,,ii  #aacth ,,congress  #ast ,session  
,s4 #bhf  ,,in ,,the ,,senate ,,of ,,the
 ,,united ,,states  ,february #ab1 #bjac
 ,mr4 ,reed 7for himself1 ,mr4          
,grassley1 and ,mr4 ,leahy7 introduced  
the following bill2 which was read twice
 and referred to the ,committee on      
,banking1 ,housing1 and ,urban ,affairs 
,a ,,bill  ,to enhance civil penalties  
under the ,federal securities laws1 and 
for other purposes4  #a4 ,short title   
,this ,act may be cited as the ,stronger
 ,enforcement of ,civil ,penalties ,act 
of #bjac4  #b4 ,updated civil money     
penalties for securities laws violations
  7a7 ,securities ,act of #aicc  7#a7   
,money penalties in administrative      
actions ,section #h;,a7g77#b7 of the    
,securities ,act of #aicc 7#ae ,u4,s4,c4
 #gg;h-#a7;g77#b77 is amended--  7,a7 in
 subparagraph 7,a7--  7i7 by striking   
#g1ejj and inserting #aj1jjj2 and  7ii7 
by striking #ge1jjj and inserting       
#ajj1jjj2  7,b7 in subparagraph 7,b7--  
7i7 by striking #ge1jjj and inserting   

#ajj1jjj2 and  7ii7 by striking #cge1jjj
 and inserting #ejj1jjj2 and  7,c7 by   
amending subparagraph 7,c7 to read as   
follows3  7,c7 ,third tier              
,notwithstanding subparagraphs 7,a7 and 
7,b71 the amount of penalty for each    
such act or omission shall not exceed   
the greater of--  7i7 #a1jjj1jjj for a  
natural person or #aj1jjj1jjj for any   
other person2  7ii7 #c times the gross  
amount of pecuniary gain to the person  
who committed the act or omission2 or   
7iii7 the amount of losses incurred by  
victims as a result of the act or       
omission1 if--  7,i7 the act or omission
 described in paragraph 7#a7 involved   
fraud1 deceit1 manipulation1 or         
deliberate or reckless disregard of a   
regulatory requirement2 and  7,,ii7 such
 act or omission directly or indirectly 
resulted in--  7aa7 substantial losses  
or created a significant risk of        
substantial losses to other persons2 or 
7bb7 substantial pecuniary gain to the  
person who committed the act or         

omission4  4  7#b7 ,money penalties in  
civil actions ,section #bj7;d77#b7 of   
the ,securities ,act of #aicc 7#ae      
,u4,s4,c4 #ggt7d77#b77 is amended--     
7,a7 in subparagraph 7,a7--  7i7 by     
striking #e1jjj and inserting #aj1jjj2  
and  7ii7 by striking #ej1jjj and       
inserting #ajj1jjj2  7,b7 in            
subparagraph 7,b7--  7i7 by striking    
#ej1jjj and inserting #ajj1jjj2 and     
7ii7 by striking #bej1jjj and inserting 
#ejj1jjj2 and  7,c7 in subparagraph     
7,c71 by striking greater of 7i7        
#ajj1jjj for a natural person or        
#ejj1jjj for any other person1 or 7ii7  
the gross amount of pecuniary gain to   
such defendant as a result of the       
violation and inserting the following3  
greater of-- 7i7 #a1jjj1jjj for a       
natural person or #aj1jjj1jjj for any   
other person2  7ii7 #c times the gross  
amount of pecuniary gain to such        
defendant as a result of the violation2 
or  7iii7 the amount of losses incurred 
by victims as a result of the violation 

