these unethical actions, Enron inflated its profits for more than $600 million in its financial

statements. On November 8, 2001, under the huge pressure from the government regulators and

the media, Enron acknowledged to the SEC that the company committed accounting frauds
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during the previous years. On December 2, Enron filed for bankruptcy and its $63.4 billion assets

made itself the largest corporate bankruptcy in U.S. history at that time. On January 15, 2002, the

New York Stock Exchange officially announced that Enron’s stock was removed from the Dow

Jones Industrial Average Index. At this point, the Enron dynasty was completely collapsed.

After the Enron scandal was exposed, another guess people had was that there must some

hidden cooperation between Enron and its external auditor, Arthur Andersen. In fact, Andersen

was the institution that directly helped Enron committed frauds. This world famous accounting

firm helped Enron inflate profits, conceal huge debts, and mislead investors. From 1908s to

1990s, Arthur Andersen was not only responsible for Enron’s auditing service, but also involved

into Enron’s accounting consulting services. Thus, in other words, Andersen helped Enron cook

the book. In 2000, Arthur Andersen obtained $52 million income from Enron Corporation,

including $27 million consulting service. There was a long-standing hidden relationship between

Enron and Arthur Andersen. On October 16, 2002, the federal court sentenced Arthur Andersen

finned $500,000 and banned it conducting business for five years. Andersen was the first

accounting firm that was sentenced to “guilty”. After that, this world famous accounting firm

quit from the auditing industry.

The year 2002 has to be recorded in the U.S. business history. On June 25, 2002, the

second largest U.S. long-distance telephone company, WorldCom, admitted that from 2001 until

the first quarter of 2002, they inflated $3.8 billion revenue and $1.6 billion profits. These inflated

numbers helped WorldCom’s net losses become net revenue. After this scandal was exposed, the

stock price dropped greatly. Moreover, this fraud deeply stuck the investors’ confidence one

more time, and the unstable situation was spread not only to the U.S. market, but also to the

entire European and Asian stock markets. Those investors thought that there might be more
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corporate frauds waiting ahead if the current negative trend didn’t stop. Thus, they began to be

extremely cautious about investing stocks. On July 21, 2002, the WorldCom filed for

bankruptcy. This company replaced Enron being as the largest bankruptcy corporate.

This series of corporate scandals reflect a big market failure that completely struck

investors’ confidence toward the U.S. stock market and entirely destroyed the reputation of U.S.

market. Due to the information asymmetry, Enron and WorldCom’s reported profits were far

fewer than their actual profits. The government realized that there was a huge flaw existing in the

corporate internal control system and the entire regulation system. The deceptions gave the

public a reality check and the combination of these events created an opportunity to enact a

change. Therefore, in order to restore investors’ confidence, the U.S. Congress and the

government quickly passed the Sarbanes-Oxley Act. The former U.S. president called the

legislation “the most far-reaching reforms of American business practices since the time of

Franklin Delano Roosevelt” (Bumiller, 2002).

Process of Formation

The Sarbanes-Oxley Act was first submitted to the Committee on Financial Services on

February 14, 2002. Until the former President George W. Bush signed the final version on July

25, the act was revised for six times in total. On February 14, 2002, when the first draft was

turned in to the Committee Financial Services, there were 13 section shown on the act, mainly

focused on the regulation of the CPA profession, such as: establishing a regulatory institution to

oversee the running of Certified Public Accountants; providing some operational principles to

this regulatory institution; prohibiting company officers and directors to exert undue influence on

the audit practices; accelerating the pace of financial disclosure. Comparing with the final
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version of the SOX, the first version was more moderate. It didn’t include the punishment to

those companies failed to comply with the act. Also, the regulation of the accounting profession

was relatively soft. Of course, at that time, people didn’t have a great desire to introduce the act

because the Enron scandal just happened for two months and the WorldCom corporate fraud was

still not exposed. Thus, the public’s attitude toward company management and the stock market

still had not changed completely.

The second draft of the SOX was based on the hearing held by the U.S. House of

Representatives. During the hearing, the Committee on Financial Services discussed the impact

of the collapse of Enron on investors and the entire capital market. According to this discussion,

the second version of SOX was made. The major changes are: having a more detailed regulation

about the staff composition, source of funding, independence, and the regulation of the

regulatory institution. After this draft was made, the Committee kept making revisions during the

next following months. However, the real turning point of the introduction of SOX was

happened in June.

