Senate Passes SB 783; Bill Would Fill Gaps in Federal Law by Punishing Execs Who Cover-Up Fraud, Protecting Whistleblowers
Sacramento--The toughest corporate accountability legislation in the United States passed the California Senate today. SB 783 (Escutia), which was sponsored by the Foundation for Taxpayer and Consumer Rights, fills holes in recently passed federal legislation (Sarbanes-Oxley), creating stiff fines for high-ranking corporate officials who cover up accounting fraud, and protecting whistleblowers from retaliation for coming forward with information about such misdeeds. The bill has already passed the Assembly, and Governor Davis has indicated to reporters that he is considering signing the bill into law.
"By signing this bill, Governor Davis will put California on the front line in the fight to stop corporate fraud," said FTCR's organizing director, Carmen Balber. "SB 783 is California's early warning system to protect against the next Enron or WorldCom. This legislation will not only provide safe harbor for workers who want to blow the whistle, but will actually require executives to come forward when they know of accounting scams."
SB 783 will:
- Punish executive silence by imposing up to $100,000 fines on executives, directors and upper-level financial managers who cover up accounting fraud.
- Impose up to $1 million fine on corporations that withhold information about financial fraud.
- Provide new protections to employees who refuse to participate in illegal activity or blow the whistle on illegalities at their company or organization.
- Establish a Whistleblower Hotline to provide employees with confidential access to law enforcement authorities.