President Bush and Congress laid out plans this week for reforming and punishing wayward corporations who seek to defraud investors. By executive order, the president created a new Corporate Fraud Task Force, headed by the Deputy Attorney General, which will target major accounting fraud and other criminal activity in corporate finance. He also called on Congress to authorize greater funds for the Securities and Exchange Commission so that they can root out more wrongdoings, and suggested extending sentences for corporate criminals to 10 from five years.
Meanwhile, outspoken Arizona Republican Sen. John McCain called for the ouster of SEC Chairman Harvey Pitt, who recently served as attorney for Big Five firms and the American Institute of CPAs. And the Senate voted in favor of an amendment to the Public Company Accounting Reform and Investor Protection Act that would crack down even harder on corporate shenanigans.
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