Whistleblower Complaint by 8oCYZ393

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									             PRIVELEGED AND CONFIDENTIAL REPORT

                       Whistleblower Complaint
   Complainant vs. Hillenbrand Industries, Inc./dba Batesville Casket
                              Company
                 Reference Case No: 2006-SOX-0072

Susan M. Hinds (Complainant- Confidentiality Requested) filed a Whistleblower
Complaint regarding Hillenbrand Industries/dba Batesville Casket Company with OSHA
Chicago Regional Office in early November 2005 and was investigated by the
Indianapolis Office (see Exhibit 1). Complainant filed with the United States Department
of Labor and the Case No: 2006-SOX-0072 which is currently in litigation. During the
litigation, Hillenbrand Industries, Inc/dba Batesville Casket Company has made
representations to the Courts that are in violation of SOX Act 2002 as evidenced below:

   1) On June 23, 2006, a Position Statement was filed with the US Department of
      Labor, Judge Alice M. Craft, which contained what appear to be multiple false
      statements that the Respondent Company has knowingly made to the Courts with
      the perceived intent to impede, obstruct, or influence the investigation or proper
      administration of this matter. On page 4 of this Position Statement document,
      section titled: Complainant’s Complaints of Inappropriate Comments are
      Investigated-there are many misleading statements about the Ethics Investigation.
      For example, the Respondent Company stated, “Complainant made absolutely no
      allegation of financial or other legal improprieties at BSI (Batesville Casket
      Company) or at Hillenbrand Industries or any other matters that are now the
      subject of this action.” Another example, “Complainant Did Not Have A
      Reasonable Belief That Respondent’s Violated Any Applicable Laws”. The
      Complainant has clear and convincing evidence to demonstrate that she did in fact
      report questionable business practices and reasonably believed that the
      Respondent Company was violating various laws, which included financial and
      ethical concerns starting as early as March 2005 and until her departure in July
      2005. This would include but not limited to the following attempts to report the
      financial questionable business practices and other concerns.
          a) March 14, 2005, Complainant’s acting supervisor, Hillenbrand VP
              Corporate Development informed Complainant that BCC CFO followed
              VP Corporate Development to her office and told VP Corporate
              Development to “Fuck Off” as BCC CFO towered over VP Corporate
              Development in a very aggressive and intimidating manner, violation of
              the companies “Zero Tolerance Policy” “Anti-Harassment Policy” and
              “Violence in the Workplace Policy”. BCC CFO is really tall (around 6’
              4”) and VP Corporate Development is small and petite (around 5’3”) and
              she stated that this made her really uncomfortable. VP Corporate
              Development reported this Hillenbrand CFO and no investigation was
              done—Complainant was never contacted. Complainant reported to VP
              Corporate Development her concern about the intangible valuation that
              BCC CFO set independent of the team, by intimidation of finance staff,

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   including Complainant, or exclusion of opinions from the appropriate
   parties, into a materially different number. Complainant also voiced her
   concerns relating to NAPA tax evasion concerns that would leave the
   company liable if purchased without resolution. Complainant had
   discussed this tax evasion concern with BCC CEO, asking BCC CEO if
   they had performed background checks on these guys and indicating that
   the company would possibly be liable for unpaid taxes in the future if the
   company is purchased.
b) Complainant later told HR Director, about the incident and Rutledge never
   investigated it nor provided Complainant any feedback relating to
   Complainant concerns relating to this specific issue. Later, Complainant
   informed HR Director that all it would take is a phone call—HR Director
   did not comment. Complainant completed her work on the project in
   April 2005 and scheduled a meeting for April 2, 2005 with BCC VP HR,
   to discuss her concerns. BCC VP HR was unavailable on that day,
   Complainant went to lunch with BCC HR Director Accounting and
   discussed concerns relating to BCC CFO’s behavior and intimidation of a
   VP. BCC HR Director Accounting told Complainant that she heard
   nothing but good about Complainant and that she was really intelligent.
   Shortly after this meeting, Complainant experienced character defamation
   by BCC CFO and unequal treatment (discrimination) as compared to her
   peers and subordinates.
c) April 1, 2005, Complainant created a M&A Reflections Report (NAPA)
   and distributed it to the CFO’s indicating that the finance leaders “were
   setting the numbers”.
d) March 30, 2005 Complainant had a meeting in VP Corporate
   Development’s office from 4:30 pm to 5:15 pm and Complainant
   informed VP Corporate Development of her concerns with BCC CFO’s
   behavior, past and present, including his aggressive and offensive
   behavior (i.e. telling Complainant “Fucking” in an aggressive manner as
   noted above) and the way BCC CFO treated Complainant subordinate in
   the meeting regarding her previous job. VP Corporate Development, VP,
   and appointed as Complainant’s immediate boss at the time, told
   Complainant to document everything and to keep it off the company
   premise. VP Corporate Development told Complainant not to use the
   company computer because Hillenbrand Vice President IT, can access all
   this information and possibly leak it to BCC CEO, whom is known to be
   BCC CEO’s close confidant. VP Corporate Development stated if
   Complainant uses company property to document her concerns that this
   could be considered misuse of company property and Complainant could
   be terminated. VP Corporate Development stated that this is a Hostile
   Work Environment and unless you are a tramp and sleep your way to the
   top that BCC CFO will use hostility and aggression—and that this
   behavior will only get worse not better. VP Corporate Development stated
   something along the lines of, “that the next thing you know you will be
   fired, it won’t be fair, and you will be crying over your computer as you’re
   forced to pack your belongings. It won’t be fair but there is nothing that
   you can do about it”. Ironically, both Complainant and VP Corporate

