Past Prosecutions of the Sarbanes Oxley Act

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The Law as applied to sarbanes oxley was recently in the spotlight and prosecution of the Richard Scrushy trial in Birmingham, Alabama. He was found not guilty in the S.7 Billion accounting fraud.

He was the CEO of HealthSouth, a large healthcare firm headquartered in Birmingham. The charges were as follows,

	Company's financial records weredoctoredfor many years in order to fool Wall Street
	Stock price remained higher than it would have been had the truth been known about the firms finances
	Accounting fraud went on for several years
	Overpricedstock
	Scrushy held large amounts of HealthSouth stock
	Scrushy admits that accounting fraud took place
	One set of charges against him comes from the 2002 Oxley Sarbanes Act

Scrushy was the first chief executive charged with violating the 2002 Sarbanes-Oxley Act, a corporate reform measure enacted after a wave of corporate scandals that followed the collapse of Enron. Five former chief financial officers testified against him.

After the collapse of Enron Corp, WorldCom Inc. and others, regulators and lawmakers raised financial reporting and corporate governance standards for publicly traded companies to increase accountability and transparency. In the latest and final phase of the reforms, known as Section 404, Internal Controls of Act 404 Oxley sarbanes .

SEC recently gave private companies an extra year to comply with Section 404.

CEOs and CFOs Must Still Execute and File Internal Control Certifications.

Many provisions of the Act apply as soon as a company files a registration statement under the Securities Act of 1933, even if the registration statement is subsequently withdrawn. Advance planning for companies contemplating such a filing is critical.

The Act requires that public companies disclose whether they have adopted codes of corporate ethics and if not, why not.

While the Sarbanes Oxley Act principally applies to publicly traded companies, it's contents provide useful guidelines for good corporate practices that are equally applicable to many private companies.

Private companies, especially those falling into the categories listed earlier in this article, consider undertaking a Sarbanes Oxley audit to consider which of the Act's provision might be appropriate for their consideration. The whistleblower process part 301 oxley sarbanes