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EDITIONS
Wednesday, 31 July, 2002, 05:44 GMT 06:44 UK
Bush attacks corporate fraud
President George W Bush
President Bush: Lawbreakers will be "exposed and punished"
President Bush has given his strongest message yet that he will not tolerate corporate fraudsters..


In the aftermath of 11 September we refused to allow fear to undermine our economy and we will not allow fraud to undermine it either

George W Bush
On Tuesday, Mr Bush signed into law tougher penalties for corporate fraud and tighter regulation of companies and accountants.

The president said dishonest corporate leaders now knew they would be punished and exposed.

But for the Democrats, Mr McAuliffe said Mr Bush should reveal details of his stock sales and a low-interest loan he accepted while he was a director at Harken Energy Corp 10 years ago.

Wall Street trader
Investors have lost faith in corporate America
The Securities and Exchange Commission, the government's corporate watchdog, questioned Mr Bush in 1991 about his 1990 sale of Harken shares, before the company reported large losses.

The investigation ended without any action against Mr Bush, but questions linger over the issue as well as accounting practices at the Halliburton oil-services firm during Vice President Dick Cheney's tenure as chief executive.

The new legislation imposes harsher penalties for corporate wrongdoing, and increases funding for the US financial watchdog, the Securities and Exchange Commission (SEC).

It will also create a new board to oversee the accounting industry.

President Bush vowed to give corporate crooks "hard time" instead of "easy money".

He said the law sent a signal to anyone intending illegal activity that they would be "exposed and punished".

"No boardroom in America is above or beyond the law," he said.

New measures

A Public Accounting Oversight Board will be established to oversee auditors of public companies.

Maximum jail sentences for wire and mail fraud will increase to 20 years.

And a new crime on securities fraud will carry a 25-year maximum sentence.

"In the aftermath of 11 September we refused to allow fear to undermine our economy and we will not allow fraud to undermine it either," President Bush said at the signing ceremony.

He added that the law "says to every American: there will not be a different ethical standard for corporate America than the standards that applies to everyone else".

It is hoped that the measures will help to restore investor confidence in US businesses, which has been badly shaken by the recent wave of scandals.

And there were promising signs on Wall Street on Tuesday, with stocks managing to hold on to most of the huge gains seen on Monday.

"The fears that were running loose a week and a half ago that half the companies are giving fraudulent numbers are evaporating and that has allowed for some buying," said Alfred Kugel, senior investment strategist at Stein Roe Investment Counsel.

 WATCH/LISTEN
 ON THIS STORY
US President George W Bush
"We will not allow fraud to undermine our economy"
The BBC's Nick Bryant
"Many Americans have been asking 'who can we trust in corporate America?' "
The BBC's Mark Gregory
"Corporate bosses have welcomed the the reforms"

Politics of regulation

Worldcom goes bust

Enron fall-out

Andersen laid low

FORUM
See also:

15 Jul 02 | Business
30 Jun 02 | Business
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