Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204, 116 Stat. 745 (July 30, 2002)
An Act To protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws, and for other purposes
One Hundred Seventh Congress, Session II · Approved July 30, 2002
This is an unofficial transcription, prepared by Robert J. Pfister for ease of reading and copying. The authoritative text is the United States Statutes at Large.
United States Statutes at Large (PDF excerpt, 5 pages) (opens in a new tab) Unofficial transcription (PDF excerpt, 5 pages) (opens in a new tab)
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(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. |
| Sec. 2. | Definitions. |
| Sec. 3. | Commission rules and enforcement. |
| 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. |
| 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. |
[116 Stat. 746–800 omitted (55 pages)]
(b) Clerical Amendment.—The table of sections at the beginning of chapter 73 of title 18, United States Code, is amended by adding at the end the following new items:
| “1519. | Destruction, alteration, or falsification of records in Federal investigations and bankruptcy. |
| “1520. | Destruction of corporate audit records.”. |
SEC. 803. DEBTS NONDISCHARGEABLE IF INCURRED IN VIOLATION OF SECURITIES FRAUD LAWS.
Section 523(a) of title 11, United States Code, is amended—
(1) in paragraph (17), by striking “or” after the semicolon;
(2) in paragraph (18), by striking the period at the end and inserting “; or”; and
(3) by adding at the end, the following:
“(19) that—
“(A) is for—
“(i) the violation of any of the Federal securities laws (as that term is defined in section 3(a)(47) of the Securities Exchange Act of 1934), any of the State securities laws, or any regulation or order issued under such Federal or State securities laws; or
“(ii) common law fraud, deceit, or manipulation in connection with the purchase or sale of any security; and
“(B) results from—
“(i) any judgment, order, consent order, or decree entered in any Federal or State judicial or administrative proceeding;
“(ii) any settlement agreement entered into by the debtor; or
“(iii) any court or administrative order for any damages, fine, penalty, citation, restitutionary payment, disgorgement payment, attorney fee, cost, or other payment owed by the debtor.”.
SEC. 804. STATUTE OF LIMITATIONS FOR SECURITIES FRAUD.
(a) In General.—Section 1658 of title 28, United States Code, is amended—
(1) by inserting “(a)” before “Except”; and
(2) by adding at the end the following:
“(b) Notwithstanding subsection (a), a private right of action that involves a claim of fraud, deceit, manipulation, or contrivance in contravention of a regulatory requirement concerning the securities laws, as defined in section 3(a)(47) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(47)), may be brought not later than the earlier of—
“(1) 2 years after the discovery of the facts constituting the violation; or
“(2) 5 years after such violation.”.
(b) Effective Date.—The limitations period provided by section 1658(b) of title 28, United States Code, as added by this section, shall apply to all proceedings addressed by this section that are commenced on or after the date of enactment of this Act.
(c) No Creation of Actions.—Nothing in this section shall create a new, private right of action.
[116 Stat. 802–809 omitted (8 pages)]
“(f) Authority of the Commission to Prohibit Persons From Serving as Officers or 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) or the rules or regulations thereunder, from acting as an officer or director of any issuer that has a class of 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. 1106. INCREASED CRIMINAL PENALTIES UNDER SECURITIES EXCHANGE ACT OF 1934.
Section 32(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78ff(a)) is amended—
(1) by striking “$1,000,000, or imprisoned not more than 10 years” and inserting “$5,000,000, or imprisoned not more than 20 years”; and
(2) by striking “$2,500,000” and inserting “$25,000,000”.
SEC. 1107. RETALIATION AGAINST INFORMANTS.
(a) In General.—Section 1513 of title 18, United States Code, is amended by adding at the end the following:
“(e) Whoever knowingly, with the intent to retaliate, takes any action harmful to any person, including interference with the lawful employment or livelihood of any person, for providing to a law enforcement officer any truthful information relating to the commission or possible commission of any Federal offense, shall be fined under this title or imprisoned not more than 10 years, or both.”.
Approved July 30, 2002.