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   Development were forced out of the company as believed to be a direct
   result of this NAPA deal and other reported ethical violations.
   Complainant knows that VP Corporate Development reported her
   concerns to Hillenbrand CFO and no corrective action took place as
   Complainant is getting the same type of treatment from BCC CFO—
   nothing changed but actually got worse. Complainant researched the
   company policy and it stated that if you are or are a witness of
   harassment—it is your responsibility to report it or you will be subject to
   discipline.
e) May 24, 2005 at 8:30 am Complainant had the meeting with Hillenbrand
   CFO and Hillenbrand VP Corporate Development to report discrimination
   and questionable business practice concerns. Complainant stated that she
   believes BCC CFO is setting the numbers and employees are asking about
   it especially Accounting Director and Mark Logistics Director.
   Complainant stated that the NAPA acquisition model and price BCC CFO
   calculated was too high and that Complainant informed him of such.
   Complainant felt as if she was being blamed for the deal falling through
   although she was merely doing her job. Complainant provided Hillenbrand
   CFO a copy of the Enhanced Business Reporting Business Plan that
   Complainant authorized. Hillenbrand CFO had told Complainant at the
   meeting that he had heard nothing negative about Complainant and that
   everyone was excited to work with Complainant. Hillenbrand CFO asked
   Complainant if she would be interested in another position with the
   company at Hill Rom or Corporate—Complainant said yes. After the
   meeting, Complainant told them that she needed time to consider the next
   steps. Complainant made it clear that she did not want to report to BCC
   CFO anymore and was made uncomfortable in meetings with him.
   Hillenbrand VP Corporate Development later informed Complainant that
   Hillenbrand CFO stated that he believed that BCC was retaliating against
   Complainant due to the acquisition not going through. Complainant and
   Hillenbrand VP Corporate Development were removed from all future
   M&A work, but other BCC employees were not, because both told the
   truth about the intangible valuation model, questioned the purchase price
   and the asset impairment issue, a potential violation of SOX, questionable
   business practices, and complaints of discriminatory/intimidating behavior
   from male executives.
f) June 1, 2005 Complainant met with Hillenbrand General Counsel from
   12-1:30 pm and after the discussion Hillenbrand General Counsel stated
   they needed to take action immediately and an investigation was to begin.
   The General Counsel fraudently induced Complainant into thinking that
   the Ethics Investigation was being handled by the Audit Committee and in
   compliance with the Company’s Ethics Policy. In this meeting,
   questionable financial business transactions and other concerns were
   clearly reported and only to later learn the company did not investigate
   any of the financial issues but could not confirm as they would not let the
   Complainant see the findings report.
g) June 3, 2005 from 11-2 am Complainant is requested to meet with the 2
   outside investigators/attorneys, General Counsel, and Hillenbrand HR VP

