PCAOB Enforcement Transparency Act of 2025

Mr. President, the Public Company Accounting Oversight Board PCAOB Enforcement Transparency Act, which I am reintroducing today with Senator Grassley, will bring needed transparency to the disciplinary proceedings the PCAOB has brought against auditors and audit firms.

Over two decades ago, in response to a series of massive financial reporting frauds particularly the Enron and WorldCom scandals, the Senate Banking Committee held multiple hearings, which found various underlying causes, including weak corporate governance, a lack of accountability, and inadequate oversight of accountants charged with auditing public companies' financial statements. Later, in a 99-to-0 vote, the Senate passed the Sarbanes-Oxley Act of 2002 to address the structural weaknesses revealed by the hearings. Among its many provisions, this law called for the creation of an independent Board, the PCAOB, to oversee auditors of public companies in order to protect investors who rely on independent audit reports on the financial statements of public companies.

Under the oversight of the U.S. Securities and Exchange Commission, SEC, the PCAOB oversees nearly 1,500 registered accounting firms, as well as the audit partners and staff who contribute to a firm's work on each audit. The Board's ability to begin proceedings that can determine whether there have been violations of its auditing standards or rules of professional practice is a crucial component of its oversight. However, unlike other oversight bodies, the Board's disciplinary proceedings cannot be made public without consent from the parties involved. Of course, parties subject to disciplinary proceedings have no incentive to consent to publicizing their alleged wrongdoing, and these proceedings are typically kept hidden from the public. Furthermore, the Board cannot publicize the results of its disciplinary proceedings until after the appeals process has been completely exhausted, which can often take several years.

This lack of transparency invites abuse and undermines the congressional intent behind the PCAOB, which was to shine a bright light on auditing firms and practices, deter misconduct, and bolster the accountability of auditors of public companies to the investing public.

Our bill will restore transparency and reaffirm Congress's intent, by making hearings by the PCAOB, and all related notices, orders, and motions, transparent and available to the public unless otherwise ordered by the Board. This would more closely align the PCAOB's procedures with those of the SEC for analogous matters.

Increasing transparency and accountability of audit firms subject to PCAOB disciplinary proceedings strengthens investor confidence in our financial markets and better protects companies from problematic auditors. I urge our colleagues to join Senator Grassley and me in supporting this legislation to enhance transparency in the PCAOB's enforcement process.

Mr. President, today, I am introducing the Stronger Enforcement of Civil Penalties Act along with Senator Grassley. Our bipartisan bill will help securities regulators better protect investors and demand greater accountability from market players. Despite the regulatory reforms made after the financial crisis, we continue to see calculated wrongdoing by some on Wall Street, and without the consequence of meaningful penalties to serve as an effective deterrent, I worry this disturbing culture of misconduct will persist.

The amount of penalties the Securities and Exchange Commission SEC can fine an institution or individual is restricted by statute. I learned how this limitation significantly interferes with the SEC's ability to execute its enforcement duties during my time as the chairman of the Banking Committee's Securities, Insurance, and Investment Subcommittee in 2011. Around then, a Federal judge criticized the SEC for not pursuing a larger settlement against Citigroup, a major actor in the financial crisis. The judge rightly noted that Citigroup had settled with the Agency for an amount that was far below the cost the bank had inflicted on investors. The SEC, however, indicated that a statutory prohibition against levying a larger penalty led to the low settlement amount. Indeed, in the immediate aftermath of the financial crisis, then-SEC Chairman Mary Schapiro explained that ``the Commission's statutory authority to obtain civil monetary penalties with appropriate deterrent effect is limited in many circumstances.'' Unfortunately, a decade later, the SEC's statutory authority remains unchanged, and the Agency's deterrent effect remains limited even though securities fraud is still as prevalent as ever.

The bipartisan bill we are introducing will discourage misconduct by raising the maximum statutory civil monetary penalties, directly linking the size of the penalties to the amount of losses suffered by victims of a violation, and substantially increasing the financial stakes for serial offenders of our Nation's securities laws.

Specifically, our bill would broaden the SEC's options to tailor penalties to the circumstances of a given violation. In addition to raising the per violation caps for severe, or ``thirds tier,'' violations to $1 million per offense for individuals and $10 million per offense for entities, the legislation would also give the SEC more options to collect greater penalties based on the ill-gotten gains of the violator or on the financial harm to investors.

