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Posts from June 2005.

The era of the more business friendly Securities and Exchange Commission (“SEC”) of former Chairman Harvey Pitt has come to an end in the wake of Sarbanes-Oxley and the Enron-WorldCom corporate implosions. In fact, the total fines levied by the SEC have skyrocketed from $44 million in 2001 to more than $1 billion in both 2003 and 2004. During the same period, the number of enforcement actions initiated because of alleged abuses in the areas of financial reporting and accounting have increased by more than 70 percent. See Tim Reason, The Limits of Mercy, CFO, April 2005, at 61, 62.This increase in the number and severity of enforcement actions being brought by the SEC appears to be a policy shift for the agency in general. Companies and individuals that fail to respond to this shift in corporate oversight and accountability may join the growing ranks of those facing SEC enforcement penalties through its enforcement process.

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The era of the more business friendly Securities and Exchange Commission (“SEC”) of former Chairman Harvey Pitt has come to an end in the wake of Sarbanes-Oxley and the Enron-WorldCom corporate implosions. In fact, the total fines levied by the SEC have skyrocketed from $44 million in 2001 to more than $1 billion in both 2003 and 2004. During the same period, the number of enforcement actions initiated because of alleged abuses in the areas of financial reporting and accounting have increased by more than 70 percent. See Tim Reason, The Limits of Mercy, CFO, April 2005, at 61, 62.This increase in the number and severity of enforcement actions being brought by the SEC appears to be a policy shift for the agency in general. Companies and individuals that fail to respond to this shift in corporate oversight and accountability may join the growing ranks of those facing SEC enforcement penalties through its enforcement process.

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