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               for Complainant to report her concerns relating to the violations of
               company policy, the denial of a BCC complaint process, gender
               discrimination, retaliatory tactics, and questionable business practices. The
               Complainant was never contacted by the investigators to see any financial
               reports or documentation which was a “red flag” to Complainant as she
               had several areas for this investigation, some of which were shared in the
               original intake meeting.
           h) June 23, 2005, Complainant was informed by the Ethics committee that
               the company has done nothing wrong but acknowledges it has found some
               areas of improvement but nothing illegal or unethical. Complainant
               disputed their findings stating that this was not possible and referred to an
               EBRC report to indicate that the company had serious transparency issues
               and was misleading the investing public. This report was given to
               Hillenbrand Corporate CFO, and VP Corporate Development on May 23
               when Complainant reported concerns relating to discrimination,
               retaliation, and setting the numbers. General Counsel acknowledged
               seeing the EBRC report.
    2) Complainant contends that she is being retaliated against due to her involvement
       in protected activities, as evidenced by some of the following (this is not all
       actions but serves as a starting point):
           a) In early December 2005, upon Complainant release from medical
               disability, the company did not provide any reasonable accommodations to
               the employee, in spite of her known medical condition and thus violating
               ADA rights, regarding the release of her personal items in the office. The
               company stated they would ship these goods (voice mail available upon
               request) but then later refused to honor this arrangement in spite of
               Complainant’s request to provide reasonable accommodations due to
               certain medical restrictions at that time. The company held these personal
               items for almost 60 days and this is not standard practice or operating
               procedure for other company employees.
           b) Complainant became aware that she was being blacklisted from certain
               employment opportunities and involving certain employees of the above
               mentioned companies and others. One example involves a Chief Financial
               Officer position of which Complainant was informed that the company
               was “excited about her candidacy” and a salary in the $200,000 range plus
               benefits was discussed (salary was confirmed within their range).
               Complainant was abruptly dropped from the candidacy list and upon
               further research, determined that a former boss of Complainant was on the
               Board of this company. Ultimately this position was given to a male that
               previously worked for Hillenbrand Industries, Inc. (and believed to be
               reporting to Complainants former boss directly or indirectly) and
               Complainant calls were never returned as repeatedly requested of Human
               Resources. Complainant believes that her involvement in protected
               activities, including Title VII, impacted her future employability/loss of
               wages and benefits, and resulted in a continued retaliation campaign1.

1
    The Practices Challenged in Prior or Pending Statutory Proceedings Need Not Have Been Engaged in
by the Named Respondent: An individual is protected against retaliation for participation in employment

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                Complainant has voice mails and evidence to support this allegation and
                can be made available upon request.
             c) The Complainant was labeled as a “trouble maker” by Respondent
                Company and warned other Respondent Company employees and others
                to stay away from her. This had a spillover effect as these conversations
                were shared with business and accounting professionals outside of the
                company and which impacted the Complainant’s peaceful existence in her
                daily life, disrupted her employment opportunities, her social interactions
                with others, and her pursuit for life, liberty, and happiness.
             d) On July 27, 2006, Complainant suffered from extreme anxiety, emotional
                distress, and certain physical ailments which were directly attributable to
                the deposition process that was orchestrated by and the behavior exhibited
                by the Respondent representatives and their legal counsel. The
                Complainant was surprised to find she was being videotaped in this
                deposition with four company representatives present, some of which are
                to be deposed as a witness in this administrative proceeding. This very
                fact had a chilling effect on the witness and put undue and unnecessary
                stress in this fact finding process. The number of Respondent
                representatives was beyond reasonable (4 to 1 ratio) and left the witness
                feeling as if she was being intimidated by the sheer presence of so many
                adversaries2. There was no purpose to videotape this deposition and
                Complainant believed it was a way to unnerve her during the process, with
                the knowledge that this video tape could be replayed in the future which
                was equally disturbing. At no time was Complainant informed why a
                video deposition was absolutely necessary and Respondent did not obtain
                Complainant’s signature and consent to release this video for viewing
                and/or distribution.

                  The deposition began with requests of full disclosure of very personal and
                  private facts regarding the Complainants medical conditions with
                  Respondent company representatives in the room that did not need to
                  know this private information, if even relevant to the matter at hand. This
                  made Complainant feel uncomfortable and felt it was a humiliating and

discrimination proceedings even if those proceedings involved a different entity. For example, a violation
would be found if a respondent refused to hire the charging party because it was aware that she filed an
EEOC charge against her former employer. Additionally, retaliatory acts designed to interfere with an
individual's prospects for employment are unlawful regardless of whether they cause a prospective
employer to refrain from hiring the individual. As the Third Circuit stated, "an employer who retaliates
cannot escape liability merely because the retaliation falls short of its intended result." Lastly, adverse
actions need not qualify as "Ultimate Employment Actions" or “Materially Affect the Terms or Conditions
of Employment” to constitute retaliation. Courts have recently held that the retaliation provisions apply
more broadly, which includes but is not limited to, actions that materially affect the terms, conditions, or
privileges of employment.

2
  Indiana Code- Civil Law and Procedure Title 34, Section 34-47-3-3; Assaulting, influencing, or
intimidating witnesses: Sec. 3 (D) states: A person who in manner influences, intimidates, or attempts to
influence a witness to give or abstain from giving testimony in any case, or to abstain from attending as a
witness in any case, is guilty of an indirect contempt of court in which such witness may be called to
testify, if the acts are done elsewhere, out of the presence of the court.

