President Bush signed the Sarbanes-Oxley Act (the “Act”) into law on July 30, 2002. Titles VIII, IX and XI of the Act create new federal fraud offenses, modify fraud statutes already on the books and enhance various fraud related penalties. Although much attention has focused on new civil requirements imposed upon publicly traded companies and their officers under the Act, the criminal provisions must not be ignored by the prudent corporate actor. This article will discuss the new criminal fraud related provisions of the Act and offer some preliminary assessments of the direction that enforcement of the Act is likely to take. It should be borne in mind that all essential elements of a criminal statute must be proved beyond a reasonable doubt.

Title VIII, Section 802 of the Act creates a new criminal offense, 18 U.S.C. §1519, entitled “Destruction, alteration, or falsification of records in Federal investigations and bankruptcy.” §1519 provides that:

Whoever knowingly alters, destroys, mutilates, conceals, covers up, falsifies, or makes a false entry in any record, document, or tangible object with the intent to impede, obstruct, or influence the investigation or proper administration of any matter within the jurisdiction of any department or agency of the United States or any case filed under title 11, or in relation to or contemplation of any such matter or case, shall be fined under this title, imprisoned not more than 20 years, or both.

This statute significantly enhances the federal government’s ability to prosecute obstruction of justice offenses involving alteration or destruction of documents and tangible objects. The key phrasing in the new offense is “intent to impede, obstruct, or influence the . . . proper administration of any matter.” This expansive wording does not even necessitate a pending or contemplated investigation for an offense to occur. For example, the mere intent or attempt to influence (through destruction or alteration of documents) the “proper administration” of any matter within a department or agency’s jurisdiction, or the intent or attempt to influence any matter “in contemplation of” such “proper administration,” can result in criminal liability. This language is potentially broad enough to cover the destruction of a company’s documents years before a civil investigation occurs as long as that company’s activities are “administered” in some fashion by a particular department or agency of the federal government. It is not even clear from the language of the statute that the government has to prove an accused’s knowledge that the “investigation” or “administration” being influenced was within a particular, or any, department or agency’s jurisdiction. Indeed, if courts interpret the statute in harmony with the Supreme Court’s construction of 18 U.S.C. §1001, and with the legislative history contained in the Senate Judiciary Committee Report, no such finding of specific intent will be necessary. It is also noteworthy that §1519 does not require a willful or corrupt state of mind. Thus the government will not need to establish that a defendant intended to violate a known legal duty. In sum, §1519 is a significant addition to the federal government’s powers to prosecute obstruction of justice through the alteration of records.

Title XI, Section1102 of the Act, entitled “TAMPERING WITH A RECORD OR OTHERWISE IMPEDING AN OFFICIAL PROCEEDING,” provides that:
“(c) Whoever corruptly—
(1)
alters, destroys, mutilates, or conceals a record, document, or other object, or attempts to do so, with the intent to impair the object’s integrity or availability for use in an official proceeding; or
(2)
otherwise obstructs, influences, or impedes any official proceeding, or attempts to do so, shall be fined under this title or imprisoned not more than 20 years, or both.”
This offense has been inserted into 18 U.S.C. §1512 as new subsection (c). It enhances the existing statute by effectively eliminating the requirement that one who obstructs or impedes an “official proceeding” or alters documents must “corruptly persuade” another to do so. (In other words, prior to passage of the Act, one who obstructed justice on his own without influencing or intimidating another could not be prosecuted under 18 U.S.C. §1512.) 18 U.S.C. §1512 had long provided that an official proceeding need not be pending or about to be instituted at the time of the alleged offense. 18
U.S.C. §1515 defines, for purposes of §1512, an “official proceeding” to include a proceeding before “a judge or court of the United States, a United States magistrate judge, a bankruptcy judge, a judge of the United States tax court, a special trial judge of the tax court, a judge of the United States Court of Federal Claims, or a federal grand jury.” The term also includes proceedings before Congress, proceedings authorized by law before a federal government agency and proceedings involving “the business of insurance whose activities affect interstate commerce before any insurance regulatory official or agency or any agent or examiner appointed by such official or agency to examine the affairs of any person engaged in the business of insurance whose activities affect interstate commerce.” There is no requirement under §1512 for the government to prove that the defendant had knowledge of the federal character of the judge, court, grand jury or government agency being influenced. The state of mind required by the word “corruptly” differs from statute to statute and court to court. Some courts require proof of a specific intent to violate the law in order to meet the corrupt intent standard. It is highly unlikely that such will be required under new subsection (c) of §1512 given the prevailing construction of “corruptly” under 18 U.S.C. §1503, the general statute covering obstruction of justice, and the preexisting portion of §1512.