On June 25, 2002, the second largest U.S. long-distance telephone company, WorldCom,

admitted that they inflated $3.8 billion revenue since 2001. If we say Enron scandal shocked the

American society, WorldCom’s corporate fraud made the American citizens feel furious. On

June 26, President Bush promised to the society the personnel who deceived investors must be

put into the jail. Also, the president made a speech at Wall Street and announced the

establishment of the corporate Fraud Task Force to target major accounting fraud and other

unethical behavior in corporate finance. Also, Bush asked the Congress to submit the final

revision of the Sarbanes-Oxley Act by the end of July. Thus, in order to restore the investors’

confidence as soon as possible, the revision of the SOX had to be accelerated. On July 15, the
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Committee submitted another revision proposal. The content was also changed greatly. There

were 10 sections on this draft. The major changes were: the discussion on the investment banks

was deleted; negative impact of unethical auditing and unethical stock income test were included

into corporate responsibility section; the official name of the regulatory institution was

determined as Public Company Accounting Oversight Board (PCAOB). This revision draft made

the foundation of the final version of the Sarbanes Oxley Act.

On the next following days, the act was still being revised for couple times. Finally, on

July 25, the House of Representatives accept the final revision of the SOX and submitted it to

President Bush. On July 30, President Bush officially signed the Sarbanes-Oxley act into the

federal law.

Implementing SOX

The final revision of the Sarbanes-Oxley Act has 11 major titles. Title 1-6 involves the

regulation of the accounting profession and corporate behaviors, including: the establishment of

Public Company Accounting Oversight Board (PCAOB); the regulation upon the audit of public

traded companies; how senior executive should act their roles in accounting; enhancing financial

disclosures; analyst conflicts of interest; enhancing the power of SEC. Title 7 talks about the

studies and reports that the Comptroller General and the SEC should perform. Title 8-11

involves white-collar crimes and criminal responsibilities of company executives. In this three

titles, the punishments of some certain misbehavior such as failing to comply with the act are

mentioned.

During 2001-2002, a series of corporate scandals was exposed to the public. For these

scandals, the company management should definitely take great responsibilities. Thus, one of the
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major focuses of the Sarbanes-Oxley Act was to clearly define the responsibilities of company

executives. Also, the lesson of the scandals of Enron and WorldCom was a major basis of the

act. The SOX involves: establishing an independent regulatory institution to oversee the audit

service (Sec. 101); rotating the audit firms periodically (Sec. 203); company management has to

do internal control assessment in time (Sec. 404). Overall, a lot of parts shown on the SOX

involve making changes to the current accounting profession. Thus, in many people’s views, the

SOX is more like a reforming act instead a real federal law, and that why this is also named as

Public Company Accounting Reform and Investor Protection Act.

Of all the aspects exhibited on the SOX, Section 404 is the most controversial part. This

section requires both the company management and the auditor to provide an assessment report

upon the companies’ internal control system on the financial reports. The management is

responsible for building and maintaining a stable internal control system. Moreover, the auditors

are required to make comments to the companies’ assessment process. All these strict actions

enable people to be aware of the company’s potential unethical behavior more easily and ensure

the reliability and the authenticity of the financial report. According to Section 404, every public

company is required to have a detailed description about every single job duty within the

company and have an internal control regulation about every single accounting and sales record,

such as the contract, payment and delivery time, the name of the in charge people, etc. Also, the

company needs to evaluate the potential flaws that may be existed in the internal control system

and the possible remedies. “A company’s implementation of Sarbanes-Oxley section 404 should

have a dual focus: compliance and internal controls enhancement. The company will need

defined objectives, clear requirements, proper resources, and an achievable schedule” (Quall,

2004). Thus, to comply with Section 404, companies should follow the following steps: 1.
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Building frameworks for the internal control systems, 2. Finding possible remedy methods, 3.

Testing the internal control system, 4. Submitting a written report that sums up the previous three

steps.

