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15 U.S.C. § 78u–1 — Civil penalties for insider trading
Federal law — U.S. Code and appendices · legal_authorities
**(a) Authority to impose civil penalties**
(1) **Judicial actions by Commission authorized** — Whenever it shall appear to the Commission that any person has violated any provision of this chapter or the rules or regulations thereunder by purchasing or selling a security or security-based swap agreement while in possession of material, nonpublic information in, or has violated any such provision by communicating such information in connection with, a transaction on or through the facilities of a national securities exchange or from or through a broker or dealer, and which is not part of a public offering by an issuer of securities other than standardized options or security futures products, the Commission—
(A) may bring an action in a United States district court to seek, and the court shall have jurisdiction to impose, a civil penalty to be paid by the person who committed such violation; and
(B) may, subject to subsection (b)(1), bring an action in a United States district court to seek, and the court shall have jurisdiction to impose, a civil penalty to be paid by a person who, at the time of the violation, directly or indirectly controlled the person who committed such violation.
(2) **Amount of penalty for person who committed violation** — The amount of the penalty which may be imposed on the person who committed such violation shall be determined by the court in light of the facts and circumstances, but shall not exceed three times the profit gained or loss avoided as a result of such unlawful purchase, sale, or communication.
(3) **Amount of penalty for controlling person** — The amount of the penalty which may be imposed on any person who, at the time of the violation, directly or indirectly controlled the person who committed such violation, shall b
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Stable record: federal_law:legal_authorities:record_usc_0d6ad6c90ba35a6f840a0897
Source file: Laws/federal/codes/united-states-code/title-15/section-78u1-civil-penalties-for-insider-trading--fa9c475c4b.md
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Source location: Title 15, Chapter 2B, § 78u–1; chapter-2b-securities-exchanges.md
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**(a) Authority to impose civil penalties**
(1) **Judicial actions by Commission authorized** — Whenever it shall appear to the Commission that any person has violated any provision of this chapter or the rules or regulations thereunder by purchasing or selling a security or security-based swap agreement while in possession of material, nonpublic information in, or has violated any such provision by communicating such information in connection with, a transaction on or through the facilities of a national securities exchange or from or through a broker or dealer, and which is not part of a public offering by an issuer of securities other than standardized options or security futures products, the Commission—
(A) may bring an action in a United States district court to seek, and the court shall have jurisdiction to impose, a civil penalty to be paid by the person who committed such violation; and
(B) may, subject to subsection (b)(1), bring an action in a United States district court to seek, and the court shall have jurisdiction to impose, a civil penalty to be paid by a person who, at the time of the violation, directly or indirectly controlled the person who committed such violation.
(2) **Amount of penalty for person who committed violation** — The amount of the penalty which may be imposed on the person who committed such violation shall be determined by the court in light of the facts and circumstances, but shall not exceed three times the profit gained or loss avoided as a result of such unlawful purchase, sale, or communication.
(3) **Amount of penalty for controlling person** — The amount of the penalty which may be imposed on any person who, at the time of the violation, directly or indirectly controlled the person who committed such violation, shall be determined by the court in light of the facts and circumstances, but shall not exceed the greater of $1,000,000, or three times the amount of the profit gained or loss avoided as a result of such controlled person’s violation. If such controlled person’s violation was a violation by communication, the profit gained or loss avoided as a result of the violation shall, for purposes of this paragraph only, be deemed to be limited to the profit gained or loss avoided by the person or persons to whom the controlled person directed such communication.
**(b) Limitations on liability**
(1) **Liability of controlling persons** — No controlling person shall be subject to a penalty under subsection (a)(1)(B) unless the Commission establishes that—
(A) such controlling person knew or recklessly disregarded the fact that such controlled person was likely to engage in the act or acts constituting the violation and failed to take appropriate steps to prevent such act or acts before they occurred; or
(B) such controlling person knowingly or recklessly failed to establish, maintain, or enforce any policy or procedure required under section 78o(f) 11 See References in Text note below. of this title or [section 80b–4a of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section80b-4a&num=0&edition=prelim) and such failure substantially contributed to or permitted the occurrence of the act or acts constituting the violation.
(2) **Additional restrictions on liability** — No person shall be subject to a penalty under subsection (a) solely by reason of employing another person who is subject to a penalty under such subsection, unless such employing person is liable as a controlling person under paragraph (1) of this subsection. [Section 78t(a) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section78t/a&num=0&edition=prelim) shall not apply to actions under subsection (a) of this section.
