Governor Taft signs corporate and securities reform bill.

Gov. Bob Taft has signed HB 7, Ohio's answer to Sarbanes-Oxley. The new law, sponsored by State Rep. Mary Taylor, CPA (R-Green), provides reforms for smaller companies that register securities with the Ohio Department of Commerce, and represents an even-handed, responsible approach to corporate accountability. Upon enactment, HB 7 will:

* Require corporate representatives to certify financial records, when making registration filings with the Division.

* Establish limits on, and require disclosures of, loans to company insiders, when making registration filings with the division.

* Prohibit improper influence on accountants who prepare or audit financial statements to be used in connection with the purchase or sale of securities in Ohio.

* Prohibit the Division from accepting the registration of securities for companies that have no business plan (known as "blank check offerings").

* Clarify that an investment opportunity need not be in writing to constitute a "security."

* Empower the Division to ask a court to order the subject of an injunctive action to make restitution or offer rescission to victimized investors.

* Increase penalties for white-collar crimes, including upgrading the theft of $1 million or more from a third degree felony to a first degree felony.

* Lengthen the statute of limitations for both civil and enforcement actions to those outlined in the Sarbanes-Oxley law.

The Ohio Society of CPAs worked closely with Rep. Taylor and the Taft administration to ensure a rational response to corporate fraud and successfully advocated for passage of this legislation. For an analysis of HB 7, or for more information, contact Barbara Benton at [e-mail].

This news item also ran in the Ohio e-CPA Weekly on June 25.