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         publicly demeaning experience. Additionally, these medical facts are
         irrelevant to the Whistleblower case as the company denied the
         Complainant’s short term disability knowingly and willfully. During the
         proceeding, the Respondent’s were perceived as passing notes, making
         negative facial expressions, finger pointing, influencing attorney by use of
         body language (i.e. nail biting, head shaking, etc…); facial expressions
         (i.e. angry- red, surprise, nervousness): and vocal expressions (i.e.
         laughing, scolding, admonishing, accusatory tones, etc…), in an attempt to
         intimidate and influence the witness during her testimony (see footnote 2).

         The deposition began around 9:30 am lasting until after 4:00 pm with the
         intimidation culminating into retaliatory statements regarding
         Complainants involvement in protected activities. Respondent was
         perceived by Complainant as attempting to publicly humiliate the
         Complainant, punish her, and openly retaliate3 against her for exercising
         her rights under Title VII and whistleblower laws. Many statements were
         made that were just not true or were intended to belittle her, however the
         Complainant was so overwhelmed by the intimidation and aggression, she
         believes it influenced her answers in some instances and did not allow
         thoughtful contemplation and time to answer the question. The
         Complainant already knows of certain dates that were innocently given to
         the Respondent that were incorrect but Complainant was never given a
         chance to clarify it or correct it even in spite of Complainant asking for a
         copy of resume in an attempt to clarify facts regarding Hinds former
         employment and history. Strategically, the Respondent did not address the
         Whistleblower Case sufficiently and appeared to avoid covering the


3
  According to the Equal Employment Opportunity Commission on July 30, 2006: An
employer may not fire, demote, harass or otherwise "retaliate" against an individual for filing a
charge of discrimination, participating in a discrimination proceeding, or otherwise opposing
discrimination. The same laws that prohibit discrimination based on race, color, sex, religion,
national origin, age, and disability, as well as wage differences between men and women
performing substantially equal work, also prohibit retaliation against individuals who oppose
unlawful discrimination or participate in an employment discrimination proceeding. Even if the
prior protected activity alleged wrongdoing by a different employer, retaliatory adverse actions are
unlawful. For example, it is unlawful for a worker's current employer to retaliate against him for
pursuing an EEO charge against a former employer. Covered individuals are people who have
opposed unlawful practices, participated in proceedings, or requested accommodations related to
employment discrimination based on race, color, sex, religion, national origin, age, or disability.
Individuals who have a close association with someone who has engaged in such protected
activity also are covered individuals. For example, it is illegal to terminate an employee because
his spouse participated in employment discrimination litigation.




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                  Complaint in any level of detail for the video taped deposition. This is
                  strikingly similar to the approach used when the Complainant stepped
                  forward at the Respondent company in 2005 to report questionable
                  business practices, discrimination, and retaliation.

    It appears, the Respondents are trying to focus on a sexual harassment case but the
    Complainant opted not to litigate this matter in spite of obtaining a “Right To Sue”
    letter from the EEOC. Lastly, the Respondent publicly exposed private facts to other
    parties in the room (i.e. protected activities) as well as on the video tape, while
    demanding the Complainant breech prior employment confidentiality agreements,
    harassing her, and demeaning her professional stature in front of the Respondents.
    This was evidenced by the Respondent parties laughing at the Complainant during her
    deposition testimony relating to Title VII and protected activity—Complainant
    viewed this as clear retaliation4 and intimidation during her deposition and
    unnecessary interrogation of Complainant for irrelevant information. The Respondent
    had knowledge, as answered in the Complainant’s Interrogatories and provided to
    Respondent prior to deposition, regarding litigation in this Whistleblower case5 and
    was badgering the witness by not respecting this answer.

    In closing, the Complainant contends that this was sufficient notice, in addition to all
    other evidence provided, to the Respondent Company regarding questionable
    business practices and sees multiple violations of SOX Act 2002 (see Endnotes for
    SOX ACT provisions) in this Administrative Process including but not limited to the
    Respondent Company’s Position Statement filed with the Courts June 23, 2006. The
    Complainant is requesting an investigation into this Obstruction of Justice allegation
    and continued retaliation as the Complainant has evidence in support of these
    allegations. Additionally, this is viewed as a discrimination of a continuing nature in
    CASE NO: 2006-SOX-0072 due to perceived retaliatory concerns and potential of
    obstructing justice. The adverse actions suffered in this case are undue emotional
    distress which is further complicating Complainant’s Meniere’s disease symptoms
    and recovery, loss in wages and benefits (both current and future), defaming
    reputation/character, restricting social status within business community and
    accounting profession, and other such irreparable harms.

