15 USC § 78u–2 - Civil remedies in administrative proceedings
(a)
Commission authority to assess money penalties
(1)
In general
In any proceeding instituted pursuant to sections
78o
(b)(4),
78o
(b)(6),
78o–6,
78o–4,
78o–5,
78o–7, or
78q–1 of this title against any person, the Commission or the appropriate regulatory agency may impose a civil penalty if it finds, on the record after notice and opportunity for hearing, that such penalty is in the public interest and that such person—
(A)
has willfully violated any provision of the Securities Act of 1933 [15 U.S.C. 77a et seq.], the Investment Company Act of 1940 [15 U.S.C. 80a–1 et seq.], the Investment Advisers Act of 1940 [15 U.S.C. 80b–1 et seq.], or this chapter, or the rules or regulations thereunder, or the rules of the Municipal Securities Rulemaking Board;
(B)
has willfully aided, abetted, counseled, commanded, induced, or procured such a violation by any other person;
(C)
has willfully made or caused to be made in any application for registration or report required to be filed with the Commission or with any other appropriate regulatory agency under this chapter, or in any proceeding before the Commission with respect to registration, any statement which was, at the time and in the light of the circumstances under which it was made, false or misleading with respect to any material fact, or has omitted to state in any such application or report any material fact which is required to be stated therein; or
(2)
Cease-and-desist proceedings
In any proceeding instituted under section
78u–3 of this title against any person, the Commission may impose a civil penalty, if the Commission finds, on the record after notice and opportunity for hearing, that such person—
(b)
Maximum amount of penalty
(1)
First tier
The maximum amount of penalty for each act or omission described in subsection (a) of this section shall be $5,000 for a natural person or $50,000 for any other person.
(2)
Second tier
Notwithstanding paragraph (1), the maximum amount of penalty for each such act or omission shall be $50,000 for a natural person or $250,000 for any other person if the act or omission described in subsection (a) of this section involved fraud, deceit, manipulation, or deliberate or reckless disregard of a regulatory requirement.
(3)
Third tier
Notwithstanding paragraphs (1) and (2), the maximum amount of penalty for each such act or omission shall be $100,000 for a natural person or $500,000 for any other person if—
(c)
Determination of public interest
In considering under this section whether a penalty is in the public interest, the Commission or the appropriate regulatory agency may consider—
(1)
whether the act or omission for which such penalty is assessed involved fraud, deceit, manipulation, or deliberate or reckless disregard of a regulatory requirement;
(3)
the extent to which any person was unjustly enriched, taking into account any restitution made to persons injured by such behavior;
(4)
whether such person previously has been found by the Commission, another appropriate regulatory agency, or a self-regulatory organization to have violated the Federal securities laws, State securities laws, or the rules of a self-regulatory organization, has been enjoined by a court of competent jurisdiction from violations of such laws or rules, or has been convicted by a court of competent jurisdiction of violations of such laws or of any felony or misdemeanor described in section
78o
(b)(4)(B) of this title;
(d)
Evidence concerning ability to pay
In any proceeding in which the Commission or the appropriate regulatory agency may impose a penalty under this section, a respondent may present evidence of the respondent’s ability to pay such penalty. The Commission or the appropriate regulatory agency may, in its discretion, consider such evidence in determining whether such penalty is in the public interest. Such evidence may relate to the extent of such person’s ability to continue in business and the collectability of a penalty, taking into account any other claims of the United States or third parties upon such person’s assets and the amount of such person’s assets.
(e)
Authority to enter order requiring accounting and disgorgement
In any proceeding in which the Commission or the appropriate regulatory agency may impose a penalty under this section, the Commission or the appropriate regulatory agency may enter an order requiring accounting and disgorgement, including reasonable interest. The Commission is authorized to adopt rules, regulations, and orders concerning payments to investors, rates of interest, periods of accrual, and such other matters as it deems appropriate to implement this subsection.
(f)
Security-based swaps
(2)
Security-based swap dealer or major security-based swap participant
Any security-based swap dealer or major security-based swap participant that knowingly or recklessly evades or participates in or facilitates an evasion of the requirements of section
78c–3 of this title shall be liable for a civil money penalty in twice the amount otherwise available for a violation of section
78c–3 of this title.
