Union Calendar No. 331
116th CONGRESS 2d Session |
[Report No. 116–410]
To enhance civil penalties under the Federal securities laws, and for other purposes.
July 9, 2019
Ms. Porter introduced the following bill; which was referred to the Committee on Financial Services
February 27, 2020
Reported with an amendment; committed to the Committee of the Whole House on the State of the Union and ordered to be printed
[Strike out all after the enacting clause and insert the part printed in italic]
[For text of introduced bill, see copy of bill as introduced on July 9, 2019]
To enhance civil penalties under the Federal securities laws, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
This Act may be cited as the “Stronger Enforcement of Civil Penalties Act of 2019”.
SEC. 2. Updated civil money penalties for securities laws violations.
(a) Securities Act of 1933.—
(1) MONEY PENALTIES IN ADMINISTRATIVE ACTIONS.—Section 8A(g)(2) of the Securities Act of 1933 (15 U.S.C. 77h–1(g)(2)) is amended—
(C) by striking subparagraph (C) and inserting the following:
“(C) THIRD TIER.—
“(i) IN GENERAL.—Notwithstanding subparagraphs (A) and (B), for a third tier act or omission, the amount of penalty for each such act or omission shall not exceed the greater of—
(2) MONEY PENALTIES IN CIVIL ACTIONS.—Section 20(d)(2) of the Securities Act of 1933 (15 U.S.C. 77t(d)(2)) is amended—
(C) by striking subparagraph (C) and inserting the following:
“(C) THIRD TIER.—
“(i) IN GENERAL.—Notwithstanding subparagraphs (A) and (B), for a third tier violation, the amount of penalty for each violation shall not exceed the greater of—
(b) Securities Exchange Act of 1934.—
(1) MONEY PENALTIES IN CIVIL ACTIONS.—Section 21(d)(3)(B) of the Securities Exchange Act of 1934 (15 U.S.C. 78u(d)(3)(B)) is amended—
(C) by striking clause (iii) and inserting the following:
“(iii) THIRD TIER.—
“(I) IN GENERAL.—Notwithstanding clauses (i) and (ii), for a third tier violation, the amount of penalty for each such violation shall not exceed the greater of—
(2) MONEY PENALTIES IN ADMINISTRATIVE ACTIONS.—Section 21B(b) of the Securities Exchange Act of 1934 (15 U.S.C. 78u–2(b)) is amended—
(C) by striking paragraph (3) and inserting the following:
“(3) THIRD TIER.—
“(A) IN GENERAL.—Notwithstanding paragraphs (1) and (2), for a third tier act or omission, the amount of penalty for each such act or omission shall not exceed the greater of—
(c) Investment Company Act of 1940.—
(1) MONEY PENALTIES IN ADMINISTRATIVE ACTIONS.—Section 9(d)(2) of the Investment Company Act of 1940 (15 U.S.C. 80a–9(d)(2)) is amended—
(C) by striking subparagraph (C) and inserting the following:
“(C) THIRD TIER.—
“(i) IN GENERAL.—Notwithstanding subparagraphs (A) and (B), for a third tier act or omission, the amount of penalty for each such act or omission shall not exceed the greater of—
(2) MONEY PENALTIES IN CIVIL ACTIONS.—Section 42(e)(2) of the Investment Company Act of 1940 (15 U.S.C. 80a–41(e)(2)) is amended—
(C) by striking subparagraph (C) and inserting the following:
“(C) THIRD TIER.—
“(i) IN GENERAL.—Notwithstanding subparagraphs (A) and (B), for a third tier violation, the amount of penalty for each such violation shall not exceed the greater of—
(d) Investment Advisers Act of 1940.—
(1) MONEY PENALTIES IN ADMINISTRATIVE ACTIONS.—Section 203(i)(2) of the Investment Advisers Act of 1940 (15 U.S.C. 80b–3(i)(2)) is amended—
(C) by striking subparagraph (C) and inserting the following:
“(C) THIRD TIER.—
“(i) IN GENERAL.—Notwithstanding subparagraphs (A) and (B), for a third tier act or omission, the amount of penalty for each such act or omission shall not exceed the greater of—
(2) MONEY PENALTIES IN CIVIL ACTIONS.—Section 209(e)(2) of the Investment Advisers Act of 1940 (15 U.S.C. 80b–9(e)(2)) is amended—
(C) by striking subparagraph (C) and inserting the following:
“(C) THIRD TIER.—
“(i) IN GENERAL.—Notwithstanding subparagraphs (A) and (B), for a third tier violation, the amount of penalty for each such violation shall not exceed the greater of—
SEC. 3. Penalties for recidivists.
