Securities Lawyer's Deskbook
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The

Sarbanes-Oxley Act of 2002





Section 3 -- Commission Rules and Enforcement


  1. Regulatory Action. The Commission shall promulgate such rules and regulations, as may be necessary or appropriate in the public interest or for the protection of investors, and in furtherance of this Act.

  2. Enforcement.

    1. In general. A violation by any person of this Act, any rule or regulation of the Commission issued under this Act, or any rule of the Board shall be treated for all purposes in the same manner as a violation of the Securities Exchange Act of 1934 or the rules and regulations issued thereunder, consistent with the provisions of this Act, and any such person shall be subject to the same penalties, and to the same extent, as for a violation of that Act or such rules or regulations.

    2. Investigations, injunctions, and prosecution of offenses. Section 21 of the Securities Exchange Act of 1934 is amended--

      1. in subsection (a)(1), by inserting "the rules of the Public Company Accounting Oversight Board, of which such person is a registered public accounting firm or a person associated with such a firm," after "is a participant,";

      2. in subsection (d)(1), by inserting "the rules of the Public Company Accounting Oversight Board, of which such person is a registered public accounting firm or a person associated with such a firm," after "is a participant,";

      3. in subsection (e), by inserting "the rules of the Public Company Accounting Oversight Board, of which such person is a registered public accounting firm or a person associated with such a firm," after "is a participant,"; and

      4. in subsection (f), by inserting "or the Public Company Accounting Oversight Board" after "self-regulatory organization" each place that term appears.

    3. Cease-and-desist proceedings. Section 21C(c)(2) of the Securities Exchange Act of 1934 is amended by inserting "registered public accounting firm (as defined in section 2 of the Sarbanes-Oxley Act of 2002)," after "government securities dealer,".

    4. Enforcement by federal banking agencies. Section 12(i) of the Securities Exchange Act of 1934 is amended by--

      1. striking "sections 12," each place it appears and inserting "sections 10A(m), 12,"; and

      2. striking "and 16," each place it appears and inserting "and 16 of this Act, and sections 302, 303, 304, 306, 401(b), 404, 406, and 407 of the Sarbanes-Oxley Act of 2002,"

  3. Effect on Commission Authority. Nothing in this Act or the rules of the Board shall be construed to impair or limit--

    1. the authority of the Commission to regulate the accounting profession, accounting firms, or persons associated with such firms for purposes of enforcement of the securities laws;

    2. the authority of the Commission to set standards for accounting or auditing practices or auditor independence, derived from other provisions of the securities laws or the rules or regulations thereunder, for purposes of the preparation and issuance of any audit report, or otherwise under applicable law; or

    3. the ability of the Commission to take, on the initiative of the Commission, legal, administrative, or disciplinary action against any registered public accounting firm or any associated person thereof.


Legislative History


July 30, 2002, 107 P.L. 204, § 3, 116 Stat. 745.

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