Title VII, Section 802 of the Act also creates another new statute, 18 U.S.C. §1520, entitled “Destruction of corporate audit records,” which provides that:
(a)(1) Any accountant who conducts an audit of an issuer of securities to which section 10A(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78j-1(a)) applies, shall maintain all audit or review workpapers for a period of 5 years from the end of the fiscal period in which the audit or review was concluded.
(2) The Securities and Exchange Commission shall promulgate, within 180 days, after adequate notice and an opportunity for comment, such rules and regulations, as are reasonably necessary, relating to the retention of relevant records such as workpapers, documents that form the basis of an audit or review, memoranda, correspondence, communications, other documents, and records (including electronic records) which are created, sent, or received in connection with an audit or review and contain conclusions, opinions, analyses, or financial data relating to such an audit or review, which is conducted by any accountant who conducts an audit of an issuer of securities to which section 10A(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78j-1(a)) applies. The Commission may, from time to time, amend or
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supplement the rules and regulations that it is required to promulgate under this section, after adequate notice and an opportunity for comment, in order to ensure that such rules and regulations adequately comport with the purposes of this section.
(b)
Whoever knowingly and willfully violates subsection (a)(1), or any rule or regulation promulgated by the Securities and Exchange Commission under subsection (a)(2), shall be fined under this title, imprisoned not more than 10 years, or both.
(c)
Nothing in this section shall be deemed to diminish or relieve any person of any other duty or obligation imposed by Federal or State law or regulation to maintain, or refrain from destroying, any document.
This provision makes it clear that audit and review workpapers must be maintained for five years irrespective of any other provisions of law. Any and knowing and willful violation of this five year requirement for keeping audit and review workpapers is a criminal violation. The willfulness element in the statute requires proof of intentional violation of a known legal duty. Since the Act covers accountants who conduct audits of securities issuers under the Securities and Exchange Act (“Exchange Act”), this should not be a difficult standard for the government to meet in a case that otherwise involves the intentional destruction of audit papers. Significantly, subsection (2) of new §1520 requires the Securities and Exchange Commission (“SEC”) to promulgate rules necessary to the retention of “relevant records” such as “workpapers,” documents “that form the basis of an audit or review” and records “created, sent, or received in connection with an audit or review.” This appears to be a broader category than mere audit and review workpapers, as confirmed by recently proposed SEC rules, and knowing and willful violation of the duty to keep these records can also result in a criminal violation. Section 1520 does not diminish or relieve persons or entities of any duties or obligations imposed by other federal and state laws and regulations regarding the maintenance of documents and records. Thus, the interplay between §1520 and statutes such as 18 U.S.C. §1519 should be kept in mind. §1519’s prohibition of destroying documents in an effort to influence the “proper administration of any matter within the jurisdiction of any department or agency of the United States” is clearly elastic enough, in certain circumstances, to cover audit and review workpapers (and supporting documents) that are over five years old. Only the laborious development, circuit by circuit, of criminal federal case law will ultimately determine the manner in which such statutes fit together.
Title VIII, Section 807 of the Act creates a new general securities fraud statute, 18 U.S.C. §1348, entitled “Securities fraud,” which provides that:
Whoever knowingly executes, or attempts to execute, a scheme or artifice—
(1)
to defraud any person in connection with any security of an issuer with a class of securities registered under section 12 of the Securities Exchange Act of 1934 (15 U.S.C. 781) or that is required to file reports under section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78o(d)); or
(2)
to obtain, by means of false or fraudulent pretenses, representations, or promises, any money or property in connection with the purchase or sale of any security of an issuer with a class of securities registered under section 12 of the Securities Exchange Act of 1934 (15
U.S.C.
781) or that is required to file reports under section 15(d) of the Securities Exchange Act of 1934 (15
U.S.C.
78o(d)); shall be fined under this title, or imprisoned not more than 25 years, or both.