4
  Recent Supreme Court case ruling On June 22, the Supreme Court issued an important decision
interpreting Title VII of the Civil Rights Act of 1964, a key federal antidiscrimination statute. Title VII
bans not only discrimination on the basis of protected characteristics like race and sex, but also retaliation
against those who assert their rights against discrimination. In the case of Burlington Northern & Santa Fe
Railway Company, the Supreme Court including Justice Breyer, took the broader view as well, holding
that the "scope of the anti-retaliation provision extends beyond workplace-related or employment-related
retaliatory acts and harm." This broad protection, the Court explained, would help "assure the cooperation
upon which accomplishment of the Act's primary objective [to prevent employment discrimination]
depends." Employees who fear non-workplace-retaliation are just as unlikely to complain or cooperate with
an internal investigation as employees who fear workplace retaliation. The retaliation provision, thus, must
be broad enough to provide employees with meaningful protection. This would broadly apply to
discrimination cases such as Whistleblower retaliation.

5
  Interrogatory Number 13- Complainants Answer: “No whistleblower lawsuit has been filed under statute,
in which I was a party to the proceeding, and the only relevant matter relating to the Administrative
Proceeding.

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      ENDNOTES- SOX ACT 2002 KEY REFERENCES (not all-inclusive)


TITLE I—PUBLIC COMPANY ACCOUNTING OVERSIGHT BOARD

SEC. 105. INVESTIGATIONS AND DISCIPLINARY PROCEEDINGS.
116 STAT. 760 PUBLIC LAW 107–204—JULY 30, 2002
(2) TESTIMONY AND DOCUMENT PRODUCTION.—In addition
to such other actions as the Board determines to be necessary
or appropriate, the rules of the Board may—
(A) require the testimony of the firm or of any person
associated with a registered public accounting firm, with
respect to any matter that the Board considers relevant
or material to an investigation;
(B) require the production of audit work papers and
any other document or information in the possession of
a registered public accounting firm or any associated person
thereof, wherever domiciled, that the Board considers relevant
or material to the investigation, and may inspect
the books and records of such firm or associated person
to verify the accuracy of any documents or information
supplied;
(C) request the testimony of, and production of any
document in the possession of, any other person, including
any client of a registered public accounting firm that the
Board considers relevant or material to an investigation
under this section, with appropriate notice, subject to the
needs of the investigation, as permitted under the rules
of the Board; and
(D) provide for procedures to seek issuance by the
Commission, in a manner established by the Commission,
of a subpoena to require the testimony of, and production
of any document in the possession of, any person, including
any client of a registered public accounting firm, that the
Board considers relevant or material to an investigation
under this section.
(3) NONCOOPERATION WITH INVESTIGATIONS.—
(A) IN GENERAL.—If a registered public accounting firm
or any associated person thereof refuses to testify, produce
documents, or otherwise cooperate with the Board in
connection with an investigation under this section, the
Board may—
(i) suspend or bar such person from being associated
with a registered public accounting firm, or
require the registered public accounting firm to end
such association;
(ii) suspend or revoke the registration of the public
accounting firm; and

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(iii) invoke such other lesser sanctions as the Board
considers appropriate, and as specified by rule of the
Board.
(B) PROCEDURE.—Any action taken by the Board under
this paragraph shall be subject to the terms of section
107(c).
(4) COORDINATION AND REFERRAL OF INVESTIGATIONS.—
(A) COORDINATION.—The Board shall notify the
Commission of any pending Board investigation involving
a potential violation of the securities laws, and thereafter
coordinate its work with the work of the Commission’s
Division of Enforcement, as necessary to protect an ongoing
Commission investigation.

TITLE III—CORPORATE RESPONSIBILITY

SEC. 301. PUBLIC COMPANY AUDIT COMMITTEES.
Section 10A of the Securities Exchange Act of 1934 (15 U.S.C.
78f) is amended by adding at the end the following:
‘‘(m) STANDARDS RELATING TO AUDIT COMMITTEES.—
‘‘(1) COMMISSION RULES.—
15 USC 78j–1.
15 USC 7234.
Deadline.
15 USC 7233.
Deadline.
15 USC 7232.
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116 STAT. 776 PUBLIC LAW 107–204—JULY 30, 2002
‘‘(A) IN GENERAL.—Effective not later than 270 days
after the date of enactment of this subsection, the Commission
shall, by rule, direct the national securities exchanges
and national securities associations to prohibit the listing
of any security of an issuer that is not in compliance
with the requirements of any portion of paragraphs (2)
through (6).
‘‘(B) OPPORTUNITY TO CURE DEFECTS.—The rules of the
Commission under subparagraph (A) shall provide for
appropriate procedures for an issuer to have an opportunity
to cure any defects that would be the basis for a prohibition
under subparagraph (A), before the imposition of such
prohibition.
‘‘(2) RESPONSIBILITIES RELATING TO REGISTERED PUBLIC
ACCOUNTING FIRMS.—The audit committee of each issuer, in
its capacity as a committee of the board of directors, shall
be directly responsible for the appointment, compensation, and
oversight of the work of any registered public accounting firm

