S.Amdt. 1508

1. Adds SEC. 9. UPDATED CIVIL MONEY PENALTIES FOR SECURITIES LAW VIOLATIONS at the end of the bill

   Adds a section

   In S. 2038 · Placed on Calendar Senate

   (f) Rule of Construction.--Nothing in this section shall be construed to be in derogation of existing laws, regulations, or ethical obligations of Federal employees.

   Inserted: SEC. 9. UPDATED CIVIL MONEY PENALTIES FOR SECURITIES LAW VIOLATIONS.

   Inserted: (a) Securities Act of 1933.--

   Inserted: (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--

   Inserted: (A) in subparagraph (A)--

   Inserted: (i) by striking "$7,500" and inserting "$10,000"; and

   Inserted: (ii) by striking "$75,000" and inserting "$100,000";

   Inserted: (B) in subparagraph (B)--

   Inserted: (i) by striking "$75,000" and inserting "$100,000"; and

   Inserted: (ii) by striking "$375,000" and inserting "$500,000"; and

   Inserted: (C) by amending subparagraph (C) to read as follows:

   Inserted: "(C) Third tier.--Notwithstanding subparagraphs (A) and (B), the amount of penalty for each such act or omission shall not exceed the greater of--

   Inserted: "(i) $1,000,000 for a natural person or $10,000,000 for any other person;

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   Inserted: "(ii) 3 times the gross amount of pecuniary gain to the person who committed the act or omission; or

   Inserted: "(iii) the amount of losses incurred by victims as a result of the act or omission, if--

   Inserted: "(I) the act or omission described in paragraph (1) involved fraud, deceit, manipulation, or deliberate or reckless disregard of a regulatory requirement; and

   Inserted: "(II) such act or omission directly or indirectly resulted in--

   Inserted: "(aa) substantial losses or created a significant risk of substantial losses to other persons; or

   Inserted: "(bb) substantial pecuniary gain to the person who committed the act or omission.".

   Inserted: (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--

   Inserted: (A) in subparagraph (A)--

   Inserted: (i) by striking "$5,000" and inserting "$10,000"; and

   Inserted: (ii) by striking "$50,000" and inserting "$100,000";

   Inserted: (B) in subparagraph (B)--

   Inserted: (i) by striking "$50,000" and inserting "$100,000"; and

   Inserted: (ii) by striking "$250,000" and inserting "$500,000"; and

   Inserted: (C) in subparagraph (C), by striking "greater of (i) $100,000 for a natural person or $500,000 for any other person, or (ii) the gross amount of pecuniary gain to such defendant as a result of the violation" and inserting the following: "greater of--

   Inserted: "(i) $1,000,000 for a natural person or $10,000,000 for any other person;

   Inserted: "(ii) 3 times the gross amount of pecuniary gain to such defendant as a result of the violation; or

   Inserted: "(iii) the amount of losses incurred by victims as a result of the violation".

   Inserted: (b) Securities Exchange Act of 1934.--

   Inserted: (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--

   Inserted: (A) in clause (i)--

   Inserted: (i) by striking "$5,000" and inserting "$10,000"; and

   Inserted: (ii) by striking "$50,000" and inserting "$100,000";

   Inserted: (B) in clause (ii)--

   Inserted: (i) by striking "$50,000" and inserting "$100,000"; and

   Inserted: (ii) by striking "$250,000" and inserting "$500,000"; and

   Inserted: (C) in clause (iii), by striking "greater of (I) $100,000 for a natural person or $500,000 for any other person, or (II) the gross amount of pecuniary gain to such defendant as a result of the violation" and inserting the following: "greater of--

   Inserted: "(I) $1,000,000 for a natural person or $10,000,000 for any other person;

   Inserted: "(II) 3 times the gross amount of pecuniary gain to such defendant as a result of the violation; or

   Inserted: "(III) the amount of losses incurred by victims as a result of the violation".

   Inserted: (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--

   Inserted: (A) in paragraph (1)--

   Inserted: (i) by striking "$5,000" and inserting "$10,000"; and

   Inserted: (ii) by striking "$50,000" and inserting "$100,000";

   Inserted: (B) in paragraph (2)--

   Inserted: (i) by striking "$50,000" and inserting "$100,000"; and

   Inserted: (ii) by striking "$250,000" and inserting "$500,000"; and

   Inserted: (C) by amending paragraph (3) to read as follows:

   Inserted: "(3) Third tier.--Notwithstanding paragraphs (1) and (2), the amount of penalty for each such act or omission shall not exceed the greater of--

   Inserted: "(A) $1,000,000 for a natural person or $10,000,000 for any other person;

   Inserted: "(B) 3 times the gross amount of pecuniary gain to the person who committed the act or omission; or

   Inserted: "(C) the amount of losses incurred by victims as a result of the act or omission, if--

   Inserted: "(i) the act or omission described in subsection (a) involved fraud, deceit, manipulation, or deliberate or reckless disregard of a regulatory requirement; and

   Inserted: "(ii) such act or omission directly or indirectly resulted in substantial losses or created a significant risk of substantial losses to other persons or resulted in substantial pecuniary gain to the person who committed the act or omission.".

