SB 1452 Would Impose Hefty Fines on Executives Who Cover Up Financial Fraud
Sacramento, CA -- Consumer advocates testified called on Senators to pass SB 1452 (Escutia), which would create new protections for whistleblowers and new obligations on executives who have information about financial fraud.
"After Enron, we need more tools to ensure that corporate fraud is stopped before the damage is done," said Douglas Heller, senior consumer advocate with the Foundation for Taxpayer and Consumer Rights (FTCR). "This proposal will end the silence in the executive suites that has allowed financial frauds to be perpetrated and has cost pensioners, employees and investors dearly."
SB 1452, which was heard in the Senate Public Safety Committee today, will:
- Provide new protections to whistleblowers and subject employers to civil penalties for retaliating against employees who report or who refuse to participate in illegal activity.
- Establish a Whistleblower Hotline to provide employees with confidential access to law enforcement authorities.
- Impose up to $100,000 fines on executives, directors and high-ranking managers who cover up accounting fraud.
- Impose up to $1 million fine on corporations that withhold information about financial fraud.
The vote in the Public Safety Committee was 4-2 (Ayes: Burton, Polanco, Sher, Vasconcellos -- Noes: Margett, McPherson).