Canada Crafting Post-Enron Corporate Penalties

OTTAWA -- - Canadian Justice Minister Martin Cauchon said he was working with cabinet colleagues on strengthening the law on corporate fraud to try to avoid an Enron-style disaster.

"We have gone to the US and England to talk to their experts. We have concluded that we need to strengthen our capacity to investigate and prosecute major corporate frauds and to make the penalties for such behavior a real deterrent," Cauchon said in a speech in Toronto. "I am working with my colleagues -- the ministers of finance, industry, and the solicitor general -- on proposals to strengthen the law on corporate fraud and to introduce tougher penalties." He said it could mean changes to the current Criminal Code or an entirely new law. "But either way, our message is clear: we as a society must protect the integrity of our markets and our investors, whether they have invested thousands or millions of dollars," he added in the speech, the text of which was made available in Ottawa. The collapse of energy trader Enron Corp. and accounting scandals at WorldCom Inc. and other companies roiled US and other stock markets. "That is not part of the Canada we want," Cauchon said. Last summer, the U.S. Congress enacted the Sarbanes-Oxley legislation, a sweeping corporate governance law that imposes restrictions on the consulting services of auditors, sets up a new accounting oversight board and imposes tougher penalties for fraud.

"I am working with my colleagues -- the ministers of finance, industry, and the solicitor general -- on proposals to strengthen the law on corporate fraud and to introduce tougher penalties."

He said it could mean changes to the current Criminal Code or an entirely new law.

"But either way, our message is clear: we as a society must protect the integrity of our markets and our investors, whether they have invested thousands or millions of dollars," he added in the speech, the text of which was made available in Ottawa.

The collapse of energy trader Enron Corp. and accounting scandals at WorldCom Inc. and other companies roiled US and other stock markets.

"That is not part of the Canada we want," Cauchon said.

Last summer, the U.S. Congress enacted the Sarbanes-Oxley legislation, a sweeping corporate governance law that imposes restrictions on the consulting services of auditors, sets up a new accounting oversight board and imposes tougher penalties for fraud.