   Inserted: (c) Investment Company Act of 1940.--

   Inserted: (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--

   Inserted: (A) in subparagraph (A)--

   Inserted: (i) by striking "$5,000" and inserting "$10,000"; and

   Inserted: (ii) by striking "$50,000" and inserting "$100,000";

   Inserted: (B) in subparagraph (B)--

   Inserted: (i) by striking "$50,000" and inserting "$100,000"; and

   Inserted: (ii) by striking "$250,000" and inserting "$500,000"; and

   Inserted: (C) by amending subparagraph (C) to read as follows:

   Inserted: "(C) Third tier.--Notwithstanding subparagraphs (A) and (B), the amount of penalty for each such act or omission shall not exceed the greater of--

   Inserted: "(i) $1,000,000 for a natural person or $10,000,000 for any other person;

   Inserted: "(ii) 3 times the gross amount of pecuniary gain to the person who committed the act or omission; or

   Inserted: "(iii) the amount of losses incurred by victims as a result of the act or omission, if--

   Inserted: "(I) the act or omission described in paragraph (1) involved fraud, deceit, manipulation, or deliberate or reckless disregard of a regulatory requirement; and

   Inserted: "(II) such act or omission directly or indirectly resulted in substantial losses or created a significant risk of substantial losses to other persons or resulted in substantial pecuniary gain to the person who committed the act or omission.".

   Inserted: (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--

   Inserted: (A) in subparagraph (A)--

   Inserted: (i) by striking "$5,000" and inserting "$10,000"; and

   Inserted: (ii) by striking "$50,000" and inserting "$100,000";

   Inserted: (B) in subparagraph (B)--

   Inserted: (i) by striking "$50,000" and inserting "$100,000"; and

   Inserted: (ii) by striking "$250,000" and inserting "$500,000"; and

   Inserted: (C) in subparagraph (C), by striking "greater of (i) $100,000 for a natural person or $500,000 for any other person, or (ii) the gross amount of pecuniary gain to such defendant as a result of the violation" and inserting the following: "greater of--

   Inserted: "(i) $1,000,000 for a natural person or $10,000,000 for any other person;

   Inserted: "(ii) 3 times the gross amount of pecuniary gain to such defendant as a result of the violation; or

   Inserted: "(iii) the amount of losses incurred by victims as a result of the violation".

   Inserted: (d) Investment Advisers Act of 1940.--

   Inserted: (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--

   Inserted: (A) in subparagraph (A)--

   Inserted: (i) by striking "$5,000" and inserting "$10,000"; and

   Inserted: (ii) by striking "$50,000" and inserting "$100,000";

   Inserted: (B) in subparagraph (B)--

   Inserted: (i) by striking "$50,000" and inserting "$100,000"; and

   Inserted: (ii) by striking "$250,000" and inserting "$500,000"; and

   Inserted: (C) by amending subparagraph (C) to read as follows:

   Inserted: "(C) Third tier.--Notwithstanding subparagraphs (A) and (B), the amount of penalty for each such act or omission shall not exceed the greater of--

   Inserted: "(i) $1,000,000 for a natural person or $10,000,000 for any other person;

   Inserted: "(ii) 3 times the gross amount of pecuniary gain to the person who committed the act or omission; or

   Inserted: "(iii) the amount of losses incurred by victims as a result of the act or omission, if--

   Inserted: "(I) the act or omission described in paragraph (1) involved fraud, deceit, manipulation, or deliberate or reckless disregard of a regulatory requirement; and

   Inserted: "(II) such act or omission directly or indirectly resulted in substantial losses or created a significant risk of substantial losses to other persons or resulted in substantial pecuniary gain to the person who committed the act or omission.".