**(c) Authority of Commission** The Commission, by such rules, regulations, and orders as it considers necessary or appropriate in the public interest or for the protection of investors, may exempt, in whole or in part, either unconditionally or upon specific terms and conditions, any person or transaction or class of persons or transactions from this section.
**(d) Procedures for collection**
(1) **Payment of penalty to Treasury** — A penalty imposed under this section shall be payable into the Treasury of the United States, except as otherwise provided in [section 7246 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section7246&num=0&edition=prelim) and [section 78u–6 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section78u-6&num=0&edition=prelim).
(2) **Collection of penalties** — If a person upon whom such a penalty is imposed shall fail to pay such penalty within the time prescribed in the court’s order, the Commission may refer the matter to the Attorney General who shall recover such penalty by action in the appropriate United States district court.
(3) **Remedy not exclusive** — The actions authorized by this section may be brought in addition to any other actions that the Commission or the Attorney General are entitled to bring.
(4) **Jurisdiction and venue** — For purposes of [section 78aa of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section78aa&num=0&edition=prelim), actions under this section shall be actions to enforce a liability or a duty created by this chapter.
(5) **Statute of limitations** — No action may be brought under this section more than 5 years after the date of the purchase or sale. This section shall not be construed to bar or limit in any manner any action by the Commission or the Attorney General under any other provision of this chapter, nor shall it bar or limit in any manner any action to recover penalties, or to seek any other order regarding penalties, imposed in an action commenced within 5 years of such transaction.
**(e) Definition** For purposes of this section, “profit gained” or “loss avoided” is the difference between the purchase or sale price of the security and the value of that security as measured by the trading price of the security a reasonable period after public dissemination of the nonpublic information.
**(f) Limitation on Commission authority** The authority of the Commission under this section with respect to security-based swap agreements shall be subject to the restrictions and limitations of [section 78c–1(b) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section78c–1/b&num=0&edition=prelim).
**(g) Duty of Members and employees of Congress**
(1) **In general** — Subject to the rule of construction under section 10 of the STOCK Act and solely for purposes of the insider trading prohibitions arising under this chapter, including [section 78j(b) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section78j/b&num=0&edition=prelim) and Rule 10b–5 thereunder, each Member of Congress or employee of Congress owes a duty arising from a relationship of trust and confidence to the Congress, the United States Government, and the citizens of the United States with respect to material, nonpublic information derived from such person’s position as a Member of Congress or employee of Congress or gained from the performance of such person’s official responsibilities.
(2) **Definitions** — In this subsection—
(A) the term “Member of Congress” means a member of the Senate or House of Representatives, a Delegate to the House of Representatives, and the Resident Commissioner from Puerto Rico; and
(B) the term “employee of Congress” means—
(i) any individual (other than a Member of Congress), whose compensation is disbursed by the Secretary of the Senate or the Chief Administrative Officer of the House of Representatives; and
(ii) any other officer or employee of the legislative branch (as defined in [section 13101(11) of title 5](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title5-section13101/11&num=0&edition=prelim)).
(3) **Rule of construction** — Nothing in this subsection shall be construed to impair or limit the construction of the existing antifraud provisions of the securities laws or the authority of the Commission under those provisions.
**(h) Duty of other Federal officials**
(1) **In general** — Subject to the rule of construction under section 10 of the STOCK Act and solely for purposes of the insider trading prohibitions arising under this chapter, including [section 78j(b) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section78j/b&num=0&edition=prelim), and Rule 10b–5 thereunder, each executive branch employee, each judicial officer, and each judicial employee owes a duty arising from a relationship of trust and confidence to the United States Government and the citizens of the United States with respect to material, nonpublic information derived from such person’s position as an executive branch employee, judicial officer, or judicial employee or gained from the performance of such person’s official responsibilities.
(2) **Definitions** — In this subsection—
(A) the term “executive branch employee”—
(i) has the meaning given the term “employee” under [section 2105 of title 5](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title5-section2105&num=0&edition=prelim);
(ii) includes—
(I) the President;
(II) the Vice President; and
(III) an employee of the United States Postal Service or the Postal Regulatory Commission;
(B) the term “judicial employee” has the meaning given that term in [section 13101(9) of title 5](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title5-section13101/9&num=0&edition=prelim); and
(C) the term “judicial officer” has the meaning given that term under [section 13101(10) of title 5](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title5-section13101/10&num=0&edition=prelim).
(3) **Rule of construction** — Nothing in this subsection shall be construed to impair or limit the construction of the existing antifraud provisions of the securities laws or the authority of the Commission under those provisions.