4  7b7 ,securities ,exchange ,act of    
#aicd  7#a7 ,money penalties in civil   
actions ,section #ba7;d77#c77;,b7 of the
 ,securities ,exchange ,act of #aicd    
7#ae ,u4,s4,c4 #ghu7d77#c77;,b77 is     
amended--  7,a7 in clause 7i7--  7i7 by 
striking #e1jjj and inserting #aj1jjj2  
and  7ii7 by striking #ej1jjj and       
inserting #ajj1jjj2  7,b7 in clause     
7ii7--  7i7 by striking #ej1jjj and     
inserting #ajj1jjj2 and  7ii7 by        
striking #bej1jjj and inserting         
#ejj1jjj2 and  7,c7 in clause 7iii71 by 
striking greater of 7,i7 #ajj1jjj for a 
natural person or #ejj1jjj for any other
 person1 or 7,,ii7 the gross amount of  
pecuniary gain to such defendant as a   
result of the violation and inserting   
the following3  greater of-- 7,i7       
#a1jjj1jjj for a natural person or      
#aj1jjj1jjj for any other person2       
7,,ii7 #c times the gross amount of     
pecuniary gain to such defendant as a   
result of the violation2 or  7,,iii7 the
 amount of losses incurred by victims as

 a result of the violation  4  7#b7     
,money penalties in administrative      
actions ,section #ba;,b7b7 of the       
,securities ,exchange ,act of #aicd 7#ae
 ,u4,s4,c4 #ghu-#b7;b77 is amended--    
7,a7 in paragraph 7#a7--  7i7 by        
striking #e1jjj and inserting #aj1jjj2  
and  7ii7 by striking #ej1jjj and       
inserting #ajj1jjj2  7,b7 in paragraph  
7#b7--  7i7 by striking #ej1jjj and     
inserting #ajj1jjj2 and  7ii7 by        
striking #bej1jjj and inserting         
#ejj1jjj2 and  7,c7 by amending         
paragraph 7#c7 to read as follows3  7#c7
 ,third tier ,notwithstanding paragraphs
 7#a7 and 7#b71 the amount of penalty   
for each such act or omission shall not 
exceed the greater of--  7,a7 #a1jjj1jjj
 for a natural person or #aj1jjj1jjj for
 any other person2  7,b7 #c times the   
gross amount of pecuniary gain to the   
person who committed the act or         
omission2 or  7,c7 the amount of losses 
incurred by victims as a result of the  
act or omission1 if--  7i7 the act or   

omission described in subsection 7a7    
involved fraud1 deceit1 manipulation1 or
 deliberate or reckless disregard of a  
regulatory requirement2 and  7ii7 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  
omission4  4  7c7 ,investment ,company  
,act of #aidj  7#a7 ,money penalties in 
administrative actions ,section         
#i7;d77#b7 of the ,investment ,company  
,act of #aidj 7#ae ,u4,s4,c4            
#hj;a-#i7;d77#b77 is amended--  7,a7 in 
subparagraph 7,a7--  7i7 by striking    
#e1jjj and inserting #aj1jjj2 and  7ii7 
by striking #ej1jjj and inserting       
#ajj1jjj2  7,b7 in subparagraph 7,b7--  
7i7 by striking #ej1jjj and inserting   
#ajj1jjj2 and  7ii7 by striking #bej1jjj
 and inserting #ejj1jjj2 and  7,c7 by   
amending subparagraph 7,c7 to read as   
follows3  7,c7 ,third tier              

,notwithstanding subparagraphs 7,a7 and 
7,b71 the amount of penalty for each    
such act or omission shall not exceed   
the greater of--  7i7 #a1jjj1jjj for a  
natural person or #aj1jjj1jjj for any   
other person2  7ii7 #c times the gross  
amount of pecuniary gain to the person  
who committed the act or omission2 or   
7iii7 the amount of losses incurred by  
victims as a result of the act or       
omission1 if--  7,i7 the act or omission
 described in paragraph 7#a7 involved   
fraud1 deceit1 manipulation1 or         
deliberate or reckless disregard of a   
regulatory requirement2 and  7,,ii7 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  
omission4  4  7#b7 ,money penalties in  
civil actions ,section #db7;e77#b7 of   
the ,investment ,company ,act of #aidj  
7#ae ,u4,s4,c4 #hj;a-#da7;e77#b77 is    