(a) Securities Act of 1933.—
(1) CEASE-AND-DESIST PROCEEDINGS.—Section 8A(g)(2) of the Securities Act of 1933 (15 U.S.C. 77h–1(g)(2)) is amended by adding at the end the following:
“(D) FOURTH TIER.—Notwithstanding subparagraphs (A), (B), and (C), the maximum amount of penalty for each such act or omission shall be 3 times the otherwise applicable amount in such subparagraphs if, within the 5-year period preceding such act or omission, the person who committed the act or omission was criminally convicted for securities fraud or became subject to a judgment or order imposing monetary, equitable, or administrative relief in any Commission action alleging fraud by that person.”.
(2) INJUNCTIONS AND PROSECUTION OF OFFENSES.—Section 20(d)(2) of the Securities Act of 1933 (15 U.S.C. 77t(d)(2)) is amended by adding at the end the following:
“(D) FOURTH TIER.—Notwithstanding subparagraphs (A), (B), and (C), the maximum amount of penalty for each such violation shall be 3 times the otherwise applicable amount in such subparagraphs if, within the 5-year period preceding such violation, the defendant was criminally convicted for securities fraud or became subject to a judgment or order imposing monetary, equitable, or administrative relief in any Commission action alleging fraud by that defendant.”.
(b) Securities exchange Act of 1934.—
(1) CIVIL ACTIONS.—Section 21(d)(3)(B) of the Securities Exchange Act of 1934 (15 U.S.C. 78u(d)(3)(B)) is amended by adding at the end the following:
“(iv) FOURTH TIER.—Notwithstanding clauses (i), (ii), and (iii), the maximum amount of penalty for each such violation shall be 3 times the otherwise applicable amount in such clauses if, within the 5-year period preceding such violation, the defendant was criminally convicted for securities fraud or became subject to a judgment or order imposing monetary, equitable, or administrative relief in any Commission action alleging fraud by that defendant.”.
(2) ADMINISTRATIVE PROCEEDINGS.—Section 21B(b) of the Securities Exchange Act of 1934 (15 U.S.C. 78u–2(b)) is amended by adding at the end the following:
“(4) FOURTH TIER.—Notwithstanding paragraphs (1), (2), and (3), the maximum amount of penalty for each such act or omission shall be 3 times the otherwise applicable amount in such paragraphs if, within the 5-year period preceding such act or omission, the person who committed the act or omission was criminally convicted for securities fraud or became subject to a judgment or order imposing monetary, equitable, or administrative relief in any Commission action alleging fraud by that person.”.
(c) Investment company Act of 1940.—
(1) INELIGIBILITY OF CERTAIN UNDERWRITERS AND AFFILIATES.—Section 9(d)(2) of the Investment Company Act of 1940 (15 U.S.C. 80a–9(d)(2)) is amended by adding at the end the following:
“(D) FOURTH TIER.—Notwithstanding subparagraphs (A), (B), and (C), the maximum amount of penalty for each such act or omission shall be 3 times the otherwise applicable amount in such subparagraphs if, within the 5-year period preceding such act or omission, the person who committed the act or omission was criminally convicted for securities fraud or became subject to a judgment or order imposing monetary, equitable, or administrative relief in any Commission action alleging fraud by that person.”.
(2) ENFORCEMENT OF CERTAIN ACTIONS.—Section 42(e)(2) of the Investment Company Act of 1940 (15 U.S.C. 80a–41(e)(2)) is amended by adding at the end the following:
“(D) FOURTH TIER.—Notwithstanding subparagraphs (A), (B), and (C), the maximum amount of penalty for each such violation shall be 3 times the otherwise applicable amount in such subparagraphs if, within the 5-year period preceding such violation, the defendant was criminally convicted for securities fraud or became subject to a judgment or order imposing monetary, equitable, or administrative relief in any Commission action alleging fraud by that defendant.”.