                                      9
employed by that issuer (including resolution of disagreements
between management and the auditor regarding financial
reporting) for the purpose of preparing or issuing an audit
report or related work, and each such registered public
accounting firm shall report directly to the audit committee.
‘‘(3) INDEPENDENCE.—
‘‘(A) IN GENERAL.—Each member of the audit committee
of the issuer shall be a member of the board of
directors of the issuer, and shall otherwise be independent.
‘‘(B) CRITERIA.—In order to be considered to be independent
for purposes of this paragraph, a member of an
audit committee of an issuer may not, other than in his
or her capacity as a member of the audit committee, the
board of directors, or any other board committee—
‘‘(i) accept any consulting, advisory, or other
compensatory fee from the issuer; or
‘‘(ii) be an affiliated person of the issuer or any
subsidiary thereof.
‘‘(C) EXEMPTION AUTHORITY.—The Commission may
exempt from the requirements of subparagraph (B) a particular
relationship with respect to audit committee members,
as the Commission determines appropriate in light
of the circumstances.
‘‘(4) COMPLAINTS.—Each audit committee shall establish
procedures for—
‘‘(A) the receipt, retention, and treatment of complaints
received by the issuer regarding accounting, internal
accounting controls, or auditing matters; and
‘‘(B) the confidential, anonymous submission by
employees of the issuer of concerns regarding questionable
accounting or auditing matters.
‘‘(5) AUTHORITY TO ENGAGE ADVISERS.—Each audit committee
shall have the authority to engage independent counsel
and other advisers, as it determines necessary to carry out
its duties.
‘‘(6) FUNDING.—Each issuer shall provide for appropriate
funding, as determined by the audit committee, in its capacity
as a committee of the board of directors, for payment of
compensation—
Deadline.
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PUBLIC LAW 107–204—JULY 30, 2002 116 STAT. 777
‘‘(A) to the registered public accounting firm employed
by the issuer for the purpose of rendering or issuing an
audit report; and
‘‘(B) to any advisers employed by the audit committee
under paragraph (5).’’.

                                      10
SEC. 307. RULES OF PROFESSIONAL RESPONSIBILITY FOR ATTORNEYS.
Not later than 180 days after the date of enactment of this
Act, the Commission shall issue rules, in the public interest and
for the protection of investors, setting forth minimum standards
of professional conduct for attorneys appearing and practicing before
the Commission in any way in the representation of issuers,
including a rule—
(1) requiring an attorney to report evidence of a material
violation of securities law or breach of fiduciary duty or similar
violation by the company or any agent thereof, to the chief
legal counsel or the chief executive officer of the company
(or the equivalent thereof); and
(2) if the counsel or officer does not appropriately respond
to the evidence (adopting, as necessary, appropriate remedial
measures or sanctions with respect to the violation), requiring
the attorney to report the evidence to the audit committee
of the board of directors of the issuer or to another committee
of the board of directors comprised solely of directors not
employed directly or indirectly by the issuer, or to the board
of directors.

TITLE VIII—CORPORATE AND CRIMINAL FRAUD ACCOUNTABILITY

SEC. 801. SHORT TITLE.
This title may be cited as the ‘‘Corporate and Criminal Fraud
Accountability Act of 2002’’.
SEC. 802. CRIMINAL PENALTIES FOR ALTERING DOCUMENTS.
(a) IN GENERAL.—Chapter 73 of title 18, United States Code,
is amended by adding at the end the following:
‘‘§ 1519. Destruction, alteration, or falsification of records
in Federal investigations and bankruptcy
‘‘Whoever knowingly alters, destroys, mutilates, conceals, covers
up, falsifies, or makes a false entry in any record, document, or
tangible object with the intent to impede, obstruct, or influence
the investigation or proper administration of any matter within
the jurisdiction of any department or agency of the United States
or any case filed under title 11, or in relation to or contemplation
of any such matter or case, shall be fined under this title, imprisoned
not more than 20 years, or both.
‘‘§ 1520. Destruction of corporate audit records
‘‘(a)(1) Any accountant who conducts an audit of an issuer
of securities to which section 10A(a) of the Securities Exchange
Act of 1934 (15 U.S.C. 78j–1(a)) applies, shall maintain all audit
or review workpapers for a period of 5 years from the end of
the fiscal period in which the audit or review was concluded.
‘‘(2) The Securities and Exchange Commission shall promulgate,

