Truth in Settlements Act Pushes for Fraud Disclosures.

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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