Impacts of SOX

The Influence of SOX on Internal Control

In order to let the company run ethically, the Board of Directors need to perform the jobs

well. The effect of SOC on the Board of Director mainly reflects on the board’s self-serving

behavior. Through the monitoring regulations upon the executives, the shareholders’ profits will

be under protection. In the past, in order to increase their own income, some executives

controlled the process of signing the contract or manipulated some important provisions in the

contract by using their strong power. If the Board can be monitored properly, the misbehavior of

the management can be avoided. After SOX was enacted, those corporations that have bad Board

monitoring structures need to alter their internal control systems based on the requirement of the

act, including improving the independence of the Board. In their online journal, Buccino and

Shannon suggested that, “to ensure that they make informed decisions, directors must require

from management complete and full analysis on action to be taken and, if necessary,

independently hire outside counsel or consultants to review matters on their behalf” (Buccino &

Shannon, 2003). In order to improve the independence of the board, the company needs to

increase the proportion of independent directors. Then, the effects of the monitoring regulation

will also be enhanced. Finally, the compensation the Board can be connected to the company’s

achievement more closely. Besides, SOX pays attention to the aspect of monitoring CFO. Under

the act, the penalties to those CFOs who behaved unethically are severe. On common CFO
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improper behavior is restating the company’s earning in order to help the company increase the

stock value. SOX effectively prevent such misbehavior by raising the penalties.

From the act, people can see that Section 404 is particularly targeted on the internal

control within the company. The act requires the management to assess and report the

effectiveness of the company’s internal control system. Also, the external auditor needs to make

auditing comments upon the internal control effectiveness report and look for if there are big

flaws on it. The company executives “are responsible for establishing and maintaining internal

controls; have designed the internal controls to enable them to obtain all material financial

information; have evaluated the effectiveness of the internal controls” (Bloch, 2003). The major

purpose of these actions is to let the company, investors, and the public pay more attention to the

company’s internal control and be aware of the importance of the internal control. When a

company really has significant internal control flaws, the opportunity that the company controls

the profits will increase, and then possibility that investors suffer loss will be raised accordingly

as well. Therefore, if the investors have consciousness towards the company’s internal control

and risk control, those companies that have weak internal control systems wouldn’t survive in

the business market because everyone knows the company is unstable.

The Effects of SOX on External Auditors

From above, we can see that the legislation of SOX is impacting the company’s internal

control greatly; however, at the same time SOX is influencing the company’s external auditor as

well. In the case of Enron Scandal, one of the major reasons why Enron’s unethical behavior was

not exposed immediately is that its external auditor, Arthur Anderson, not only was responsible

for Enron’s auditing service, but also acted consulting services for Enron. On one hand,
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Anderson helped Enron make financial reports which deceived the public; on the other hand,

Anderson directly audited those deceiving reports. This is why Enron could lie to the business

market for over four years. When the auditor provide audit and non-audit services for the same

client at the same time, the company’s dependence with the auditor will increase greatly, and this

dependence will damage the independence of the auditor.

“Since the accounting failures of Enron and WorldCom, regulators have worked

continuously to improve the financial reporting process, generally by focusing on auditor and

audit committee independence—including the issue of auditor tenure” (Iannelli, 2012). Under

SOX, the external auditor cannot do auditing services and consulting services for the same

company. Moreover, the company’s external auditor needs to rotate frequently, which means the

auditor cannot serve the same company for more than five years, and this keeps the

independence of auditors as much as possible.

Overall Analysis on SOX

The Efficacy of SOX

According to an online journal, “A PricewaterhouseCoopers Management Barometer

survey of 136 CFOs and managing directors in June 2003 found 91% had made changes in

controls and compliance practices as a result of the law, compared with 85% of the same group

surveyed in October 2002” (Hoffman, 2003). I also perceive that the Sarbanes-Oxley Act is very

effective and really achieves the goal, which is to restore the investor confidence after a series of

accounting scandal happened at the beginning of the twenty-first century and increase the

monitoring power upon the accounting profession.

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The beginning of the 21st century was a dark era to the entire U.S. accounting profession

due to a series of accounting scandals; even some of the world famous corporations such as

Enron and WorldCom were involved. Everyone was worried about the business future because if

the government didn’t do anything to stop the trend, there might be other big corporation

involved in the scandals in the future. Fortunately, the Sarbanes-Oxley Act was legislated just in

time. SOX had various high requirements toward both the company and the auditor. If the

company or the auditor fails to comply with the act, it will face severe punishments. After the act

was passed, the corporation accounting fraud almost disappeared completely. There was not any

significant corporation fraud happened again any more. Thus, with the help of the legislation of

SOX, the entire U.S. business market successfully gets over from the dark era.

After the series of accounting scandals taken placed in 2001 and 2002, the investor

confidence toward the stock market was struck entirely. People began to stay away from the

stock market. During the year 2002, the US capital market suffered a total loss of $7 trillion,

which was definitely a huge disaster in US business history. After the Sarbanes-Oxley Act was

enacted, investors began to trust the stock market again and the confidences were restored

gradually because there is a law restricting their investing companies. According to his journal

published in 2003, Fass suggested that, “Sarbanes-Oxley has already had some positive effects.