**(i) Participation in initial public offerings** An individual described in [section 13103(f) of title 5](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title5-section13103/f&num=0&edition=prelim) may not purchase securities that are the subject of an initial public offering (within the meaning given such term in section 78l(f)(1)(G)(i) of this title) in any manner other than is available to members of the public generally.
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Federal law — U.S. Code and appendices · legal_authorities
**(a)** For the purpose of this title, “employee”, except as otherwise provided by this section or when specifically modified, means an officer and an individual who is—
(1) appointed in the civil service by one of the following acting in an official capacity—
(A) the President;
(B) a Member or Members of Congress, or the Congress;
(C) a member of a uniformed service;
(D) an individual who is an employee under this section;
(E) the head of a Government controlled corporation; or
(F) an adjutant general designated by the Secretary concerned under [section 709(c) of title 32](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title32-section709/c&num=0&edition=prelim);
(2) engaged in the performance of a Federal function under authority of law or an Executive act; and
(3) subject to the supervision of an individual named by paragraph (1) of this subsection while engaged in the performance of the duties of his position.
**(b)** An individual who is employed at the United States Naval Academy in the midshipmen’s laundry, the midshipmen’s tailor shop, the midshipmen’s cobbler and barber shops, and the midshipmen’s store, except an individual employed by the Academy dairy (if any), and whose employment in such a position began before October 1, 1996, and has been uninterrupted in such a position since that date is deemed an employee.
**(c)** An employee paid from nonappropriated funds of the Army and Air Force Exchange Service, Navy Ships Stores Program, Navy exchanges, Marine Corps exchanges, Coast Guard exchanges, and other instrumentalities of the United States under the jurisdiction of the armed forces conducted for the comfort, pleasure, contentment, and mental and physical improvement of personnel of the armed forces is deemed not an emp
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Federal law — U.S. Code and appendices · legal_authorities
**(a) In general** The Secretary is authorized to promulgate regulations to implement and administer the grant programs and undertakings authorized by this subchapter.
**(b) Regulatory authority** Regulations prescribed under this section may contain such classifications, differentiations, or other provisions, and may provide for such adjustments and exceptions for any class of grant programs, undertakings, or eligible entities, as, in the judgment of the Secretary, are necessary or proper to effectuate the purposes of this subchapter, to prevent circumvention or evasion of this subchapter, or to facilitate compliance with this subchapter.
Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 5301
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Federal law — U.S. Code and appendices · legal_authorities
This chapter may be cited as the “Securities Exchange Act of 1934.”
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Federal law — U.S. Code and appendices · legal_authorities
In this subchapter:
(1) **Congressional ethics committees.—** — The term “congressional ethics committees” means the Select Committee on Ethics of the Senate and the Committee on Ethics of the House of Representatives.
(2) **Dependent child.—** — The term “dependent child” means, when used with respect to any reporting individual, any individual who is a son, daughter, stepson, or stepdaughter and who—
(A) is unmarried and under age 21 and is living in the household of such reporting individual; or
(B) is a dependent of such reporting individual within the meaning of section 152 of the Internal Revenue Code of 1986 ([26 U.S.C. 152](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section152&num=0&edition=prelim)).
(3) **Designated agency ethics official.—** — The term “designated agency ethics official” means an officer or employee who is designated to administer the provisions of this subchapter within an agency.
(4) **Executive branch.—** — The term “executive branch” includes each Executive agency (as defined in [section 105 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title5-section105&num=0&edition=prelim)), other than the Government Accountability Office, and any other entity or administrative unit in the executive branch.
(5) **Gift.—** — The term “gift” means a payment, advance, forbearance, rendering, or deposit of money, or any thing of value, unless consideration of equal or greater value is received by the donor, but does not include—
(A) bequest and other forms of inheritance;
(B) suitable mementos of a function honoring the reporting individual;
(C) food, lodging, transportation, and entertainment provided by a foreign government within a foreign country or by the United States Governme
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Prohibition of insider trading during pension fund blackout periods**
(1) **In general** — Except to the extent otherwise provided by rule of the Commission pursuant to paragraph (3), it shall be unlawful for any director or executive officer of an issuer of any equity security (other than an exempted security), directly or indirectly, to purchase, sell, or otherwise acquire or transfer any equity security of the issuer (other than an exempted security) during any blackout period with respect to such equity security if such director or officer acquires such equity security in connection with his or her service or employment as a director or executive officer.