Our bill also has two provisions to deter repeat offenders on Wall Street. The first would authorize the SEC to triple the penalty cap applicable to recidivists who have been held either criminally or civilly liable for securities fraud within the previous 5 years. The second would allow the SEC to seek a civil penalty against those who violate existing Federal court or SEC orders--an approach that would be more efficient, effective, and flexible than the current civil contempt remedy. These updates would reinforce the

SEC's ability to levy tough penalties against repeat offenders.

Our constituents deserve a strong regulator that has the necessary tools to go after fraudsters and pursue the difficult cases arising from our increasingly complex financial markets. The Stronger Enforcement of Civil Penalties Act will enhance the SEC's ability to demand meaningful accountability from Wall Street, which in turn will increase transparency, deter bad actor, and maintain confidence in our financial system. I urge our colleagues to support this important bipartisan legislation.

Mr. President, the Public Company Accounting Oversight Board PCAOB Enforcement Transparency Act, which I am reintroducing today with Senator Grassley, will bring needed transparency to the disciplinary proceedings the PCAOB has brought against auditors and audit firms.

Over two decades ago, in response to a series of massive financial reporting frauds particularly the Enron and WorldCom scandals, the Senate Banking Committee held multiple hearings, which found various underlying causes, including weak corporate governance, a lack of accountability, and inadequate oversight of accountants charged with auditing public companies' financial statements. Later, in a 99-to-0 vote, the Senate passed the Sarbanes-Oxley Act of 2002 to address the structural weaknesses revealed by the hearings. Among its many provisions, this law called for the creation of an independent Board, the PCAOB, to oversee auditors of public companies in order to protect investors who rely on independent audit reports on the financial statements of public companies.

Under the oversight of the U.S. Securities and Exchange Commission, SEC, the PCAOB oversees nearly 1,500 registered accounting firms, as well as the audit partners and staff who contribute to a firm's work on each audit. The Board's ability to begin proceedings that can determine whether there have been violations of its auditing standards or rules of professional practice is a crucial component of its oversight. However, unlike other oversight bodies, the Board's disciplinary proceedings cannot be made public without consent from the parties involved. Of course, parties subject to disciplinary proceedings have no incentive to consent to publicizing their alleged wrongdoing, and these proceedings are typically kept hidden from the public. Furthermore, the Board cannot publicize the results of its disciplinary proceedings until after the appeals process has been completely exhausted, which can often take several years.

This lack of transparency invites abuse and undermines the congressional intent behind the PCAOB, which was to shine a bright light on auditing firms and practices, deter misconduct, and bolster the accountability of auditors of public companies to the investing public.

Our bill will restore transparency and reaffirm Congress's intent, by making hearings by the PCAOB, and all related notices, orders, and motions, transparent and available to the public unless otherwise ordered by the Board. This would more closely align the PCAOB's procedures with those of the SEC for analogous matters.

Increasing transparency and accountability of audit firms subject to PCAOB disciplinary proceedings strengthens investor confidence in our financial markets and better protects companies from problematic auditors. I urge our colleagues to join Senator Grassley and me in supporting this legislation to enhance transparency in the PCAOB's enforcement process.

Mr. President, I rise to speak in support of the HOV Lane Exemption Reauthorization Act, which I introduced today.

The HOV toll lane authority for alternative fuel vehicles, in place since 1998, gives States the ability to allow alternative fuel and low- emission vehicles to use high-occupancy vehicle lanes. This authority provides flexibility for State departments of transportation to manage congestion, encourage cleaner cars on the road, and give drivers more options. It is now in use in more than 10 states, including California, Utah, and New York, and has been renewed on a bipartisan basis in each subsequent surface transportation reauthorization bill.

However, due to a drafting error in the Infrastructure Investment and Jobs Act, the extension expires in September 2025 rather than September 2026 as originally intended. Without congressional action, these programs lapse at the end of this month, creating uncertainty for motorists, consumers, and State transportation officials. It also deprives States of the ability to make their own choices about how best to manage HOV lane access in ways that fit their unique transportation needs.

Our bipartisan bill corrects this oversight and extends the authority through the next fiscal year. This is not a sweeping change or a new mandate; it is a straghtforward, commonsense fix that ensures States can continue a longstanding program that encourages the adoption of low-emission and alternative fuel vehicles and helps ease congestion on our busiest roads. By extending the program, we provide clarity for drivers, predictability for States, and continuity for a policy with bipartisan support.

I want to thank Senator Curtis and Senator Gillibrand for co-leading this bill with me, and I urge our colleagues to join us in ensuring that States like ours are not unfairly penalized for a simple Federal oversight.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.