Legislation to stiffen penalties against corporate crooks was approved as one of the last acts of the 20th special session of the Nevada Legislature.
Assembly Bill 10 was authored by Assemblyman David Goldwater, D-Las Vegas, in the wake of news stories and investigations of companies which concealed their true financial state from stockholders and hid or destroyed evidence of corporate misconduct to frustrate investigators.
It creates a new crime for willfully introducing evidence which isn't genuine and for concealing a violation or hindering an investigation of a company.
Corporate officers and employees are barred from destroying evidence or altering records to cover corporate misdeeds.
It makes it illegal to conceal the identity of someone who violates securities laws and increases the penalty for violations to a minimum of a year and up to 20 years in prison and a fine up to $500,000.
Goldwater said to give investigators more time to work on complex corporate cases, AB10 also doubles the statute of limitations from 1 to 2 years after discovery of a violation. Investigators say they have run into statute of limitation problems because complex business investigations take so long.
And, in response to discoveries that several auditors actually helped conceal problems in client companies because they were also the accounting firm for the company, AB10 bars firms from doing both. It precludes internal audits by the same independent accountant who provide audits, compiled statements or reviews of the financial statements of a company.