amended--  7,a7 in subparagraph 7,a7--  
7i7 by striking #e1jjj and inserting    
#aj1jjj2 and  7ii7 by striking #ej1jjj  
and inserting #ajj1jjj2  7,b7 in        
subparagraph 7,b7--  7i7 by striking    
#ej1jjj and inserting #ajj1jjj2 and     
7ii7 by striking #bej1jjj and inserting 
#ejj1jjj2 and  7,c7 in subparagraph     
7,c71 by striking greater of 7i7        
#ajj1jjj for a natural person or        
#ejj1jjj for any other person1 or 7ii7  
the gross amount of pecuniary gain to   
such defendant as a result of the       
violation and inserting the following3  
greater of-- 7i7 #a1jjj1jjj for a       
natural person or #aj1jjj1jjj for any   
other person2  7ii7 #c times the gross  
amount of pecuniary gain to such        
defendant as a result of the violation2 
or  7iii7 the amount of losses incurred 
by victims as a result of the violation 
4  7d7 ,investment ,advisers ,act of    
#aidj  7#a7 ,money penalties in         
administrative actions ,section         
#bjc7;i77#b7 of the ,investment         

,advisers ,act of #aidj 7#ae ,u4,s4,c4  
#hj;b-#c7;i77#b77 is amended--  7,a7 in 
subparagraph 7,a7--  7i7 by striking    
#e1jjj and inserting #aj1jjj2 and  7ii7 
by striking #ej1jjj and inserting       
#ajj1jjj2  7,b7 in subparagraph 7,b7--  
7i7 by striking #ej1jjj and inserting   
#ajj1jjj2 and  7ii7 by striking #bej1jjj
 and inserting #ejj1jjj2 and  7,c7 by   
amending subparagraph 7,c7 to read as   
follows3  7,c7 ,third tier              
,notwithstanding subparagraphs 7,a7 and 
7,b71 the amount of penalty for each    
such act or omission shall not exceed   
the greater of--  7i7 #a1jjj1jjj for a  
natural person or #aj1jjj1jjj for any   
other person2  7ii7 #c times the gross  
amount of pecuniary gain to the person  
who committed the act or omission2 or   
7iii7 the amount of losses incurred by  
victims as a result of the act or       
omission1 if--  7,i7 the act or omission
 described in paragraph 7#a7 involved   
fraud1 deceit1 manipulation1 or         
deliberate or reckless disregard of a   

regulatory requirement2 and  7,,ii7 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  
omission4  4  7#b7 ,money penalties in  
civil actions ,section #bji7;e77#b7 of  
the ,investment ,advisers ,act of #aidj 
7#ae ,u4,s4,c4 #hj;b-#i7;e77#b77 is     
amended--  7,a7 in subparagraph 7,a7--  
7i7 by striking #e1jjj and inserting    
#aj1jjj2 and  7ii7 by striking #ej1jjj  
and inserting #ajj1jjj2  7,b7 in        
subparagraph 7,b7--  7i7 by striking    
#ej1jjj and inserting #ajj1jjj2 and     
7ii7 by striking #bej1jjj and inserting 
#ejj1jjj2 and  7,c7 in subparagraph     
7,c71 by striking greater of 7i7        
#ajj1jjj for a natural person or        
#ejj1jjj for any other person1 or 7ii7  
the gross amount of pecuniary gain to   
such defendant as a result of the       
violation and inserting the following3  

