Truth in Settlements Act Pushes for Fraud Disclosures.

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Senators Elizabeth Warren and James Lankford have introduced the Truth in Settlements Act into Congress. The legislation requires companies and federal agencies to disclose additional information about settlements exceeding $1 million.

It is aimed at giving the American public a better idea of the costs businesses are paying for corporate wrongdoing and whether our regulators are effectively punishing these companies. A summary on Senator Warren’s website highlights a number of aspects of the legislation, including:

  • Federal agencies would have to explain the classification of settlement payments for tax purposes and credits for routine conduct.
  • Companies would have to disclose tax deductions from settlement payments in SEC filings.
  • Requires copies of settlements to be posted online as well as key details disclosed.
  • Explanations for confidential settlements and aggregate annual statistics on those settlements.
  • Commissions a GAO study on handling confidential settlements.

These summaries were pulled from what I imagine is the version of the legislation introduced into Congress last year.  If you agree that greater information about settlements entered into between companies and the Federal Government is a good idea, please write to your Congressional representatives!

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