Two years ago, only about 1% of analyst reports would recommend investors sell. Today, that

number is up to 20%. The percentage of shareholders winning proxy fights has also increased”

(Fass, 2003). Also, in the year 2004, the Dow Jones index experienced a growth of 25.3% and

the NASDAQ index experienced a growth of nearly 50%. Thus, we can see that the legislation of

SOX really let those hopeless investors re-entered the stock market.
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In addition, the legislation of SOX increases the quality of the company’s self-regulation.

Before SOX was enacted, companies didn’t pay too much attention on the internal control

system and there were not any regulations directing companies how they should monitor

themselves in order to keep the entire company acting ethically. Thus, at that time, companies’

self-regulation was chaotic and that’s one of the major reasons why accounting scandals could

happen. However, after SOX was signed into the law in 2002, there really is a standard telling

companies how should they improve the internal control system and enhance their self-regulation

at the same time. “Studies show that better internal controls result in better financial reporting

and more investor confidence in financial reports” (Harris, 2012). Thus, SOX directly helps

companies have a complete regulatory system and improve themselves internally.

Even though SOX is an effective act and it achieves the goal, the act still has some minor

drawbacks. One of the biggest drawbacks that people commonly talk about is the expense.

Section 404 has a high requirement to companies internal control systems, but implementing

Section 404 is not easy at all. Some companies need to destroy their old internal control system

and build a entirely new system to satisfy the act requirements. This behavior will need the

companies to spend a large amount of money and some medium-sized or small-sized companies

may not afford the costs. As a result, after SOX was enacted many small corporations decided to

quit from the stock market. Also, some companies that were already preparing for IPOs in the

U.S. market decided to enter other markets such as Europe and Hong Kong. “In 2003 the SEC

estimated that the average company could do much of its internal controls work for $91,000 per

year. In 2007, the commission acknowledged costs had gotten out of hand, particularly for

smaller companies, and told the PCAOB to make the internal controls audits more cost-
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effective” (Freeman, 2009). Therefore, in some sense, SOX hinders the development of the U.S.

market competitiveness due to the high costs on the internal control.

Recommendation

Based on the current condition of SOX and the entire U.S. stock market, there are two

recommendations I would like to make in order to improve the overall effectiveness of the act.

First, again, high expense on the internal control system is an inevitable topic we have to

mention. At the same time of making public companies improve the internal control systems, the

U.S. government should also find a way to help companies solve the high expense problem. If

the government can do something to solve this problem, those companies that decided to quit

from the market or went to other countries’ markets will have a great possibility to return back to

the U.S because the U.S. market is still broadly perceived as one of the most promising business

market in the world. Then, the competiveness of the entire U.S. business market will be

enhanced significantly.

Also, even though there is no denying that the legislation of SOX increases the quality of

information disclosure because the act has really high requirements on the internal and external

control and these high requirements significantly decrease the possibility of information

asymmetry, there is still a possibility that the effects of SOX on information disclosure may not

be as good as we imagine. A company’s information disclosure includes two aspects, public

information and private information. In order to improve the overall quality of the stock market

information, companies should not only increase the quality of the public information, but also

enhance the effectiveness of the private information. Unfortunately, SOX put the major focus on

the disclosure of the mandatory public information. Thus, even though it seems that the quality
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of the information disclosure increases under the SOX, it doesn’t necessarily mean the aggregate

quality and quantity of the company’s usable information increase because the private

information is not guaranteed to be reliable. Thus, the government should also have some

requirements on the disclosure of the private information. Only if both the quantity and quality of

private and public information are improved together, the information that goes to the investors

can be effective and reliable. Therefore, improving the disclosure of companies’ private

information is an important aspect that the SOX should improve.

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Appendix

One Hundred Seventh Congress of the United States of America

AT THE SECOND SESSION

Begun and held at the City of Washington on Wednesday,

the twenty-third day of January, two thousand and two

An Act
To protect investors by improving the accuracy and reliability of corporate disclosures made
pursuant to the securities laws, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America
in Congress assembled,

(a) SHORT TITLE.—This Act may be cited as the ‘‘Sarbanes-Oxley Act of 2002’’.

(b) TABLE OF CONTENTS.—The table of contents for this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I—PUBLIC COMPANY ACCOUNTING OVERSIGHT BOARD

Sec. 101. Establishment; administrative provisions.