(d) Investment advisers Act of 1940.—The Investment Advisers Act of 1940 (15 U.S.C. 80b–1 et seq.) is amended—
(1) in section 203(i)(2) (15 U.S.C. 80b–3(i)(2)), by adding at the end the following:
“(D) FOURTH TIER.—Notwithstanding subparagraphs (A), (B), and (C), the maximum amount of penalty for each such act or omission shall be 3 times the otherwise applicable amount in such subparagraphs if, within the 5-year period preceding such act or omission, the person who committed the act or omission was criminally convicted for securities fraud or became subject to a judgment or order imposing monetary, equitable, or administrative relief in any Commission action alleging fraud by that person.”; and
(2) in section 209(e)(2) (15 U.S.C. 80b–9(e)(2)) by adding at the end the following:
“(D) FOURTH TIER.—Notwithstanding subparagraphs (A), (B), and (C), the maximum amount of penalty for each such violation shall be 3 times the otherwise applicable amount in such subparagraphs if, within the 5-year period preceding such violation, the defendant was criminally convicted for securities fraud or became subject to a judgment or order imposing monetary, equitable, or administrative relief in any Commission action alleging fraud by that defendant.”.
SEC. 4. Violations of injunctions and bars.
(a) Securities Act of 1933.—Section 20(d) of the Securities Act of 1933 (15 U.S.C. 77t(d)) is amended—
(1) in paragraph (1), by inserting after “the rules or regulations thereunder,” the following: “a Federal court injunction or a bar obtained or entered by the Commission under this title,”; and
(2) by striking paragraph (4) and inserting the following:
“(4) SPECIAL PROVISIONS RELATING TO A VIOLATION OF AN INJUNCTION OR CERTAIN ORDERS.—
“(A) IN GENERAL.—Each separate violation of an injunction or order described in subparagraph (B) shall be a separate offense, except that in the case of a violation through a continuing failure to comply with such injunction or order, each day of the failure to comply with the injunction or order shall be deemed a separate offense.
(b) Securities exchange Act of 1934.—Section 21(d)(3) of the Securities Exchange Act of 1934 (15 U.S.C. 78u(d)(3)) is amended—
(1) in subparagraph (A), by inserting after “the rules or regulations thereunder,” the following: “a Federal court injunction or a bar obtained or entered by the Commission under this title,”; and
(2) by striking subparagraph (D) and inserting the following:
“(D) SPECIAL PROVISIONS RELATING TO A VIOLATION OF AN INJUNCTION OR CERTAIN ORDERS.—
“(i) IN GENERAL.—Each separate violation of an injunction or order described in clause (ii) shall be a separate offense, except that in the case of a violation through a continuing failure to comply with such injunction or order, each day of the failure to comply with the injunction or order shall be deemed a separate offense.
(c) Investment company Act of 1940.—Section 42(e) of the Investment Company Act of 1940 (15 U.S.C. 80a–41(e)) is amended—
(1) in paragraph (1), by inserting after “the rules or regulations thereunder,” the following: “a Federal court injunction or a bar obtained or entered by the Commission under this title,”; and
(2) by striking paragraph (4) and inserting the following:
“(4) SPECIAL PROVISIONS RELATING TO A VIOLATION OF AN INJUNCTION OR CERTAIN ORDERS.—
“(A) IN GENERAL.—Each separate violation of an injunction or order described in subparagraph (B) shall be a separate offense, except that in the case of a violation through a continuing failure to comply with such injunction or order, each day of the failure to comply with the injunction or order shall be deemed a separate offense.
(d) Investment advisers Act of 1940.—Section 209(e) of the Investment Advisers Act of 1940 (15 U.S.C. 80b–9(e)) is amended—
(1) in paragraph (1), by inserting after “the rules or regulations thereunder,” the following: “a Federal court injunction or a bar obtained or entered by the Commission under this title,”; and
(2) by striking paragraph (4) and inserting the following:
“(4) SPECIAL PROVISIONS RELATING TO A VIOLATION OF AN INJUNCTION OR CERTAIN ORDERS.—
“(A) IN GENERAL.—Each separate violation of an injunction or order described in subparagraph (B) shall be a separate offense, except that in the case of a violation through a continuing failure to comply with such injunction or order, each day of the failure to comply with the injunction or order shall be deemed a separate offense.
Union Calendar No. 331 | |||||
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[Report No. 116–410] | |||||
A BILL | |||||
To enhance civil penalties under the Federal securities laws, and for other purposes. | |||||
February 27, 2020 | |||||
Reported with an amendment; committed to the Committee of the Whole House on the State of the Union and ordered to be printed |