Enforcement and Penalties Flashcards
7 cards from real CCT practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Enforcement and Penalties flashcards as text
Under the Sarbanes-Oxley Act Section 302, what is the maximum criminal penalty for a CEO or CFO who knowingly certifies a false financial report?
Answer: $5 million and 20 years imprisonment
SOX Section 906 provides for criminal penalties of up to $5 million and 20 years imprisonment for willful false certifications of financial statements.
What term describes the penalty structure where the severity of a fine increases based on the number of prior violations within a rolling time period?
Answer: Recidivist multiplier
A recidivist multiplier increases penalties when a company has prior violations, reflecting that repeat offenders warrant greater deterrence.
The SEC's Whistleblower Program under Dodd-Frank requires that awards be paid only when the whistleblower's information leads to a successful enforcement action resulting in sanctions exceeding what threshold?
Answer: $1 million
SEC whistleblower awards are available only when the related enforcement action results in monetary sanctions exceeding $1 million.
Under the Bank Secrecy Act, what is the maximum civil money penalty per willful violation for failing to file a required Currency Transaction Report (CTR)?
Answer: $1,000,000
Willful BSA violations, including failure to file CTRs, can result in civil penalties up to $1,000,000 per violation.
What is a 'cease and desist order' in the context of regulatory enforcement?
Answer: A formal regulatory directive requiring a company to stop a specific unlawful activity
A cease and desist order is an official regulatory command requiring the recipient to stop specified illegal or improper conduct.
Which principle guides sentencing courts to consider a company's compliance program when determining penalties under the U.S. Federal Sentencing Guidelines?
Answer: The culpability score adjustment
The Federal Sentencing Guidelines use a culpability score that can be reduced if the organization had an effective compliance program in place at the time of the offense.
A company enters into a Non-Prosecution Agreement (NPA) with the DOJ. What key obligation typically distinguishes an NPA from a Deferred Prosecution Agreement (DPA)?
Answer: No charges are filed under an NPA, whereas charges are filed but deferred under a DPA
Under an NPA, no charges are filed at all as long as the company fulfills its obligations, while a DPA involves charges that are suspended pending compliance.