Assembly Bill No. 10–Committee of the Whole

 

July 21, 2003

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Declared an Emergency Measure

 

SUMMARY—Makes various changes to provisions concerning financial practices. (BDR 7‑24)

 

FISCAL NOTE:                   Effect on Local Government: No.

                   Effect on the State: Yes.

 

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EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

 

AN ACT relating to financial practices; providing a penalty for a person who willfully offers into evidence as genuine certain fraudulent records or who willfully destroys or alters certain records under certain circumstances; increasing the penalty for certain securities violations; extending the civil and criminal statutes of limitations for certain securities violations; excluding the performance of certain internal audits pertaining to certain gaming licensees by certain independent accountants; and providing other matters properly relating thereto.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

 

1-1  Section 1. Chapter 90 of NRS is hereby amended by adding

1-2  thereto a new section to read as follows:

1-3  In any investigation, proceeding or prosecution with respect to

1-4  any violation of a provision of this chapter, a regulation adopted

1-5  pursuant to this chapter, an order denying, suspending or

1-6  revoking the effectiveness of registration or an order to cease and

1-7  desist issued by the Administrator, a person shall not willfully:

1-8  1.  Offer or procure to be offered into evidence, as genuine,

1-9  any book, paper, document or record if the person knows that the

1-10  book, paper, document or record has been forged or fraudulently

1-11  altered; or

2-1  2.  Destroy, alter, erase, obliterate or conceal, or cause to be

2-2  destroyed, altered, erased, obliterated or concealed, any book,

2-3  paper, document or record, including, without limitation, any

2-4  electronic record, with the intent to:

2-5  (a) Conceal any violation of any provision of this chapter, a

2-6  regulation adopted pursuant to this chapter, an order denying,

2-7  suspending or revoking the effectiveness of registration or an

2-8  order to cease and desist issued by the Administrator;

2-9  (b) Protect or conceal the identity of any person who has

2-10  violated any provision of this chapter, a regulation adopted

2-11  pursuant to this chapter, an order denying, suspending or

2-12  revoking the effectiveness of registration or an order to cease and

2-13  desist issued by the Administrator; or

2-14      (c) Delay or hinder the investigation or prosecution of any

2-15  person for any violation of any provision of this chapter, a

2-16  regulation adopted pursuant to this chapter, an order denying,

2-17  suspending or revoking the effectiveness of registration or an

2-18  order to cease and desist issued by the Administrator.

2-19      Sec. 2.  NRS 90.650 is hereby amended to read as follows:

2-20      90.650  1.  A person who willfully violates:

2-21      (a) A provision of this chapter, except NRS 90.600, or who

2-22  violates NRS 90.600 knowing that the statement made is false or

2-23  misleading in any material respect;

2-24      (b) A regulation adopted pursuant to this chapter; or

2-25      (c) An order denying, suspending or revoking the effectiveness

2-26  of registration or an order to cease and desist issued by the

2-27  Administrator pursuant to thischapter,

2-28  is guilty of a category [C] B felony and shall be punished [as

2-29  provided in NRS 193.130,] by imprisonment in the state prison for

2-30  a minimum term of not less than 1 year and a maximum term of

2-31  not more than 20 years, or by a fine of not more than [$100,000,]

2-32  $500,000, or by both fine and [the punishment provided in NRS

2-33  193.130,] imprisonment, for each violation. In addition to any other

2-34  penalty, the court shall order the person to pay restitution.

2-35      2.  A person convicted of violating a regulation or order under

2-36  this chapter may be fined, but must not be imprisoned, if the person

2-37  proves lack of knowledge of the regulation or order.

2-38      3.  This chapter does not limit the power of the State to punish a

2-39  person for conduct which constitutes a crime under other law.

2-40      Sec. 3.  NRS 90.670 is hereby amended to read as follows:

2-41      90.670  A person may not sue under NRS 90.660 unless suit is

2-42  brought within the earliest of [1 year] 2 years after the discovery of

2-43  the violation, [1 year] 2 years after discovery should have been

2-44  made by the exercise of reasonable care, or 5 years after the act,

2-45  omission or transaction constituting the violation.

3-1  Sec. 4.  NRS 171.085 is hereby amended to read as follows:

3-2  171.085  Except as otherwise provided in NRS 171.083,

3-3  171.084 and 171.095, an indictment for:

3-4  1.  Theft, robbery, burglary, forgery, arson , [or] sexual assault

3-5  or a violation of NRS 90.570 must be found, or an information or

3-6  complaint filed, within 4 years after the commission of the offense.

3-7  2.  Any felony other than murder, theft, robbery, burglary,

3-8  forgery, arson , [or] sexual assault or a violation of NRS 90.570

3-9  must be found, or an information or complaint filed, within 3 years

3-10  after the commission of the offense.

3-11      Sec. 5.  NRS 463.157 is hereby amended to read as follows:

3-12      463.157  The Commission shall by regulation:

3-13      1.  Prescribe minimum procedures for adoption by each

3-14  nonrestricted licensee to exercise effective control over its internal

3-15  fiscal affairs, which [shall] must include , but are not limited to ,

3-16  provisions for:

3-17      (a) The safeguarding of its assets and revenues, especially the

3-18  recording of cash and evidences of indebtedness; and

3-19      (b) The provision of reliable records, accounts and reports of

3-20  transactions, operations and events, including reports to the Board

3-21  and the Commission.

3-22      2.  Provide for the adoption and use of internal audits, whether

3-23  by qualified internal auditors or by accountants holding a permit to

3-24  practice public accounting, in the case of each nonrestricted licensee

3-25  whose operation equals or exceeds a specified size. The regulations

3-26  or any standards adopted pursuant to such regulations must, if the

3-27  stock of the nonrestricted licensee is publicly traded, preclude

3-28  internal audits by the same independent accountant hired to

3-29  provide audits, compiled statements or reviews of the financial

3-30  statements required by NRS 463.159. As used in this subsection,

3-31  “internal audit” means a type of control which operates through the

3-32  testing and evaluation of other controls and which is also directed

3-33  toward observing proper compliance with the minimum standards of

3-34  control prescribed pursuant to subsection 1.

3-35      Sec. 6.  The amendatory provisions of section 3 of this act

3-36  apply to a cause of action:

3-37      1.  That has accrued before October 1, 2003, if the applicable

3-38  statute of limitations has commenced but has not yet expired as of

3-39  October 1, 2003; or

3-40      2.  That accrues on or after October 1, 2003.

 

 

 

 

4-1  Sec. 7.  The amendatory provisions of section 4 of this act

4-2  apply to a person who committed a violation of NRS 90.570 before

4-3  October 1, 2003, if the applicable statute of limitations has

4-4  commenced but has not yet expired on October 1, 2003.

 

4-5  H