This catchall provision is modeled on the bank fraud statute, 18 U.S.C. §1344, and, to a lesser extent, the healthcare fraud statute, 18 U.S.C. §1347. Securities fraud has been punishable under the Exchange Act for decades. New §1348, however, dispenses with the Exchange Act’s requirement that a violation of Securities Law be willful, as well as the Exchange Act’s
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requirement that the fraud be “in connection with the purchase or sale” of securities. Instead of the willfulness element, §1348 requires that a defendant knowingly execute or attempt to execute a scheme or artifice to defraud or a scheme or artifice to obtain money or property by false or fraudulent pretenses. As a practical matter, based on judicial interpretation of the bank fraud statute, the government will have to prove both the knowing execution of the scheme and a specific intent to defraud. Intent to defraud is usually defined as an intent to deceive or cheat someone, typically with the object of enriching one’s self or depriving another of money or property.
Generally speaking, relieving the government of the duty to prove willfulness in fraud cases can be a significant benefit to the prosecution. A white-collar defendant’s argument to the jury that, however improper his conduct may have been, he did not intentionally violate a known legal duty is often a powerful tool in the hands of a capable criminal defense attorney. It is questionable, however, how significant the distinction between willful and intentional is in the securities fraud context, at least when the defendant is knowledgeable about securities-related matters. In addition, most white-collar indictments include counts charging conspiracy and aiding and abetting which effectively require proof of an intent to violate the law. Even the difference between defrauding someone “in connection with any security” and “in connection with the purchase or sale” of securities is not as great as it appears on its face, given the expansive interpretation of the latter phrase by federal courts construing the Exchange Act. Nevertheless, the creation of a broad new securities provision with expansive language modeled on the bank fraud statute should have substantive consequences. To begin with, the psychological effect of this statute on the average fraud prosecutor should not be underestimated. A whole group of federal prosecutors who do not typically think of securities fraud issues will now have available to them, right next to the mail, wire, bank and healthcare fraud statutes in their federal criminal code books, a similar new weapon. These often used and broadly worded and interpreted fraud statutes, with decades of judicial gloss behind them, tend to be habit forming for federal white collar prosecutors and carry along with them a certain set of thought processes and modes of operation with which these prosecutors are comfortable.
Although securities frauds have long been prosecuted under the mail and wire fraud statutes, §1348 dispenses with the need to explain in the charging instrument the entire securities regulatory regime and why a particular action constituted a fraud. The Act is broad enough to cover defrauding of investors as well as regulators. Moreover, case law regarding bank fraud schemes establishes that the mere violation of a regulation, if effectuated by a scheme that has fraud as one of its elements, is sufficient to constitute a crime.
Unlike the mail and wire fraud statutes, the bank and healthcare fraud statutes, upon which the securities fraud statute is modeled, do not typically allow the individual charging by criminal counts of each execution, or attempted execution, of the scheme to defraud. Rather, the execution or attempted execution of the scheme is seen as one continuing event, sometimes lasting several years, with a starting and ending point. This means that the execution of a scheme that began before Sarbanes-Oxley was enacted but continues beyond the date of enactment can be prosecuted under the Act. For purposes of establishing venue, moreover, the scheme can be charged in any federal district in which any part of the scheme was executed. Thus, a federal prosecutor in Raleigh, North Carolina, who wants to make a name for himself by prosecuting securities fraud can bring such a case in the Eastern District of North Carolina, even if most of the fraudulent activities took place in Manhattan. Perhaps the overriding point that should be stressed in discussing §1348 is that securities fraud violations have typically been prosecuted by a very small number of federal prosecutors in a very few locales. A far larger group of federal prosecutors work with the mail, wire, bank and healthcare fraud statutes and will now likely focus on the securities fraud statute as well. I believe that the enactment of this particular general securities fraud statute will have a far greater impact than is generally appreciated.
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Title IX, Section 902 of the Act creates 18
U.S.C. §1349, entitled “Attempt and conspiracy,” which provides that:
Any person who attempts or conspires to
commit any offense under this chapter shall
be subject to the same penalties as those
prescribed for the offense, the commission
of which was the object of the attempt or
conspiracy.
