15 U.S.C. § 77s — Special powers of Commission

Page 158 TITLE 15—COMMERCE AND TRADE § 77s ties or real estate to the same extent as any ob- ligation issued by or guaranteed as to principal and interest by the United States or any agency or instrumentality thereof. Any State may, prior to the expiration of seven years after Octo- ber 3, 1984, enact a statute that specifically re- fers to this section and requires registration or qualification of any such security on terms that differ from those applicable to any obligation issued by the United States. (d) Implementation (1) Limitation The provisions of subsections (a) and (b) con- cerning small business related securities shall not apply with respect to a particular person, trust, corporation, partnership, association, business trust, or business entity or class thereof in any State that, prior to the expira- tion of 7 years after September 23, 1994, enacts a statute that specifically refers to this sec- tion and either prohibits or provides for a more limited authority to purchase, hold, or invest in such small business related securi- ties by any person, trust, corporation, partner- ship, association, business trust, or business entity or class thereof than is provided in this section. The enactment by any State of any statute of the type described in the preceding sentence shall not affect the validity of any contractual commitment to purchase, hold, or invest that was made prior to such enactment, and shall not require the sale or other disposi- tion of any small business related securities acquired prior to the date of such enactment. (2) State registration or qualification require- ments Any State may, not later than 7 years after September 23, 1994, enact a statute that spe- cifically refers to this section and requires registration or qualification of any small busi- ness related securities on terms that differ from those applicable to any obligation issued by the United States. (Pub. L. 98–440, title I, § 106, Oct. 3, 1984, 98 Stat. 1691; Pub. L. 103–325, title II, § 207, Sept. 23, 1994, 108 Stat. 2199.) Editorial Notes REFERENCES IN TEXT Section 77d(5) of this title, referred to in subsecs. (a)(1)(A), (2)(A) and (c), was redesignated section 77d(a)(5) of this title by Pub. L. 112–106, title II, § 201(b)(1), (c)(1), Apr. 5, 2012, 126 Stat. 314. CODIFICATION Section was enacted as part of the Secondary Mort- gage Market Enhancement Act of 1984, and not as part of the Securities Act of 1933, which comprises this sub- chapter. AMENDMENTS 1994—Subsec. (a)(1)(B) to (D). Pub. L. 103–325, § 207(a), struck out ‘‘or’’ at end of subpar. (B), added subpar. (C), and redesignated former subpar. (C) as (D). Subsec. (a)(2)(B) to (D). Pub. L. 103–325, § 207(b), struck out ‘‘or’’ at end of subpar. (B), added subpar. (C), and redesignated former subpar. (C) as (D). Subsec. (c). Pub. L. 103–325, § 207(c), in first sentence substituted ‘‘, that’’ for ‘‘or that’’ before ‘‘are mort- gage related securities’’ and inserted ‘‘, or that are small business related securities (as defined in section 78c(a)(53) of this title)’’ before ‘‘shall be exempt’’. Subsec. (d). Pub. L. 103–325, § 207(d), added subsec. (d). § 77s. Special powers of Commission (a) Rules and regulations The Commission shall have authority from time to time to make, amend, and rescind such rules and regulations as may be necessary to carry out the provisions of this subchapter, in- cluding rules and regulations governing reg- istration statements and prospectuses for var- ious classes of securities and issuers, and defin- ing accounting, technical, and trade terms used in this subchapter. Among other things, the Commission shall have authority, for the pur- poses of this subchapter, to prescribe the form or forms in which required information shall be set forth, the items or details to be shown in the balance sheet and earning statement, and the methods to be followed in the preparation of ac- counts, in the appraisal or valuation of assets and liabilities, in the determination of deprecia- tion and depletion, in the differentiation of re- curring and nonrecurring income, in the dif- ferentiation of investment and operating in- come, and in the preparation, where the Com- mission deems it necessary or desirable, of con- solidated balance sheets or income accounts of any person directly or indirectly controlling or controlled by the issuer, or any person under di- rect or indirect common control with the issuer. The rules and regulations of the Commission shall be effective upon publication in the man- ner which the Commission shall prescribe. No provision of this subchapter imposing any liabil- ity shall apply to any act done or omitted in good faith in conformity with any rule or regu- lation of the Commission, notwithstanding that such rule or regulation may, after such act or omission, be amended or rescinded or be deter- mined by judicial or other authority to be in- valid for any reason. (b) Recognition of accounting standards (1) In general In carrying out its authority under sub- section (a) and under section 13(b) of the Secu- rities Exchange Act of 1934 [15 U.S.C. 78m(b)], the Commission may recognize, as ‘‘generally accepted’’ for purposes of the securities laws, any accounting principles established by a standard setting body— (A) that— (i) is organized as a private entity; (ii) has, for administrative and oper- ational purposes, a board of trustees (or equivalent body) serving in the public in- terest, the majority of whom are not, con- current with their service on such board, and have not been during the 2-year period preceding such service, associated persons of any registered public accounting firm; (iii) is funded as provided in section 7219 of this title; (iv) has adopted procedures to ensure prompt consideration, by majority vote of its members, of changes to accounting principles necessary to reflect emerging accounting issues and changing business practices; and Page 159 TITLE 15—COMMERCE AND TRADE § 77s (v) considers, in adopting accounting principles, the need to keep standards cur- rent in order to reflect changes in the busi- ness environment, the extent to which international convergence on high quality accounting standards is necessary or ap- propriate in the public interest and for the protection of investors; and (B) that the Commission determines has the capacity to assist the Commission in ful- filling the requirements of subsection (a) and section 13(b) of the Securities Exchange Act of 1934 [15 U.S.C. 78m(b)], because, at a minimum, the standard setting body is capa- ble of improving the accuracy and effective- ness of financial reporting and the protec- tion of investors under the securities laws. (2) Annual report A standard setting body described in para- graph (1) shall submit an annual report to the Commission and the public, containing au- dited financial statements of that standard setting body. (c) Production of evidence For the purpose of all investigations which, in the opinion of the Commission, are necessary and proper for the enforcement of this sub- chapter, any member of the Commission or any officer or officers designated by it are empow- ered to administer oaths and affirmations, sub- pena witnesses, take evidence, and require the production of any books, papers, or other docu- ments which the Commission deems relevant or material to the inquiry. Such attendance of wit- nesses and the production of such documentary evidence may be required from any place in the United States or any Territory at any des- ignated place of hearing. (d) