Major Fraud Act Of 1988

DEFINITION of 'Major Fraud Act Of 1988'

A piece of legislation passed during the Reagan administration that modified and strengthened previous fraud legislation. Among the many changes, the Major Fraud Act of 1988 increased the maximum penalties for fraud, added protection for employees who assist the prosecution of fraud cases and introduced mandatory annual reports on fraud investigations by the attorney general.

BREAKING DOWN 'Major Fraud Act Of 1988'

The timing of the Major Fraud Act makes it seem like a reaction to the securities fraud cases of the late '80s and early '90s. However, much of the legislation targeted government contractors' persistent cost overruns and suspect bidding practices. The increase of penalties to $1 million for a single count and $10 million for multiple counts may not have significantly deterred this type of fraud, but it did increase the amount the government was able to claw back through the courts.

RELATED TERMS
  1. Association Of Certified Fraud ...

    An organization that was created to combat fraud and deception ...
  2. Securities Fraud

    A type of serious white-collar crime in which a person or company, ...
  3. Tax Fraud

    Tax fraud occurs when an individual or business entity willfully ...
  4. Corporate Fraud

    Activities undertaken by an individual or company that are done ...
  5. Mortgage Fraud

    Intentionally falsifying information on a mortgage loan application. ...
  6. Insurance Fraud

    An illegal act on the part of either the buyer or seller of an ...
Related Articles
  1. Personal Finance

    What You Need To Know About Insurance Fraud

    Insurance fraud is as old as commerce. Discover the types of life insurance fraud and how they affect you.
  2. Personal Finance

    Mortgage Fraud: Understanding and Avoiding It

    There are many different ways to be victimized through home ownership - learn how to identify and avoid these crimes.
  3. Financial Advisor

    How To Protect Your Small Business From Fraud

    Small business owners are at risk of being scammed. Here's what you need to know to avoid that.
  4. Trading

    Detecting Financial Statement Fraud

    Find out how to tell if a company is manipulating its financial data, so you don't invest in the next Enron.
  5. Investing

    4 Massive Frauds You've Probably Never Heard Of

    Here are four historically significant, obscure, large-scale frauds from the previous two centuries.
  6. Retirement

    How to Protect Your Parents from Financial Fraud

    How do you protect your parents from being victims of financial fraud before it happens? Here are some tips to help you minimize the risk.
  7. Financial Advisor

    Financial Fraud: 6 Tips to Avoid It (SCHW)

    A good financial planner should work with you and for you. Ensure you are paying attention if you don't want to be the victim of fraud.
  8. Managing Wealth

    Creating a Risk Management Plan for Your Small Business

    Learn how a complete risk management plan can minimize or eliminate your financial exposure through insurance and prevention solutions.
  9. Personal Finance

    Baby Boomers Beware: Financial Fraud That Targets Seniors

    Unfortunately, you can never retire from being the target of financial scams.
  10. Managing Wealth

    How to Recover From Identity Theft

    Identity theft isn't going away, and fixing it can take time and money. But doing nothing isn't an option. Rather than become a victim, it is time to take action.
RELATED FAQS
  1. What is accounting fraud?

    Learn what accounting fraud is, why a company commits account fraud and some types of accounting fraud that misrepresent ... Read Answer >>
  2. Do common stock owners have any protections against bankruptcy or fraud?

    Learn about common stock ownership including the standing of holders in the event of bankruptcy or fraud, and familiarize ... Read Answer >>
  3. What do I do if I think an accountant is in violation of the Generally Accepted Accounting ...

    Learn where to report financial accounting fraud if you suspect an accountant is in violation of the generally accepted accounting ... Read Answer >>
  4. Does identity theft or credit card fraud also occur with cash-on-delivery?

    Understand the process of cash on delivery (COD) as well as where identity theft and fraud may occur and some techniques ... Read Answer >>
  5. What impact did the Sarbanes-Oxley Act have on corporate governance in the United ...

    Learn the effects the Sarbanes-Oxley Act has on corporate governance in the United States, including strict disclosures, ... Read Answer >>
  6. What's the main difference between watered down stock which was outlawed, and the ...

Hot Definitions
  1. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  2. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  3. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  4. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  5. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  6. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
Trading Center