The “chapter” in question under this new statute is Chapter 63 of Title 18, which previously covered mail, wire, bank and healthcare fraud and now covers securities fraud as well. The mail, bank and healthcare fraud statutes already contain attempt requirements. The wire fraud statute does not contain such a requirement, but this has been of little consequence since the “execution” of a wire fraud scheme does not need to be successful under case law for a conviction to stand. New §1349 formally adds a statutory attempt component to the wire fraud statute.
Previously, conspiracies to commit mail, wire, bank or healthcare fraud, as well as conspiracies to commit most non-drug related federal offenses, were statutorily capped at five years. New §1349 specifically pegs the maximum sentences for mail, wire, bank, healthcare and securities fraud conspiracies to the respective maximum sentences for the underlying substantive offenses. Section 903 of Title IX of the Act, entitled “CRIMINAL PENALTIES FOR MAIL AND WIRE FRAUD,” increases the maximum term of imprisonment for mail and wire fraud from five years to thirty years. (The maximum bank fraud penalty is already thirty years and the healthcare fraud penalty is ten years unless the healthcare fraud results in serious bodily injury or death.) As a practical matter, Sections 902 and 903 of the Act will have little immediate effect. As noted, attempts are already incorporated into the federal fraud provisions. With respect to conspiracies, sentences are actually determined by the Guidelines and will typically be well under the new statutory maximums. Section 905 of Title IX of the Act does direct the United States Sentencing Commission (“Sentencing Commission”) to review white collar Federal Sentencing Guidelines (“Guidelines”) in order that the provisions of the Act are effectively realized. Moreover, the current Guidelines in most instances provide lesser penalties (a reduction of three points in the base offense level) for mere conspiracies and attempts. Yet the Sentencing Commission, in its recent emergency amendments to the Guidelines, failed to address this issue. Statutory maximums are sometimes lower than fraud-related guideline calculations. When this occurs, a defendant cannot be sentenced to a term any higher than the statutory maximum. The new statutory maximums appear to be sufficiently high to prevent this phenomenon from occurring in the future.
Title IX, Section 904 of the Act amends 29
U.S.C. §1131, which prohibits willfully violating the reporting and disclosure requirements concerning ERISA employee benefit plans, by increasing the maximum fines and term of imprisonment under §1131. The maximum term of imprisonment is increased from one to ten years, the maximum individual fine from $5,000 to $100,000 and the maximum fine for entities from $100,000 to $500,000. The alteration in the maximum term of imprisonment changes the violation of §1131 from a misdemeanor to a felony. This brings the alternate fine provisions of 18 U.S.C. §3571, which covers all federal felonies, into play, making the real maximum fine for individuals who violate 29 U.S.C. §1131 $250,000 or twice the pecuniary gain or loss caused by the crime. Entities are now likewise subject to paying twice the amount of such gain or loss.
Title IX, Section 906 of the Act creates a new statute, 18 U.S.C. §1350, covering “Failure of corporate officers to certify financial reports,” which provides that:
(a) Certification of Periodic Financial Reports. —Each periodic report containing financial statements filed by an issuer with the Securities Exchange Commission pursuant to section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)) shall be accompanied by a written statement by the chief executive officer and chief financial officer (or equivalent thereof) of the issuer.
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(b)
Content. —The statement required under subsection (a) shall certify that the periodic report containing the financial statements fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15
U.S.C. 78m or 78o(d)) and that information contained in the periodic report fairly presents, in all material respects, the financial condition and results of operations of the issuer.
(c)
Criminal Penalties. —Whoever—
(1)
certifies any statement as set forth in subsections (a) and (b) of this section knowing that the periodic report accompanying the statement does not comport with all the requirements set forth in this section shall be fined not more than $1,000,000 or imprisoned not more than 10 years, or both; or
(2)
willfully certifies any statement as set forth in subsections (a) and (b) of this section knowing that the periodic report accompanying the statement does not comport with all the requirements set forth in this section shall be fined not more than $5,000,000, or imprisoned not more than 20 years, or both.
