Accounting and corporate scandals hit the United States in the late 1990s and early 2000s. This includes scandals such as those which affected WorldCom, Enron, Adelphia, and Tyco International.

How does the Sarbanes-Oxley Act impact businesses and employees?

Under Sarbanes-Oxley, public companies must adopt a business ethics code and create an internal procedure by which employee reports about fraud or ethical violations can be taken, reviewed, and solicited.

Who does Sarbanes-Oxley protect?

In 2002, Congress passed the historic Sarbanes-Oxley Act, which protects employees of publicly traded companies who report violations of Securities and Exchange Commission regulations or any provision of federal law relating to fraud against the shareholders.

How does the Sarbanes Oxley Act affect companies?

Due to the additional cash and time costs of complying with the Sarbanes-Oxley Act, many companies tend to put off going public until much later. This leads to a rise in debt financing and venture capital investments for smaller companies who cannot afford to comply with the act.

Where to file a claim under the Sarbanes Oxley Act?

A claim under the anti-retaliation provision of the Sarbanes–Oxley Act must be filed initially at the Occupational Safety and Health Administration at the U.S. Department of Labor. OSHA will perform an investigation and if they conclude that the employer violated SOX, OSHA can order preliminary reinstatement.

What does Title III of the Sarbanes Oxley Act mean?

Title III consists of eight sections and mandates that senior executives take individual responsibility for the accuracy and completeness of corporate financial reports.

What was the maximum sentence under the Sarbanes Oxley Act?

The maximum sentence term for securities fraud was increased to 25 years, while the maximum prison time for the obstruction of justice was increased to 20 years. The act increased the maximum penalties for mail and wire fraud from five years of prison time to 20.