[1] So in original. The semicolon probably should be a period.
(a)
Commission authority to assess money penalties
(1)
In general
In any proceeding instituted pursuant to sections
78o
(b)(4),
78o
(b)(6),
78o–6,
78o–4,
78o–5,
78o–7, or
78q–1 of this title against any person, the Commission or the appropriate regulatory agency may impose a civil penalty if it finds, on the record after notice and opportunity for hearing, that such penalty is in the public interest and that such person—
(A)
has willfully violated any provision of the Securities Act of 1933 [15 U.S.C. 77a et seq.], the Investment Company Act of 1940 [15 U.S.C. 80a–1 et seq.], the Investment Advisers Act of 1940 [15 U.S.C. 80b–1 et seq.], or this chapter, or the rules or regulations thereunder, or the rules of the Municipal Securities Rulemaking Board;
(B)
has willfully aided, abetted, counseled, commanded, induced, or procured such a violation by any other person;
(C)
has willfully made or caused to be made in any application for registration or report required to be filed with the Commission or with any other appropriate regulatory agency under this chapter, or in any proceeding before the Commission with respect to registration, any statement which was, at the time and in the light of the circumstances under which it was made, false or misleading with respect to any material fact, or has omitted to state in any such application or report any material fact which is required to be stated therein; or
(2)
Cease-and-desist proceedings
In any proceeding instituted under section
78u–3 of this title against any person, the Commission may impose a civil penalty, if the Commission finds, on the record after notice and opportunity for hearing, that such person—
(b)
Maximum amount of penalty
(1)
First tier
The maximum amount of penalty for each act or omission described in subsection (a) of this section shall be $5,000 for a natural person or $50,000 for any other person.
(2)
Second tier
Notwithstanding paragraph (1), the maximum amount of penalty for each such act or omission shall be $50,000 for a natural person or $250,000 for any other person if the act or omission described in subsection (a) of this section involved fraud, deceit, manipulation, or deliberate or reckless disregard of a regulatory requirement.
(3)
Third tier
Notwithstanding paragraphs (1) and (2), the maximum amount of penalty for each such act or omission shall be $100,000 for a natural person or $500,000 for any other person if—
(c)
Determination of public interest
In considering under this section whether a penalty is in the public interest, the Commission or the appropriate regulatory agency may consider—
(1)
whether the act or omission for which such penalty is assessed involved fraud, deceit, manipulation, or deliberate or reckless disregard of a regulatory requirement;
(3)
the extent to which any person was unjustly enriched, taking into account any restitution made to persons injured by such behavior;
(4)
whether such person previously has been found by the Commission, another appropriate regulatory agency, or a self-regulatory organization to have violated the Federal securities laws, State securities laws, or the rules of a self-regulatory organization, has been enjoined by a court of competent jurisdiction from violations of such laws or rules, or has been convicted by a court of competent jurisdiction of violations of such laws or of any felony or misdemeanor described in section
78o
(b)(4)(B) of this title;
(d)
Evidence concerning ability to pay
In any proceeding in which the Commission or the appropriate regulatory agency may impose a penalty under this section, a respondent may present evidence of the respondent’s ability to pay such penalty. The Commission or the appropriate regulatory agency may, in its discretion, consider such evidence in determining whether such penalty is in the public interest. Such evidence may relate to the extent of such person’s ability to continue in business and the collectability of a penalty, taking into account any other claims of the United States or third parties upon such person’s assets and the amount of such person’s assets.
(e)
Authority to enter order requiring accounting and disgorgement
In any proceeding in which the Commission or the appropriate regulatory agency may impose a penalty under this section, the Commission or the appropriate regulatory agency may enter an order requiring accounting and disgorgement, including reasonable interest. The Commission is authorized to adopt rules, regulations, and orders concerning payments to investors, rates of interest, periods of accrual, and such other matters as it deems appropriate to implement this subsection.
(f)
Security-based swaps
(2)
Security-based swap dealer or major security-based swap participant
Any security-based swap dealer or major security-based swap participant that knowingly or recklessly evades or participates in or facilitates an evasion of the requirements of section
78c–3 of this title shall be liable for a civil money penalty in twice the amount otherwise available for a violation of section
78c–3 of this title.