Prior to enactment of this statute no federal criminal provision explicitly covered false certifications to the SEC by chief executive officers and chief financial officers. Section 1350 does not require any actual or intended effect on stock prices or any actual or intended pecuniary gain on behalf of a CEO or CFO. The distinction §1350 draws between willful and knowing violations appears to make little sense. It will be extremely difficult for any CEO or CFO who intentionally files false financial reports with the SEC to credibly argue, with all of the publicity over Sarbanes-Oxley and the fraud-related events necessitating its passage, that he did not know such conduct was unlawful. Contrary to public perception, however, it will still be possible for a particular CEO or CFO to argue that he was misled and deceived by others in certifying that a false financial statement was accurate. But this will be a somewhat difficult defense to make to a criminal false certification charge, given the even more detailed certification and control-implementing duties imposed on CEOs and CFOs by Section 302 of the Act. The conduct prohibited by §1350 can also be covered in certain circumstances by previously existing provisions, such as the mail and wire fraud statutes. Nevertheless, this presents a readily available prosecutorial tool for targeting a particular brand of high-level corporate misconduct. Moreover, it serves as both a warning and deterrent to CEOs and CFOs of their affirmative duty to determine the accuracy of financial reports.
Title XI, Section 1106 of the Act increases the penalties for criminal violation of the Exchange Act. The maximum prison term has been raised from five to ten years. The maximum fine for individuals has gone from $1,000,000 to $5,000,000 and for entities from $2.5 million to $25 million.
Title XI, Section 1107 of the Act creates a new offense entitled “RETALIATION AGAINST INFORMANTS,” which provides that:
(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.
This provision has been inserted as new subsection (e) of 18 U.S.C. §1513. This will be a very big stick for prosecutors engaged in the investigation of white-collar fraud. In terms of the action prohibited, the sweep of the statute is broad. Section 1513(e) punishes “whoever” violates its terms and therefore potentially applies to all individuals and entities, not just the publicly traded companies and their agents who are covered by title VIII, Section 806 of the Act, which provides civil protection to whistleblowers. 18 U.S.C. §1513(e) also covers “any [retaliatory] action harmful to any person.” (It is thus quite conceivable that the statute may be construed to cover retaliation against the
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child, spouse or friend of a whistleblower.) The government must prove that the Defendant’s actions were undertaken “for” the whistleblower’s providing of “any” “truthful” information to a “law enforcement officer.” Thus, §1513(e) does not reach retaliation against a whistleblower who provides information to a regulatory official, congressional committee or supervisory employee, or to a whistleblower who merely threatens to go to law enforcement authorities. (In this sense the new criminal provision is much narrower than civil Section 806 with respect to protected whistleblower activity.) Section 1513(e)’s requirement that any harmful action be “for” whistleblowing and that the action must be knowing and undertaken with an intent to retaliate, effectively forces the government to prove a defendant’s knowledge that the whistleblower has provided information to a law enforcement official.
The statute also requires the government to establish that “any” information provided by the whistleblower was truthful. A whistleblower providing both truthful and untruthful information to law enforcement authorities is presumably protected under §1513(e). It could be an affirmative defense to this statute that the accused reasonably believed the whistleblower’s information to be untruthful. It is by no means clear, however, that this defense will be available. It is unlikely that the statute requires the government to prove beyond a reasonable doubt, as an essential element of the offense, that the defendant knew or believed the whistleblower’s statement to be truthful. There is a significant difference in terms of proof between establishing the truth of a whistleblower’s statement and establishing a defendant’s knowledge that the statement was truthful. Nevertheless, a federal prosecutor directing a criminal investigation who wants to send a message that retaliation will not be tolerated need not worry about such niceties. There is nothing like a well-timed target or subject letter to a high corporate official to chill any thought of engaging in behavior that might be interpreted as retaliatory in nature.
Prior to this amendment, §1513 (b) (2) already provided some protection to informants but it required the government to prove bodily injury to the informant, damage to his property or threats to so injure or damage. Subsection (e)’s prohibition of “any action harmful to any person” appears to be far broader on its face. Interestingly, however, pre-existing §1513 (b) (2), which is still a valid provision, does not require that an informant’s information be truthful. In that sense, §1513 (e) provides less protection to a putative whistleblower than does §1513 (b) (2). Note that at least some of the whistleblower’s information concerning “any federal offense” must be truthful under §1513(e) in order for the statute to be violated, but that a whistleblower under civil Section 806 need only have a reasonable belief that the corporate conduct being exposed violates securities laws or regulations or federal fraud-related criminal statutes. Employers must be careful to keep in mind the criminal provisions of §1513(e) when fashioning whistleblower compliance programs.