greater of-- 7i7 #a1jjj1jjj for a       
natural person or #aj1jjj1jjj for any   
other person2  7ii7 #c times the gross  
amount of pecuniary gain to such        
defendant as a result of the violation2 
or  7iii7 the amount of losses incurred 
by victims as a result of the violation 
4  #c4 ,penalties for recidivists  7a7  
,securities ,act of #aicc  7#a7         
,cease-and-desist proceedings ,section  
#h;,a7g77#b7 of the ,securities ,act of 
#aicc 7#ae ,u4,s4,c4 #gg;h-#a7;g77#b77  
is amended by adding at the end the     
following3  7,d7 ,fourth tier           
,notwithstanding subparagraphs 7,a71    
7,b71 and 7,c71 the maximum amount of   
penalty for each such act or omission   
shall be #c times the otherwise         
applicable amount in such subparagraphs 
if1 within the #e-year period preceding 
such act or omission1 the person who    
committed the act or omission was       
criminally convicted for securities     
fraud or became subject to a judgment or
 order imposing monetary1 equitable1 or 

administrative relief in any ,commission
 action alleging fraud by that person4  
4  7#b7 ,injunctions and prosecution of 
offenses ,section #bj7;d77#b7 of the    
,securities ,act of #aicc 7#ae ,u4,s4,c4
 #ggt7d77#b77 is amended by adding at   
the end the following3  7,d7 ,fourth    
tier ,notwithstanding subparagraphs     
7,a71 7,b71 and 7,c71 the maximum amount
 of penalty for each such violation     
shall be #c times the otherwise         
applicable amount in such subparagraphs 
if1 within the #e-year period preceding 
such violation1 the defendant was       
criminally convicted for securities     
fraud or became subject to a judgment or
 order imposing monetary1 equitable1 or 
administrative relief in any ,commission
 action alleging fraud by that          
defendant4  4  7b7 ,securities exchange 
,act of #aicd  7#a7 ,civil actions      
,section #ba7;d77#c77;,b7 of the        
,securities ,exchange ,act of #aicd 7#ae
 ,u4,s4,c4 #ghu7d77#c77;,b77 is amended 
by adding at the end the following3     

7iv7 ,fourth tier ,notwithstanding      
clauses 7i71 7ii71 and 7iii71 the       
maximum amount of penalty for each such 
violation shall be #c times the         
otherwise applicable amount in such     
clauses if1 within the #e-year period   
preceding such violation1 the defendant 
was criminally convicted for securities 
fraud or became subject to a judgment or
 order imposing monetary1 equitable1 or 
administrative relief in any ,commission
 action alleging fraud by that          
defendant4  4  7#b7 ,administrative     
proceedings ,section #ba;,b7b7 of the   
,securities ,exchange ,act of #aicd 7#ae
 ,u4,s4,c4 #ghu-#b7;b77 is amended by   
adding at the end the following3  7#d7  
,fourth tier ,notwithstanding paragraphs
 7#a71 7#b71 and 7#c71 the maximum      
amount of penalty for each such act or  
omission shall be #c times the otherwise
 applicable amount in such paragraphs   
if1 within the #e-year period preceding 
such act or omission1 the person who    
committed the act or omission was       

criminally convicted for securities     
fraud or became subject to a judgment or
 order imposing monetary1 equitable1 or 
administrative relief in any ,commission
 action alleging fraud by that person4  
4  7c7 ,investment company ,act of #aidj
  7#a7 ,ineligibility of certain        
underwriters and affiliates ,section    
#i7;d77#b7 of the ,investment ,company  
,act of #aidj 7#ae ,u4,s4,c4            
#hj;a-#i7;d77#b77 is amended by adding  
at the end the following3  7,d7 ,fourth 
tier ,notwithstanding subparagraphs     
7,a71 7,b71 and 7,c71 the maximum amount
 of penalty for each such act or        
omission shall be #c times the otherwise
 applicable amount in such subparagraphs
 if1 within the #e-year period preceding
 such act or omission1 the person who   
committed the act or omission was       
criminally convicted for securities     
fraud or became subject to a judgment or
 order imposing monetary1 equitable1 or 
administrative relief in any ,commission
 action alleging fraud by that person4  

