,,ib ,union ,calendar ,no4 #cca #aafth ,,congress #b;d ,session ,h4 ,r4 #cfda ,report ,no4 #aaf-daj ,,in ,,the ,,house ,,of ,,representatives ,july #i1 #bjai,ms4 ,porter introduced the following bill2 which was referred to the ,committee on ,financial ,services ,february #bg1 #bjbj,reported with an amendment2 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 bill1 see copy of bill as introduced on ,july #i1 #bjai ,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 #bjai4 #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 striking subparagraph 7,c7 and inserting the following3 7,c7 ,third tier 7i7 ,in general ,notwithstanding subparagraphs 7,a7 and 7,b71 for a third tier act or omission1 the amount of penalty for each such act or omission shall not exceed the 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 the person who committed the act or omission2 or 7,,iii7 the amount of losses incurred by victims as a result of the act or omission4 7ii7 ,third tier act or omission ,for the purposes of this subparagraph1 the term third tier act or omission means an act or omission described in paragraph 7#a7 that-- 7,i7 involved fraud1 deceit1 manipulation1 or deliberate or reckless disregard of a regulatory requirement2 and 7,,ii7 directly or indirectly-- 7aa7 resulted in substantial losses to other persons2 7bb7 created a significant risk of substantial losses to other persons2 or 7cc7 resulted in 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 by striking subparagraph 7,c7 and inserting the following3 7,c7 ,third tier 7i7 ,in general ,notwithstanding subparagraphs 7,a7 and 7,b71 for a third tier violation1 the amount of penalty for each violation shall not exceed the 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 the person who committed the violation2 or 7,,iii7 the amount of losses incurred by victims as a result of the violation4 7ii7 ,third tier violation ,for the purposes of this subparagraph1 the term third tier violation means a violation described in paragraph 7#a7 that-- 7,i7 involved fraud1 deceit1 manipulation1 or deliberate or reckless disregard of a regulatory requirement2 and 7,,ii7 directly or indirectly-- 7aa7 resulted in substantial losses to other persons2 7bb7 created a significant risk of substantial losses to other persons2 or 7cc7 resulted in substantial pecuniary gain to the person who committed the violation4 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 by striking clause 7iii7 and inserting the following3 7iii7 ,third tier 7,i7 ,in general ,notwithstanding clauses 7i7 and 7ii71 for a third tier violation1 the amount of penalty for each such violation shall not exceed the greater of-- 7aa7 #a1jjj1jjj for a natural person or #aj1jjj1jjj for any other person2 7bb7 #c times the gross amount of pecuniary gain to the person who committed the violation2 or 7cc7 the amount of losses incurred by victims as a result of the violation4 7,,ii7 ,third tier violation ,for the purposes of this clause1 the term third tier violation means a violation described in subparagraph 7,a7 that-- 7aa7 involved fraud1 deceit1 manipulation1 or deliberate or reckless disregard of a regulatory requirement2 and 7bb7 directly or indirectly-- 7,,aa7 resulted in substantial losses to other persons2 7,,bb7 created a significant risk of substantial losses to other persons2 or 7,,cc7 resulted in substantial pecuniary gain to the person who committed the violation4 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 striking paragraph 7#c7 and inserting the following3 7#c7 ,third tier 7,a7 ,in general ,notwithstanding paragraphs 7#a7 and 7#b71 for a third tier act or omission1 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 omission4 7,b7 ,third tier act or omission ,for the purposes of this paragraph1 the term third tier act or omission means an act or omission described in paragraph 7#a7 that-- 7i7 involved fraud1 deceit1 manipulation1 or deliberate or reckless disregard of a regulatory requirement2 and 7ii7 directly or indirectly-- 7,i7 resulted in substantial losses to other persons2 7,,ii7 created a significant risk of substantial losses to other persons2 or 7,,iii7 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 striking subparagraph 7,c7 and inserting the following3 7,c7 ,third tier 7i7 ,in general ,notwithstanding subparagraphs 7,a7 and 7,b71 for a third tier act or omission1 the amount of penalty for each such act or omission shall not exceed the 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 the person who committed the act or omission2 or 7,,iii7 the amount of losses incurred by victims as a result of the act or omission4 7ii7 ,third tier act or omission ,for the purposes of this subparagraph1 the term third tier act or omission means an act or omission described in paragraph 7#a7 that-- 7,i7 involved fraud1 deceit1 manipulation1 or deliberate or reckless disregard of a regulatory requirement2 and 7,,ii7 directly or indirectly-- 7aa7 resulted in substantial losses to other persons2 7bb7 created a significant risk of substantial losses to other persons2 or 7cc7 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 by striking subparagraph 7,c7 and inserting the following3 7,c7 ,third tier 7i7 ,in general ,notwithstanding subparagraphs 7,a7 and 7,b71 for a third tier violation1 the amount of penalty for each such violation shall not exceed the 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 the person who committed the violation2 or 7,,iii7 the amount of losses incurred by victims as a result of the violation4 7ii7 ,third tier violation ,for the purposes of this subparagraph1 the term third tier violation means a violation described in paragraph 7#a7 that-- 7,i7 involved fraud1 deceit1 manipulation1 or deliberate or reckless disregard of a regulatory requirement2 and 7,,ii7 directly or indirectly-- 7aa7 resulted in substantial losses to other persons2 7bb7 created a significant risk of substantial losses to other persons2 or 7cc7 resulted in substantial pecuniary gain to the person who committed the violation4 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 striking subparagraph 7,c7 and inserting the following3 7,c7 ,third tier 7i7 ,in general ,notwithstanding subparagraphs 7,a7 and 7,b71 for a third tier act or omission1 the amount of penalty for each such act or omission shall not exceed the 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 the person who committed the act or omission2 or 7,,iii7 the amount of losses incurred by victims as a result of the act or omission4 7ii7 ,third tier act or omission ,for the purposes of this subparagraph1 the term third tier act or omission means an act or omission described in paragraph 7#a7 that-- 7,i7 involved fraud1 deceit1 manipulation1 or deliberate or reckless disregard of a regulatory requirement2 and 7,,ii7 directly or indirectly-- 7aa7 resulted in substantial losses to other persons2 7bb7 created a significant risk of substantial losses to other persons2 or 7cc7 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 by striking subparagraph 7,c7 and inserting the following3 7,c7 ,third tier 7i7 ,in general ,notwithstanding subparagraphs 7,a7 and 7,b71 for a third tier violation1 the amount of penalty for each such violation shall not exceed the 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 the person who committed the violation2 or 7,,iii7 the amount of losses incurred by victims as a result of the violation4 7ii7 ,third tier violation ,for the purposes of this subparagraph1 the term third tier violation means a violation described in paragraph 7#a7 that-- 7,i7 involved fraud1 deceit1 manipulation1 or deliberate or reckless disregard of a regulatory requirement2 and 7,,ii7 directly or indirectly-- 7aa7 resulted in substantial losses to other persons2 7bb7 created a significant risk of substantial losses to other persons2 or 7cc7 resulted in substantial pecuniary gain to the person who committed the violation4 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 of certain actions ,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 striking paragraph 7#d7 and inserting the following3 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 of 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 striking subparagraph 7,d7 and inserting the following3 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 of 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 striking paragraph 7#d7 and inserting the following3 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 of 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 striking paragraph 7#d7 and inserting the following3 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 of a person2 or 7iii7 a cease-and-desist order entered by the ,commission pursuant to section #bjc7k74 4 ,february #bg1 #bjbj,reported with an amendment2 committed to the ,committee of the ,whole ,house on the ,state of the ,union and ordered to be printed