                                        11
within 180 days, after adequate notice and an opportunity for
comment, such rules and regulations, as are reasonably necessary,
relating to the retention of relevant records such as workpapers,
documents that form the basis of an audit or review, memoranda,
correspondence, communications, other documents, and records
(including electronic records) which are created, sent, or received
in connection with an audit or review and contain conclusions,
opinions, analyses, or financial data relating to such an audit or
review, which is conducted by any accountant who conducts an
audit of an issuer of securities to which section 10A(a) of the
Securities Exchange Act of 1934 (15 U.S.C. 78j–1(a)) applies. The
Commission may, from time to time, amend or supplement the
rules and regulations that it is required to promulgate under this
section, after adequate notice and an opportunity for comment,
in order to ensure that such rules and regulations adequately
comport with the purposes of this section.
‘‘(b) Whoever knowingly and willfully violates subsection (a)(1),
or any rule or regulation promulgated by the Securities and
Exchange Commission under subsection (a)(2), shall be fined under
this title, imprisoned not more than 10 years, or both.
‘‘(c) Nothing in this section shall be deemed to diminish or
relieve any person of any other duty or obligation imposed by
Federal or State law or regulation to maintain, or refrain from
destroying, any document.’’.
Regulations.
18 USC 1501
note.
Corporate and
Criminal Fraud
Accountability
Act of 2002.
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PUBLIC LAW 107–204—JULY 30, 2002 116 STAT. 801
(b) CLERICAL AMENDMENT.—The table of sections at the beginning
of chapter 73 of title 18, United States Code, is amended
by adding at the end the following new items:
‘‘1519. Destruction, alteration, or falsification of records in Federal investigations
and bankruptcy.
‘‘1520. Destruction of corporate audit records.’’.

116 STAT. 802 PUBLIC LAW 107–204—JULY 30, 2002
SEC. 805. REVIEW OF FEDERAL SENTENCING GUIDELINES FOR
OBSTRUCTION OF JUSTICE AND EXTENSIVE CRIMINAL
FRAUD.
(a) ENHANCEMENT OF FRAUD AND OBSTRUCTION OF JUSTICE
SENTENCES.—Pursuant to section 994 of title 28, United States
Code, and in accordance with this section, the United States Sentencing

                                          12
Commission shall review and amend, as appropriate, the
Federal Sentencing Guidelines and related policy statements to
ensure that—
(1) the base offense level and existing enhancements contained
in United States Sentencing Guideline 2J1.2 relating
to obstruction of justice are sufficient to deter and punish
that activity;
(2) the enhancements and specific offense characteristics
relating to obstruction of justice are adequate in cases where—
(A) the destruction, alteration, or fabrication of evidence
involves—
(i) a large amount of evidence, a large number
of participants, or is otherwise extensive;
(ii) the selection of evidence that is particularly
probative or essential to the investigation; or
(iii) more than minimal planning; or
(B) the offense involved abuse of a special skill or
a position of trust;
(3) the guideline offense levels and enhancements for violations
of section 1519 or 1520 of title 18, United States Code,
as added by this title, are sufficient to deter and punish that
activity;
(4) a specific offense characteristic enhancing sentencing
is provided under United States Sentencing Guideline 2B1.1
(as in effect on the date of enactment of this Act) for a fraud
offense that endangers the solvency or financial security of
a substantial number of victims; and
(5) the guidelines that apply to organizations in United
States Sentencing Guidelines, chapter 8, are sufficient to deter
and punish organizational criminal misconduct.
(b) EMERGENCY AUTHORITY AND DEADLINE FOR COMMISSION
ACTION.—The United States Sentencing Commission is requested
to promulgate the guidelines or amendments provided for under
this section as soon as practicable, and in any event not later
than 180 days after the date of enactment of this Act, in accordance
with the prcedures set forth in section 219(a) of the Sentencing
Reform Act of 1987, as though the authority under that Act had
not expired.
SEC. 806. PROTECTION FOR EMPLOYEES OF PUBLICLY TRADED
COMPANIES WHO PROVIDE EVIDENCE OF FRAUD.
(a) IN GENERAL.—Chapter 73 of title 18, United States Code,
is amended by inserting after section 1514 the following:
‘‘§ 1514A. Civil action to protect against retaliation in fraud
cases
‘‘(a) WHISTLEBLOWER PROTECTION FOR EMPLOYEES OF PUBLICLY
TRADED COMPANIES.—No company with a class of securities registered
under section 12 of the Securities Exchange Act of 1934
(15 U.S.C. 78l), or that is required to file reports under section

