Washington ? Facing a volatile stock market and a jittery public, congressional negotiators approved compromise legislation Wednesday to crack down on corporate fraud. The bill creates criminal penalties and harsh jail terms for wrongdoers and sets up an independent board to oversee accounting firms.

President Bush was ready to sign the legislation after its expected swift and overwhelming passage. A bipartisan House-Senate committee of about 20 lawmakers approved the agreement on voice votes.

News of the deal added momentum to Wall Street’s second-biggest day ever, after nine weeks of punishing losses. The Dow Jones industrials climbed more than nearly 500 points and crossed back over 8,000.

House Republicans ended up accepting most of the stricter parts of a bill the Democratic-controlled Senate passed unanimously last week.

They gave ground, aware that a string of corporate accounting scandals has unnerved investors and the stock market, evaporating Americans’ retirement savings.

“The legislation reflects our determination to see that the confidence of investors in our capital markets is restored,” said Sen. Paul Sarbanes, D-Md., chairman of the Senate Banking Committee.

The House was expected to vote on the final package today, with a Senate vote expected soon thereafter. Nearly unanimous votes were anticipated.

Bush “looks forward to signing this into law,” White House spokesman Ari Fleischer said.

Treasury Secretary Paul O’Neill said the deal amounted to a “lock on the barn door” to prevent the kind of corporate misdeeds that have shaken investors’ confidence and the public trust in big business.

GOP Sen. Phil Gramm of Texas, the sole dissenter in the conference committee, acknowledged that “in the environment that we’re in, virtually anything could have passed the Congress.”

The legislation creates criminal penalties and prison terms for company fraud and document shredding, and establishes an independent, private-sector board to oversee the accounting industry.

The bill sets up an accounting oversight board with subpoena power and restrictions on accounting firms doing consulting services for corporate clients whose books they audit.

Senate Democrats agreed to the longer prison terms and bigger fines for fraud and shredding documents contained in the House version.

The negotiators agreed to include a GOP-pushed plan to create a federal account for defrauded investors. The account would take in all the civil fines, payments and assets from corporate wrongdoers.

The money now goes to the government unless the Securities and Exchange Commission sets up a special fund for investors in a case against a company.