Sec. 102. Registration with the Board.
Sec. 103. Auditing, quality control, and independence standards and rules.
Sec. 104. Inspections of registered public accounting firms.
Sec. 105. Investigations and disciplinary proceedings.
Sec. 106. Foreign public accounting firms.
Sec. 107. Commission oversight of the Board.
Sec. 108. Accounting standards.
Sec. 109. Funding.

TITLE II—AUDITOR INDEPENDENCE

Sec. 201. Services outside the scope of practice of auditors.

Sec. 202. Preapproval requirements.
Sec. 203. Audit partner rotation.
Sec. 204. Auditor reports to audit committees.
Sec. 205. Conforming amendments.
Sec. 206. Conflicts of interest.
Sec. 207. Study of mandatory rotation of registered public accounting firms.
Sec. 208. Commission authority.
Sec. 209. Considerations by appropriate State regulatory authorities.
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TITLE III—CORPORATE RESPONSIBILITY

Sec. 301. Public company audit committees.

Sec. 302. Corporate responsibility for financial reports.
Sec. 303. Improper influence on conduct of audits.
Sec. 304. Forfeiture of certain bonuses and profits.
Sec. 305. Officer and director bars and penalties.
Sec. 306. Insider trades during pension fund blackout periods.
Sec. 307. Rules of professional responsibility for attorneys.
Sec. 308. Fair funds for investors.

TITLE IV—ENHANCED FINANCIAL DISCLOSURES

Sec. 401. Disclosures in periodic reports.
Sec. 402. Enhanced conflict of interest provisions.
Sec. 403. Disclosures of transactions involving management and principal stockholders.
Sec. 404. Management assessment of internal controls.
Sec. 405. Exemption.
Sec. 406. Code of ethics for senior financial officers.
Sec. 407. Disclosure of audit committee financial expert.
Sec. 408. Enhanced review of periodic disclosures by issuers.
Sec. 409. Real time issuer disclosures.

TITLE V—ANALYST CONFLICTS OF INTEREST

Sec. 501. Treatment of securities analysts by registered securities associations and national
securities exchanges.

TITLE VI—COMMISSION RESOURCES AND AUTHORITY

Sec. 601. Authorization of appropriations.

Sec. 602. Appearance and practice before the Commission.
Sec. 603. Federal court authority to impose penny stock bars.
Sec. 604. Qualifications of associated persons of brokers and dealers.

TITLE VII—STUDIES AND REPORTS

Sec. 701. GAO study and report regarding consolidation of public accounting firms.
Sec. 702. Commission study and report regarding credit rating agencies.
Sec. 703. Study and report on violators and violations
Sec. 704. Study of enforcement actions.
Sec. 705. Study of investment banks.

TITLE VIII—CORPORATE AND CRIMINAL FRAUD ACCOUNTABILITY

Sec. 801. Short title.
Sec. 802. Criminal penalties for altering documents.
Sec. 803. Debts nondischargeable if incurred in violation of securities fraud laws.
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Sec. 804. Statute of limitations for securities fraud.

Sec. 805. Review of Federal Sentencing Guidelines for obstruction of justice and extensive
criminal fraud.
Sec. 806. Protection for employees of publicly traded companies who provide evidence of fraud.
Sec. 807. Criminal penalties for defrauding shareholders of publicly traded companies.

TITLE IX—WHITE-COLLAR CRIME PENALTY ENHANCEMENTS

Sec. 901. Short title.

Sec. 902. Attempts and conspiracies to commit criminal fraud offenses.
Sec. 903. Criminal penalties for mail and wire fraud.
Sec. 904. Criminal penalties for violations of the Employee Retirement Income Security Act of
1974.
Sec. 905. Amendment to sentencing guidelines relating to certain white-collar offenses.
Sec. 906. Corporate responsibility for financial reports.

TITLE X—CORPORATE TAX RETURNS

Sec. 1001. Sense of the Senate regarding the signing of corporate tax returns by chief executive
officers.

TITLE XI—CORPORATE FRAUD AND ACCOUNTABILITY

Sec. 1101. Short title.

Sec. 1102. Tampering with a record or otherwise impeding an official proceeding.
Sec. 1103. Temporary freeze authority for the Securities and Exchange Commission.
Sec. 1104. Amendment to the Federal Sentencing Guidelines.
Sec. 1105. Authority of the Commission to prohibit persons from serving as officers or directors.
Sec. 1106. Increased criminal penalties under Securities Exchange Act of 1934.
Sec. 1107. Retaliation against informants.
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