Connecticut corporate anti-fraud statute.

On July 9, 2003, Governor Rowland signed into law Connecticut's corporate anti-fraud statute (2003 Conn. Pub. Act 03-259, [sub section] 33-39) (Connecticut Corporate Anti-Fraud Act). This statute, which became effective October 1, 2003, represents the state's response to the widely publicized corporate scandals of the past few years. The new law has important implications for publicly held corporations, in some respects regardless of whether they are incorporated or authorized to do business in Connecticut. Among its potential effects, the Connecticut Corporate Anti-Fraud Act raises the specter of claims under the Connecticut Unfair Trade Practices Act (CUTPA) for certain violations, and increases risks to CEOs and CFOs. Although earlier drafts of the Connecticut law extended far beyond the federal Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley Act) to apply to all corporations, as enacted, the statute is limited to public companies.

Some of the provisions of the Connecticut Corporate Anti-Fraud Act apply to all publicly held corporations and others apply to publicly held corporations organized under the laws of, or authorized to do business in, Connecticut. Section …