Major Fraud Act Of 1988

AAA

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.

INVESTOPEDIA EXPLAINS '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. Mortgage Fraud

    Intentionally falsifying information on a mortgage loan application. ...
  2. Investor Protection Act

    A component of the Wall Street Reform and Consumer Protection ...
  3. Corporate Fraud

    Activities undertaken by an individual or company that are done ...
  4. Securities Fraud

    A type of serious white-collar crime in which a person or company, ...
  5. Conflict Of Interest

    A situation where a professional, or a corporation, has a vested ...
  6. Whistleblower

    Anyone who has and reports insider knowledge of illegal activities ...
RELATED FAQS
  1. Who are the most famous people convicted of insider trading?

    In finance, insider trading refers to the buying and selling of security by a person who has access to material non-public ... Read Full Answer >>
  2. What's the difference between insider trading and insider information?

    Insider information is the knowledge of nonpublic material about a publicly traded company that may affect the stock's price. ... Read Full Answer >>
  3. Who sets the global standard to stop money laundering and how is it implemented?

    The Financial Action Task Force (FATF) sets the international standard for fighting money laundering. Formed in 1989 by leaders ... Read Full Answer >>
  4. Why does fighting money laundering reduce overall crime?

    Money laundering is the process of converting funds received from illegal activities into ostensibly clean money that does ... Read Full Answer >>
  5. What is accounting fraud?

    Accounting fraud is intentional manipulation of financial statements to create a facade of a company's financial health. ... Read Full Answer >>
  6. Does identity theft or credit card fraud also occur with cash-on-delivery?

    While cash on delivery (COD) is a system intended to typically reduce risk and fraud, as with any type of financial transaction ... Read Full Answer >>
Related Articles
  1. Bonds & Fixed Income

    Tales From Wall Street's Crypt

    Wall Street continues to attract fresh hordes of ghoulish people committing the same old crimes.
  2. Home & Auto

    From Booms To Bailouts: The Banking Crisis Of The 1980s

    The economic environment of the late 1970s and early 1980s created the perfect storm for a banking crisis.
  3. Retirement

    The Ghouls And Monsters On Wall Street

    Learn about some of the creepiest cases of fraud and the characters behind them.
  4. Personal Finance

    4 Dishonest Broker Tactics And How To Avoid Them

    Protecting yourself from unscrupulous practices means knowing how to spot them.
  5. Options & Futures

    Uncovering A Career In Forensic Accounting

    Does a job as a financial sleuth sound interesting to you? Dig in to learn more.
  6. Economics

    Understanding Money Laundering

    The process of creating the appearance that large amounts of money obtained from serious crimes actually originated from a legitimate source.
  7. Investing

    What's an Agency Problem?

    An agency problem occurs when a conflict of interest arises for an agent -- a person acting on behalf of another person. The conflict of interest arises when the agent’s own interests are different ...
  8. Investing Basics

    The Dodd-Frank Wall Street Reform Act

    The Dodd-Frank Wall Street Reform and Consumer Protection Act, commonly called Dodd-Frank, was passed in 2010. The goal of the act is to prevent another great recession like that of 2008, which ...
  9. Stock Analysis

    A New Economic Threat: State-Sponsored Hacking

    State sponsored hacking attempts are becoming a major cause of concern to the US. Here is a list of US sectors most vulnerable to state-sponsored hacking.
  10. Economics

    America's Most Notorious Corporate Criminals

    Learn about the crimes and punishments of some of the most infamous convicted white-collar crooks.

You May Also Like

Hot Definitions
  1. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
  2. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  5. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
  6. Terminal Value - TV

    The value of a bond at maturity, or of an asset at a specified, future valuation date, taking into account factors such as ...
Trading Center