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Sarbanes-Oxley News & Developments
Former E&Y Partner Arrested on Sarbox-Related ChargesFBI charges Thomas Trauger with obstructing federal investigations of NextCard Inc. audit work.
> > Federal officials said a former partner of Ernest & Young has been arrested by FBI agents on criminal charges for obstructing federal investigations.
Officials are calling this one of the first cases involving document destruction covered by the Sarbanes-Oxley corporate reforms.
In addition, the SEC instituted two administrative proceedings - one against Trauger and Michael Mullen, a former audit manager of E&Y, for engaging in unethical and improper professional conduct as a result of their alledged alteration and destruction of documents, and a separate settled proceeding against Oliver Flanagan, a former senior manager at the firm, for his role in the alledged document destruction.
The charges followed a guilty plea by Flanagan to one count charging him with obstructing the examination of a financial institution.
Trager faces a maximum penalty of five years in prison and a fine of $250,000. For the charge of falsification of records in a federal investigation - charge brought under Sarbanes-Oxley - he faces a maximum penalty of 20 years in prison and a fine of $250,000.
Source: CFO
Published:2003-09-26
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