10 July 2002

Bush: A New Ethic of Corporate Responsibility

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President George W. Bush took his battle to restore faith in corporate America to Wall Street on Tuesday, delivering a scathing attack on the recent wave of financial malfeasance to an audience of American business leaders, the FT reports.

The German Handelsblatt is less enthusiastic. The Crux lies in Bush’s commitment to the SEC, as many experts argue.

Mr Bush proposed doubling to 10 years the maximum jail sentence that business executives can serve for fraud. He also issued an executive order setting up a corporate fraud taskforce, based at the Justice Department, which would co-ordinate and oversee all investigations into business wrongdoing.

The new penalties and criminal taskforce were at the centre of Mr Bush's new proposals, his first since introducing a 10-point plan on corporate governance in March. The taskforce, which will be headed Larry Thompson, the number two man at the Department of Justice will 'function as a financial crime SWAT team', Mr Bush said.

The president also criticised equity analysts at investment banks, calling some of their behaviour 'clear conflicts of interest', and audit failures. Auditors should not be 'compromised by conflicts of interest' and analysts should be 'trusted advisers not salesmen with their own agenda

Bush speech: A New Ethic of Corporate Responsibility
FT: Bush to double jail terms for corporate fraud
HB: Bush-Rede: Phrasen statt Pläne

© Graham Bishop