   Inserted: (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--

   Inserted: (A) in subparagraph (A)--

   Inserted: (i) by striking "$5,000" and inserting "$10,000"; and

   Inserted: (ii) by striking "$50,000" and inserting "$100,000";

   Inserted: (B) in subparagraph (B)--

   Inserted: (i) by striking "$50,000" and inserting "$100,000"; and

   Inserted: (ii) by striking "$250,000" and inserting "$500,000"; and

   Inserted: (C) in subparagraph (C), by striking "greater of (i) $100,000 for a natural person or $500,000 for any other person, or (ii) the gross amount of pecuniary gain to such defendant as a result of the violation" and inserting the following: "greater of--

   Inserted: "(i) $1,000,000 for a natural person or $10,000,000 for any other person;

   Inserted: "(ii) 3 times the gross amount of pecuniary gain to such defendant as a result of the violation; or

   Inserted: "(iii) the amount of losses incurred by victims as a result of the violation".

   Inserted: SEC. 10. PENALTIES FOR RECIDIVISTS.

   Inserted: (a) Securities Act of 1933.--

   Inserted: (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:

   Inserted: "(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.".

   Inserted: (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:

   Inserted: "(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.".

   Inserted: (b) Securities Exchange Act of 1934.--

   Inserted: (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:

   Inserted: "(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.".

   Inserted: (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:

   Inserted: "(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.".

   Inserted: (c) Investment Company Act of 1940.--

   Inserted: (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:

   Inserted: "(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.".

   Inserted: (2) Enforcement.--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:

   Inserted: "(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.".

   Inserted: (d) Investment Advisers Act of 1940.--The Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.) is amended--

   Inserted: (1) in section 203(i)(2) (15 U.S.C. 80b-3(i)(2)), by adding at the end the following:

   Inserted: "(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

   Inserted: (2) in section 209(e)(2) (15 U.S.C. 80b-9(e)(2)) by adding at the end the following:

   Inserted: "(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.".

   Inserted: SEC. 11. VIOLATIONS OF INJUNCTIONS AND BARS.

   Inserted: (a) Securities Act of 1933.--Section 20(d) of the Securities Act of 1933 (15 U.S.C. 77t(d)) is amended--

   Inserted: (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

   Inserted: (2) by amending paragraph (4) to read as follows:

   Inserted: "(4) Special provisions relating to a violation of an injunction or certain orders.--

   Inserted: "(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.

   Inserted: "(B) Injunctions and orders.--Subparagraph (A) shall apply with respect to any action to enforce--

   Inserted: "(i) a Federal court injunction obtained pursuant to this title;

   Inserted: "(ii) an order entered or obtained by the Commission pursuant to this title that bars, suspends, places limitations on the activities or functions of, or prohibits the activities of, a person; or

   Inserted: "(iii) a cease-and-desist order entered by the Commission pursuant to section 8A.".

   Inserted: (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--

   Inserted: (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

   Inserted: (2) by amending subparagraph (D) to read as follows:

   Inserted: "(D) Special provisions relating to a violation of an injunction or certain orders.--

   Inserted: "(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.

   Inserted: "(ii) Injunctions and orders.--Clause (i) shall apply with respect to an action to enforce--

   Inserted: "(I) a Federal court injunction obtained pursuant to this title;

   Inserted: "(II) an order entered or obtained by the Commission pursuant to this title that bars, suspends, places limitations on the activities or functions of, or prohibits the activities of, a person; or

   Inserted: "(III) a cease-and-desist order entered by the Commission pursuant to section 21C.".

   Inserted: (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--

   Inserted: (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

   Inserted: (2) by amending paragraph (4) to read as follows:

   Inserted: "(4) Special provisions relating to a violation of an injunction or certain orders.--

   Inserted: "(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.

   Inserted: "(B) Injunctions and orders.--Subparagraph (A) shall apply with respect to any action to enforce--

   Inserted: "(i) a Federal court injunction obtained pursuant to this title;

   Inserted: "(ii) an order entered or obtained by the Commission pursuant to this title that bars, suspends, places limitations on the activities or functions of, or prohibits the activities of, a person; or

   Inserted: "(iii) a cease-and-desist order entered by the Commission pursuant to section 9(f).".

   Inserted: (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--

   Inserted: (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

   Inserted: (2) by amending paragraph (4) to read as follows:

   Inserted: "(4) Special provisions relating to a violation of an injunction or certain orders.--

   Inserted: "(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.

   Inserted: "(B) Injunctions and orders.--Subparagraph (A) shall apply with respect to any action to enforce--

   Inserted: "(i) a Federal court injunction obtained pursuant to this title;

   Inserted: "(ii) an order entered or obtained by the Commission pursuant to this title that bars, suspends, places limitations on the activities or functions of, or prohibits the activities of, a person; or

   Inserted: "(iii) a cease-and-desist order entered by the Commission pursuant to section 203(k).".

   Original wording

   At the end, add the following:

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As printed