(2) **Remedy**
(A) *In general* — Any profit realized by a director or executive officer referred to in paragraph (1) from any purchase, sale, or other acquisition or transfer in violation of this subsection shall inure to and be recoverable by the issuer, irrespective of any intention on the part of such director or executive officer in entering into the transaction.
(B) *Actions to recover profits* — An action to recover profits in accordance with this subsection may be instituted at law or in equity in any court of competent jurisdiction by the issuer, or by the owner of any security of the issuer in the name and in behalf of the issuer if the issuer fails or refuses to bring such action within 60 days after the date of request, or fails diligently to prosecute the action thereafter, except that no such suit shall be brought more than 2 years after the date on which such profit was realized.
(3) **Rulemaking authorized** — The Commission shall, in consultation with the Secretary of Labor, issue rules to clarify the application of this subsection and to prevent evasion thereof. Such rules shall pro
Source: Supplied U.S. Code snapshot — release unconfirmed · 15 U.S.C. § 7246
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Information required in registration statement**
(1) **In general** — The registration statement, when relating to a security other than a security issued by a foreign government, or political subdivision thereof, shall contain the information, and be accompanied by the documents, specified in Schedule A of [section 77aa of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section77aa&num=0&edition=prelim), and when relating to a security issued by a foreign government, or political subdivision thereof, shall contain the information, and be accompanied by the documents, specified in Schedule B of [section 77aa of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section77aa&num=0&edition=prelim); except that the Commission may by rules or regulations provide that any such information or document need not be included in respect of any class of issuers or securities if it finds that the requirement of such information or document is inapplicable to such class and that disclosure fully adequate for the protection of investors is otherwise required to be included within the registration statement. If any accountant, engineer, or appraiser, or any person whose profession gives authority to a statement made by him, is named as having prepared or certified any part of the registration statement, or is named as having prepared or certified a report or valuation for use in connection with the registration statement, the written consent of such person shall be filed with the registration statement. If any such person is named as having prepared or certified a report or valuation (other than a public official document or statement) which is used in connection with the registration statement, but is not named as h
Source: Supplied U.S. Code snapshot — release unconfirmed · 15 U.S.C. § 77g
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Definitions** When used in this subchapter, unless the context otherwise requires—
(1) The term “security” means any note, stock, treasury stock, security future, security-based swap, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a “security”, or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing.
(2) The term “person” means an individual, a corporation, a partnership, an association, a joint-stock company, a trust, any unincorporated organization, or a government or political subdivision thereof. As used in this paragraph the term “trust” shall include only a trust where the interest or interests of the beneficiary or beneficiaries are evidenced by a security.
(3) The term “sale” or “sell” shall include every contract of sale or disposition of a security or interest in a security, for value. The term “offer to sell”, “offer for sale”, or “offer” shall include every attempt or offer to dispose of, or solicitation of an offer to buy, a security or interes
Source: Supplied U.S. Code snapshot — release unconfirmed · 15 U.S.C. § 77b
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Federal law — U.S. Code and appendices · legal_authorities
**(a) In general** The district courts of the United States and the United States courts of any Territory or other place subject to the jurisdiction of the United States shall have exclusive jurisdiction of violations of this chapter or the rules and regulations thereunder, and of all suits in equity and actions at law brought to enforce any liability or duty created by this chapter or the rules and regulations thereunder. Any criminal proceeding may be brought in the district wherein any act or transaction constituting the violation occurred. Any suit or action to enforce any liability or duty created by this chapter or rules and regulations thereunder, or to enjoin any violation of such chapter or rules and regulations, may be brought in any such district or in the district wherein the defendant is found or is an inhabitant or transacts business, and process in such cases may be served in any other district of which the defendant is an inhabitant or wherever the defendant may be found. In any action or proceeding instituted by the Commission under this chapter in a United States district court for any judicial district, a subpoena issued to compel the attendance of a witness or the production of documents or tangible things (or both) at a hearing or trial may be served at any place within the United States. Rule 45(c)(3)(A)(ii) of the Federal Rules of Civil Procedure shall not apply to a subpoena issued under the preceding sentence. Judgments and decrees so rendered shall be subject to review as provided in sections 1254, 1291, 1292, and 1294 of title 28. No costs shall be assessed for or against the Commission in any proceeding under this chapter brought by or against it in the Supreme Court or such other courts.
**(b) Extraterritorial jurisdiction** The district co
Source: Supplied U.S. Code snapshot — release unconfirmed · 15 U.S.C. § 78aa
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