4  7#b7 ,enforcement ,section           
#db7;e77#b7 of the ,investment ,company 
,act of #aidj 7#ae ,u4,s4,c4            
#hj;a-#da7;e77#b77 is amended by adding 
at the end the following3  7,d7 ,fourth 
tier ,notwithstanding subparagraphs     
7,a71 7,b71 and 7,c71 the maximum amount
 of penalty for each such violation     
shall be #c times the otherwise         
applicable amount in such subparagraphs 
if1 within the #e-year period preceding 
such violation1 the defendant was       
criminally convicted for securities     
fraud or became subject to a judgment or
 order imposing monetary1 equitable1 or 
administrative relief in any ,commission
 action alleging fraud by that          
defendant4  4  7d7 ,investment advisers 
,act of #aidj ,the ,investment ,advisers
 ,act of #aidj 7#ae ,u4,s4,c4 #hj;b-#a  
et seq47 is amended--  7#a7 in section  
#bjc7;i77#b7 7#ae ,u4,s4,c4             
#hj;b-#c7;i77#b771 by adding at the end 
the following3  7,d7 ,fourth tier       
,notwithstanding subparagraphs 7,a71    

7,b71 and 7,c71 the maximum amount of   
penalty for each such act or omission   
shall be #c times the otherwise         
applicable amount in such subparagraphs 
if1 within the #e-year period preceding 
such act or omission1 the person who    
committed the act or omission was       
criminally convicted for securities     
fraud or became subject to a judgment or
 order imposing monetary1 equitable1 or 
administrative relief in any ,commission
 action alleging fraud by that person4  
2 and  7#b7 in section #bji7;e77#b7 7#ae
 ,u4,s4,c4 #hj;b-#i7;e77#b77 by adding  
at the end the following3  7,d7 ,fourth 
tier ,notwithstanding subparagraphs     
7,a71 7,b71 and 7,c71 the maximum amount
 of penalty for each such violation     
shall be #c times the otherwise         
applicable amount in such subparagraphs 
if1 within the #e-year period preceding 
such violation1 the defendant was       
criminally convicted for securities     
fraud or became subject to a judgment or
 order imposing monetary1 equitable1 or 

administrative relief in any ,commission
 action alleging fraud by that          
defendant4  4  #d4 ,violations of       
injunctions and bars  7a7 ,securities   
,act of #aicc ,section #bj7;d7 of the   
,securities ,act of #aicc 7#ae ,u4,s4,c4
 #ggt7d77 is amended--  7#a7 in         
paragraph 7#a71 by inserting after the  
rules or regulations thereunder1 the    
following3 a ,federal court injunction  
or a bar obtained or entered by the     
,commission under this title12 and  7#b7
 by amending paragraph 7#d7 to read as  
follows3  7#d7 ,special provisions      
relating to a violation of an injunction
 or certain orders  7,a7 ,in general    
,each separate violation of an          
injunction or order described in        
subparagraph 7,b7 shall be a separate   
offense1 except that in the case of a   
violation through a continuing failure  
to comply with such injunction or order1
 each day of the failure to comply with 
the injunction or order shall be deemed 
a separate offense4  7,b7 ,injunctions  

and orders ,subparagraph 7,a7 shall     
apply with respect to any action to     
enforce--  7i7 a ,federal court         
injunction obtained pursuant to this    
title2  7ii7 an order entered or        
obtained by the ,commission pursuant to 
this title that bars1 suspends1 places  
limitations on the activities or        
functions of1 or prohibits the          
activities of1 a person2 or  7iii7 a    
cease-and-desist order entered by the   
,commission pursuant to section #h;,a4  
4  7b7 ,securities exchange ,act of     
#aicd ,section #ba7;d77#c7 of the       
,securities ,exchange ,act of #aicd 7#ae
 ,u4,s4,c4 #ghu7d77#c77 is amended--    
7#a7 in subparagraph 7,a71 by inserting 
after the rules or regulations          
thereunder1 the following3 a ,federal   
court injunction or a bar obtained or   
entered by the ,commission under this   
title12 and  7#b7 by amending           
subparagraph 7,d7 to read as follows3   
7,d7 ,special provisions relating to a  
violation of an injunction or certain   

