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Failing to Certify Corporate Financial Reports

Federal law requires public corporations to keep extensive and accurate records of their financial dealings. Companies that fail to fulfill these requirements can be forced to pay fines of up to $1,000,000 and corporate officers could be sentenced to up to ten years in prison. Unfortunately, many innocent business owners or employees are accused of violating federal law even when those individuals never had the intent to defraud the government. For this reason, it is critical that those who are being investigated for fraud, speak with a white collar crime lawyer as soon as possible who can begin working on their defense.

Financial Reports

According to federal law, public corporations that issue securities are required to submit periodic reports containing financial statements. These records must also be accompanied by a written statement from the issuer’s CEO and CFO attesting that:

  • They have reviewed the report;
  • To their knowledge, the report doesn’t contain any untrue statements or omit a material fact in an attempt to mislead; and
  • The financial statements, including data and any management discussion and analysis of operations fairly represent the financial condition, results of operations, and cash flow.

Corporate officers must also certify that:

  • The periodic report fully complies with federal law; and
  • The information contained in the report fairly presents the financial condition and results of the company.


In addition to certifying the accuracy of the data in the financial report, corporate officers are also responsible for:

  • Establishing disclosure controls that are designed to ensure that information required for the reports is recorded, processed, summarized, and reported accurately and in a timely manner;
  • Attesting in the quarterly report that they have designed such controls and have evaluated their effectiveness within the past 90 days; and
  • Certifying that they have presented their conclusions about the program’s effectiveness in the report.

The CFO and CEO must also disclose any deficiencies in the company’s internal controls to its auditors and report any fraudulent activity that involves management.

Possible Penalties

Failing to comply with these requirements can have serious consequences, as even providing a written statement indicating that the financial reports are accurate, while knowing that the reports do not comport with federal law is punishable by a $1,000,000 fine and a ten year prison sentence. Certifying that a report itself is correct, while knowing that it does not satisfy federal requirements is penalized even more severely, with a $5,000,000 fine and imprisonment for up to 20 years. These types of charges are also often accompanied by accusations of other fraudulent activities, which can add to a person’s sentence. However, it’s important to keep in mind that before a corporate officer can be convicted under this statute, prosecutors must be able to establish that the defendant knew that the statement or financial report was inaccurate at the time of the certification.

Speak with a Miami White Collar Crime Attorney About Your Case Today

To schedule a free consultation with an experienced white collar crime attorney, please call Jeffrey S. Weiner, P.A. Criminal Defense Attorneys at (305) 670-9919 today. Our Miami legal team is eager to assist you immediately.


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