Assembly Bill No. 10–Committee of the Whole

 

CHAPTER..........

 

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:

 

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

 thereto a new section to read as follows:

    In any investigation, proceeding or prosecution with respect to

 any violation of a provision of this chapter, a regulation adopted

 pursuant to this chapter, an order denying, suspending or

 revoking the effectiveness of registration or an order to cease and

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

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

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

 book, paper, document or record has been forged or fraudulently

 altered; or

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

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

 paper, document or record, including, without limitation, any

 electronic record, with the intent to:

    (a) Conceal any violation of any provision of this chapter, a

 regulation adopted pursuant to this chapter, an order denying,

 suspending or revoking the effectiveness of registration or an

 order to cease and desist issued by the Administrator;

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

 violated any provision of this chapter, a regulation adopted

 pursuant to this chapter, an order denying, suspending or

 revoking the effectiveness of registration or an order to cease and

 desist issued by the Administrator; or

    (c) Delay or hinder the investigation or prosecution of any

 person for any violation of any provision of this chapter, a

 regulation adopted pursuant to this chapter, an order denying,

 suspending or revoking the effectiveness of registration or an

 order to cease and desist issued by the Administrator.

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

    90.650  1.  A person who willfully violates:

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

 violates NRS 90.600 knowing that the statement made is false or

 misleading in any material respect;

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

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

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

 Administrator pursuant to thischapter,

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

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

 a minimum term of not less than 1 year and a maximum term of

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

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

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

 penalty, the court shall order the person to pay restitution.

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

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

 proves lack of knowledge of the regulation or order.

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

 person for conduct which constitutes a crime under other law.

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

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

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

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

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

 omission or transaction constituting the violation.

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

    171.085  Except as otherwise provided in NRS 171.083,

 171.084 and 171.095, an indictment for:

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

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

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

    2.  Any felony other than murder, theft, robbery, burglary,

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

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

 after the commission of the offense.

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

    463.157  The Commission shall by regulation:

    1.  Prescribe minimum procedures for adoption by each

 nonrestricted licensee to exercise effective control over its internal

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

 provisions for:

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

 recording of cash and evidences of indebtedness; and

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

transactions, operations and events, including reports to the Board

 and the Commission.

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

 by qualified internal auditors or by accountants holding a permit to

 practice public accounting, in the case of each nonrestricted

 licensee whose operation equals or exceeds a specified size. The

 regulations or any standards adopted pursuant to such

 regulations must, if the stock of the nonrestricted licensee is

 publicly traded, preclude internal audits by the same independent

 accountant hired to provide audits, compiled statements or

 reviews of the financial statements required by NRS 463.159. As

 used in this subsection, “internal audit” means a type of control

 which operates through the testing and evaluation of other controls

 and which is also directed toward observing proper compliance

 with the minimum standards of control prescribed pursuant to

 subsection 1.

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

 apply to a cause of action:

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

 statute of limitations has commenced but has not yet expired as of

 October 1, 2003; or

    2.  That accrues on or after October 1, 2003.

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

 apply to a person who committed a violation of NRS 90.570 before

 October 1, 2003, if the applicable statute of limitations has

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

 

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