The new crimes and enhanced criminal penalties created by the Act will not apply retroactively to conduct committed before enactment, due to the Constitution’s Ex Post Facto Clause. It should be noted, however, that conspiracy is a continuing offense, which ends whenever the conspiracy is completed. Therefore, a conspiracy that begins before enactment of the Act but continues beyond enactment can be prosecuted under the Act. With respect to the new securities fraud provision, 18 U.S.C. §1348, as well as the enhanced penalties under the mail and wire fraud statutes, the analysis is a little more complicated. As long as a mail or wire fraud scheme extends beyond enactment of the Act, and at least one mailing or wiring was made post-enactment, ex post facto issues should not arise. With respect to securities fraud, at least part of the execution must occur post-enactment. As noted earlier, in bank and healthcare schemes to defraud the execution covers the entire range of fraudulent activity. Individual executions are typically not charged in individual counts. Thus, as long as the execution of the scheme continues beyond the effective date of the Act, ex post facto problems should be surmountable by the prosecution. With respect to obstructions of justice, such as document destruction and alteration, the key event for statute of limitation purposes is the date of the alleged obstructive act. This is true irrespective of the date of the original wrongdoing that is allegedly being covered-up.
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New criminal provisions and enhanced statutory maximums must always be considered in tandem with the Federal Sentencing Guidelines, which determine the actual sentence that a convicted defendant will serve. Congress, through the Act, directed the Sentencing Commission to review and amend the Guidelines to reflect the seriousness of the conduct addressed in the Act. The Sentencing Commission responded with a rather modest emergency Guidelines amendment effective January 25, 2003. The amendment in pertinent part: 1) adds a two-level enhancement to the fraud Guideline for offenses involving 250 or more victims; 2) mandates a four-level enhancement and a minimum offense level of 51-63 months under the fraud Guideline for offenses that substantially endanger the solvency or financial security of: 100 or more victims, a publicly traded company or a company with 1,000 or more employees; 3) adds a four-level enhancement to the fraud Guideline if the offense involved a violation of securities law, whether or not specifically charged in the Indictment, and the defendant was an officer or director of a publicly traded company at the time of the offense; 4) adds a new two-level enhancement (to the previous maximum of 26 levels) for fraud Guideline offenses where the loss exceeds $200 million and a further two-level enhancement (for a new maximum of 30 levels) for offenses where the loss exceeds $400 million; 5) increases the base offense level for the obstruction of justice Guideline from 10-16 months to 15-21 months and adds a two-level enhancement if the offense: involves destruction or alteration of a substantial number of records, involves destruction or alteration of an especially probative document or is otherwise extensive in scope, planning or preparation; and 6) ties the new offense (18 U.SC. §1520) of destruction of corporate audit records to preexisting Guideline §2E5.3, unless the offense is committed with the intent to obstruct justice in which case the obstruction of justice Guideline applies.
In considering the effect of Sarbanes-Oxley’s criminal provisions, we should not lose sight of the intangibles. Not only do we have new statutes (and more enforcement funds) available to investigators and prosecutors, but also, more importantly, we are in a period of loud public outcry and attendant public pressure to do something about alleged corporate fraud. The people in charge of criminal matters in the United States Department of Justice are experienced white-collar litigators who have shown themselves to be very aggressive. The prosecution of Arthur Andersen LLP for obstruction-related offenses, in addition to sending shock waves throughout the American business community, sent a clear signal to the federal law enforcement and prosecutorial family. Aggressive enforcement and prosecution are the order of the day. (It is one of the ironies of recent history that Republican Administrations, the assumed friends of big business, often accomplish more in terms of successful business-crimes prosecutions than their Democratic counterparts.) Indeed, we have not seen such an active display of white-collar prosecution since the period just after the “discovery” of the savings and loan scandal. We are likely to be in this period for some time to come, as almost every week brings new disclosures of alleged corporate misdeeds and restatements of earnings. Moreover, the President has created a Corporate Fraud Task Force chaired by Deputy Attorney General Larry Thompson, which, if history repeats itself, should focus prosecutorial attention even more keenly on the white-collar fraud issue. It is this atmosphere of prosecutorial aggressiveness, rather than the mere creation of new statutes, that should cause the most concern to the corporate community.