orders  7i7 ,in general ,each separate  
violation of an injunction or order     
described in clause 7ii7 shall be a     
separate offense1 except that in the    
case of a violation through a continuing
 failure to comply with such injunction 
or order1 each day of the failure to    
comply with the injunction or order     
shall be deemed a separate offense4     
7ii7 ,injunctions and orders ,clause 7i7
 shall apply with respect to an action  
to enforce--  7,i7 a ,federal court     
injunction obtained pursuant to this    
title2  7,,ii7 an order entered or      
obtained by the ,commission pursuant to 
this title that bars1 suspends1 places  
limitations on the activities or        
functions of1 or prohibits the          
activities of1 a person2 or  7,,iii7 a  
cease-and-desist order entered by the   
,commission pursuant to section #ba;,c4 
4  7c7 ,investment company ,act of #aidj
 ,section #db7;e7 of the ,investment    
,company ,act of #aidj 7#ae ,u4,s4,c4   
#hj;a-#da7;e77 is amended--  7#a7 in    

paragraph 7#a71 by inserting after the  
rules or regulations thereunder1 the    
following3 a ,federal court injunction  
or a bar obtained or entered by the     
,commission under this title12 and  7#b7
 by amending paragraph 7#d7 to read as  
follows3  7#d7 ,special provisions      
relating to a violation of an injunction
 or certain orders  7,a7 ,in general    
,each separate violation of an          
injunction or order described in        
subparagraph 7,b7 shall be a separate   
offense1 except that in the case of a   
violation through a continuing failure  
to comply with such injunction or order1
 each day of the failure to comply with 
the injunction or order shall be deemed 
a separate offense4  7,b7 ,injunctions  
and orders ,subparagraph 7,a7 shall     
apply with respect to any action to     
enforce--  7i7 a ,federal court         
injunction obtained pursuant to this    
title2  7ii7 an order entered or        
obtained by the ,commission pursuant to 
this title that bars1 suspends1 places  

limitations on the activities or        
functions of1 or prohibits the          
activities of1 a person2 or  7iii7 a    
cease-and-desist order entered by the   
,commission pursuant to section #i7;f74 
4  7d7 ,investment advisers ,act of     
#aidj ,section #bji7;e7 of the          
,investment ,advisers ,act of #aidj 7#ae
 ,u4,s4,c4 #hj;b-#i7;e77 is amended--   
7#a7 in paragraph 7#a71 by inserting    
after the rules or regulations          
thereunder1 the following3 a ,federal   
court injunction or a bar obtained or   
entered by the ,commission under this   
title12 and  7#b7 by amending paragraph 
7#d7 to read as follows3  7#d7 ,special 
provisions relating to a violation of an
 injunction or certain orders  7,a7 ,in 
general ,each separate violation of an  
injunction or order described in        
subparagraph 7,b7 shall be a separate   
offense1 except that in the case of a   
violation through a continuing failure  
to comply with such injunction or order1
 each day of the failure to comply with 

the injunction or order shall be deemed 
a separate offense4  7,b7 ,injunctions  
and orders ,subparagraph 7,a7 shall     
apply with respect to any action to     
enforce--  7i7 a ,federal court         
injunction obtained pursuant to this    
title2  7ii7 an order entered or        
obtained by the ,commission pursuant to 
this title that bars1 suspends1 places  
limitations on the activities or        
functions of1 or prohibits the          
activities of1 a person2 or  7iii7 a    
cease-and-desist order entered by the   
,commission pursuant to section #bjc7k74
  4