U.S. Code » Title 15 » Chapter CHAPTER 98— PUBLIC COMPANY ACCOUNTING REFORM AND CORPORATE RESPONSIBILITY › Subchapter SUBCHAPTER III— CORPORATE RESPONSIBILITY

15 U.S.C. § 7242

Improper influence on conduct of audits

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(a) Rules to prohibit

It shall be unlawful, in contravention of such rules or regulations as the Commission shall prescribe as necessary and appropriate in the public interest or for the protection of investors, for any officer or director of an issuer, or any other person acting under the direction thereof, to take any action to fraudulently influence, coerce, manipulate, or mislead any independent public or certified accountant engaged in the performance of an audit of the financial statements of that issuer for the purpose of rendering such financial statements materially misleading.

(b) Enforcement

In any civil proceeding, the Commission shall have exclusive authority to enforce this section and any rule or regulation issued under this section.

(c) No preemption of other law

The provisions of subsection (a) shall be in addition to, and shall not supersede or preempt, any other provision of law or any rule or regulation issued thereunder.

(d) Deadline for rulemakingThe Commission shall—(1) propose the rules or regulations required by this section, not later than 90 days after July 30, 2002; and(2) issue final rules or regulations required by this section, not later than 270 days after July 30, 2002.(Pub. L. 107–204, title III, § 303, July 30, 2002, 116 Stat. 778.)
Notes of Decisions
Cited in 7 cases, 2005–2019 · leading case: In Re Digimarc Corp. Derivative Litig., 549 F.3d 1223 (9th Cir. 2008).
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In Re Digimarc Corp. Derivative Litig., 549 F.3d 1223 (9th Cir. 2008). “15 U.S.C. § 7242 (a). Diaz notes that section 303, unlike section 304, contains a specific restriction on private enforcement—it gives the Commission "exclusive authority to enforce this section.”
In Re iBasis, Inc. Derivative Litig., 532 F. Supp. 2d 214 (D. Mass. 2007). · cites it 2× “9 See 15 U.S.C. § 7242 (b); 15 U.S.C. § 7244 (a)(2)(B).”
Neer v. Pelino, 389 F. Supp. 2d 648 (E.D. Pa. 2005). “” 15 U.S.C. § 7242 (a), (b). Section 804, which extends the statute of limitations for claims in particular securities fraud cases, states that “[njothing in this section shall create a new, private right of action.”
Kogan Ex Rel. Ligand Pharm. Inc. v. Robinson, 432 F. Supp. 2d 1075 (S.D. Cal. 2006). “15 U.S.C. § 7242 (a). It provides that “the Commission shall have exclusive authority to enforce this section.”
Diaz v. Davis, 549 F.3d 1223 (9th Cir. 2008). “15 U.S.C. § 7242 (a). Diaz notes that section 303, unlike section 304, contains a specific restriction on private enforcement — it gives the Commission “exclusive authority to enforce this section.”
Buhannic v. Tradingscreen Inc. (S.D.N.Y. 2019). “15 U.S.C. §7242 (b). Additionally, TradingScreen is a privately held company and thus is not subject to section 404 of the Sarbanes- Oxley Act of 2002.”
USA v. Gagalis et al., 2006 DNH 033 (D.N.H. 2006). “See 15 U.S.C. § 7242 (a). 2. Analysis Defendants argue that the SEC exceeded its rulemaking authority when it adopted Rule 13b2-2 because the conduct it purported to regulate was not prohibited under the Exchange Act.”
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