[1] So in original. The semicolon probably should be a period.
Source
(June 6, 1934, ch. 404, title I, § 21B, as added Pub. L. 101–429, title II, § 202(a),Oct. 15, 1990, 104 Stat. 937; amended Pub. L. 107–204, title V, § 501(b),July 30, 2002, 116 Stat. 793; Pub. L. 109–291, § 4(b)(1)(B),Sept. 29, 2006, 120 Stat. 1337; Pub. L. 111–203, title VII, § 773, title IX, § 929P(a)(2),July 21, 2010, 124 Stat. 1802, 1863.)
Amendment of Section
Unless otherwise provided, amendment by subtitle B (§§ 761–774) of title VII of Pub. L. 111–203effective on the later of 360 days after July 21, 2010, or, to the extent a provision of subtitle B requires a rulemaking, not less than 60 days after publication of the final rule or regulation implementing such provision of subtitle B, see 2010 Amendment notes and Effective Date of 2010 Amendment note below.
References in Text
The Securities Act of 1933, referred to in subsec. (a)(1)(A), is act May 27, 1933, ch. 38, title I, 48 Stat. 74, which is classified generally to subchapter I (§ 77a et seq.) of chapter
2A of this title. For complete classification of this Act to the Code, see section
77a of this title and Tables.
The Investment Company Act of 1940, referred to in subsec. (a)(1)(A), is title I of act Aug. 22, 1940, ch. 686, 54 Stat. 789, which is classified generally to subchapter I (§ 80a–1 et seq.) of chapter
2D of this title. For complete classification of this Act to the Code, see section
80a–51 of this title and Tables.
The Investment Advisers Act of 1940, referred to in subsec. (a)(1)(A), is title II of act Aug. 22, 1940, ch. 686, 54 Stat. 847, which is classified generally to subchapter II (§ 80b–1 et seq.) of chapter
2D of this title. For complete classification of this Act to the Code, see section
80b–20 of this title and Tables.
This chapter, referred to in subsec. (a)(1)(A), (C), (2), was in the original “this title”. See References in Text note set out under section
78a of this title.
Amendments
2010—Subsec. (a). Pub. L. 111–203, § 929P(a)(2), designated existing provisions as par. (1) and inserted heading, inserted “that such penalty is in the public interest and” before “that such person—” in introductory provisions, redesignated former pars. (1) to (4) as subpars. (A) to (D), respectively, of par. (1) and realigned margins, struck out concluding provisions which read “and that such penalty is in the public interest.”, and added par. (2).
Subsec. (f). Pub. L. 111–203, § 773, added subsec. (f).
2006—Subsec. (a). Pub. L. 109–291inserted “78o–7,” after “78o–5,” in introductory provisions.
2002—Subsec. (a). Pub. L. 107–204inserted “78o–6,” before “78o–4,” in introductory provisions.
Effective Date of 2010 Amendment
Amendment by section 929P(a)(2) ofPub. L. 111–203effective 1 day after July 21, 2010, except as otherwise provided, see section 4 ofPub. L. 111–203, set out as an Effective Date note under section
5301 of Title
12, Banks and Banking.
Amendment by section 773 ofPub. L. 111–203effective on the later of 360 days after July 21, 2010, or, to the extent a provision of subtitle B (§§ 761–774) of title VII of Pub. L. 111–203requires a rulemaking, not less than 60 days after publication of the final rule or regulation implementing such provision of subtitle B, see section 774 ofPub. L. 111–203, set out as a note under section
77b of this title.
Effective Date
Section effective Oct. 15, 1990, with provisions relating to civil penalties and accounting and disgorgement, see section 1(c)(1), (2) ofPub. L. 101–429, set out in an Effective Date of 1990 Amendment note under section
77g of this title.
The table below lists the classification updates, since Jan. 3, 2012, for this section. Updates to a broader range of sections may be found at the update page for containing chapter, title, etc.
The most recent Classification Table update that we have noticed was Wednesday, May 29, 2013
An empty table indicates that we see no relevant changes listed in the classification tables. If you suspect that our system may be missing something, please double-check with the Office of the Law Revision Counsel.
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