(a) Commission authority to assess money penalties.
(1) In any proceeding instituted pursuant
to sections 15(b)(4), 15(b)(6), 15D, 15B, 15C, 15E, or 17A 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, the Investment Company
Act of 1940, the Investment Advisers Act of 1940, or this title, or
the rules or regulations thereunder, or the rules of the Municpal
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 title, 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
(D) has failed reasonably to supervise,
within the meaning of section 15(b)(4)(E) of this title, with a view
to preventing violations of the provisions of such statutes, rules
and regulations, another person who commits such a violation, if such
other person is subject to his supervision.
(2) In any proceeding instituted
under section 21C 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—
(A) is
violating or has violated any provision of this title, or any rule
or regulation issued under this title; or
(B) is or was a cause of the violation
of any provision of this title, or any rule or regulation issued under
this title.
5-224.76
(b) Maximum amount of penalty.
(1) The maximum amount of penalty for each
act or omission described in subsection (a) shall be $5,000 for a
natural person or $50,000 for any other person.
(2) 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) involved fraud, deceit, manipulation,
or deliberate or reckless disregard of a regulatory requirement.
(3) 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—
(A) the act or omission described in
subsection (a) involved fraud, deceit, manipulation, or deliberate
or reckless disregard of a regulatory requirement; and
(B) 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.
5-224.77
(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;
(2) the harm to other persons
resulting either directly or indirectly from such act or omission;
(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 15(B)(4)(B) of this title;
(5) the need to deter such person and other
persons from committing such acts or omissions; and
(6) such other matters as justice may require.
5-224.78
(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.
5-224.79
(e) Authority to enter an order requiring
an 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.
(1) Any clearing agency that knowingly
or recklessly evades or participates in or facilitates an evasion
of the requirements of section 3C shall be liable for a civil money
penalty in twice the amount otherwise available for a violation of
section 3C.
(2) 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 3C shall be liable for a
civil money penalty in twice the amount otherwise available for a
violation of section 3C.
[15 USC 78u-2. As added
by act of Oct. 15, 1990 (104 Stat. 937) and amended by acts of July
30, 2002 (116 Stat. 793); Sept. 29, 2006 (120 Stat. 1337); and July
21, 2010 (124 Stat. 1802, 1863).]