                                     13
15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78o(d)),
Deadline.
28 USC 994 note.
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PUBLIC LAW 107–204—JULY 30, 2002 116 STAT. 803
or any officer, employee, contractor, subcontractor, or agent of such
company, may discharge, demote, suspend, threaten, harass, or
in any other manner discriminate against an employee in the terms
and conditions of employment because of any lawful act done by
the employee—
‘‘(1) to provide information, cause information to be provided,
or otherwise assist in an investigation regarding any
conduct which the employee reasonably believes constitutes
a violation of section 1341, 1343, 1344, or 1348, any rule or
regulation of the Securities and Exchange Commission, or any
provision of Federal law relating to fraud against shareholders,
when the information or assistance is provided to or the investigation
is conducted by—
‘‘(A) a Federal regulatory or law enforcement agency;
‘‘(B) any Member of Congress or any committee of
Congress; or
‘‘(C) a person with supervisory authority over the
employee (or such other person working for the employer
who has the authority to investigate, discover, or terminate
misconduct); or
‘‘(2) to file, cause to be filed, testify, participate in, or
otherwise assist in a proceeding filed or about to be filed
(with any knowledge of the employer) relating to an alleged
violation of section 1341, 1343, 1344, or 1348, any rule or
regulation of the Securities and Exchange Commission, or any
provision of Federal law relating to fraud against shareholders.
‘‘(b) ENFORCEMENT ACTION.—
‘‘(1) IN GENERAL.—A person who alleges discharge or other
discrimination by any person in violation of subsection (a) may
seek relief under subsection (c), by—
‘‘(A) filing a complaint with the Secretary of Labor;
or
‘‘(B) if the Secretary has not issued a final decision
within 180 days of the filing of the complaint and there
is no showing that such delay is due to the bad faith
of the claimant, bringing an action at law or equity for
de novo review in the appropriate district court of the
United States, which shall have jurisdiction over such an
action without regard to the amount in controversy.
‘‘(2) PROCEDURE.—
‘‘(A) IN GENERAL.—An action under paragraph (1)(A)
shall be governed under the rules and procedures set forth

                                      14
in section 42121(b) of title 49, United States Code.
‘‘(B) EXCEPTION.—Notification made under section
42121(b)(1) of title 49, United States Code, shall be made
to the person named in the complaint and to the employer.
‘‘(C) BURDENS OF PROOF.—An action brought under
paragraph (1)(B) shall be governed by the legal burdens
of proof set forth in section 42121(b) of title 49, United
States Code.
‘‘(D) STATUTE OF LIMITATIONS.—An action under paragraph
(1) shall be commenced not later than 90 days after
the date on which the violation occurs.
‘‘(c) REMEDIES.—
‘‘(1) IN GENERAL.—An employee prevailing in any action
under subsection (b)(1) shall be entitled to all relief necessary
to make the employee whole.
Deadline.
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116 STAT. 804 PUBLIC LAW 107–204—JULY 30, 2002
‘‘(2) COMPENSATORY DAMAGES.—Relief for any action under
paragraph (1) shall include—
‘‘(A) reinstatement with the same seniority status that
the employee would have had, but for the discrimination;
‘‘(B) the amount of back pay, with interest; and
‘‘(C) compensation for any special damages sustained
as a result of the discrimination, including litigation costs,
expert witness fees, and reasonable attorney fees.
‘‘(d) RIGHTS RETAINED BY EMPLOYEE.—Nothing in this section
shall be deemed to diminish the rights, privileges, or remedies
of any employee under any Federal or State law, or under any
collective bargaining agreement.’’.
(b) CLERICAL AMENDMENT.—The table of sections at the beginning
of chapter 73 of title 18, United States Code, is amended
by inserting after the item relating to section 1514 the following
new item:
‘‘1514A. Civil action to protect against retaliation in fraud cases.’’.



TITLE XI—CORPORATE FRAUD ACCOUNTABILITY

SEC. 1101. SHORT TITLE.
This title may be cited as the ‘‘Corporate Fraud Accountability
Act of 2002’’.
SEC. 1102. TAMPERING WITH A RECORD OR OTHERWISE IMPEDING
AN OFFICIAL PROCEEDING.
Section 1512 of title 18, United States Code, is amended—
(1) by redesignating subsections (c) through (i) as subsections

                                      15
(d) through (j), respectively; and
(2) by inserting after subsection (b) the following new subsection:
‘‘(c) Whoever corruptly—
‘‘(1) alters, destroys, mutilates, or conceals a record, document,
or other object, or attempts to do so, with the intent
to impair the object’s integrity or availability for use in an
official proceeding; or
‘‘(2) otherwise obstructs, influences, or impedes any official
proceeding, or attempts to do so,
shall be fined under this title or imprisoned not more than 20
years, or both.’’.
SEC. 1107. RETALIATION AGAINST INFORMANTS.
(a) IN GENERAL.—Section 1513 of title 18, United States Code,
is amended by adding at the end the following:
‘‘(e) Whoever knowingly, with the intent to retaliate, takes
any action harmful to any person, including interference with the
lawful employment or livelihood of any person, for providing to
a law enforcement officer any truthful information relating to the
commission or possible commission of any Federal offense, shall
be fined under this title or imprisoned not more than 10 years,
or both.’’.




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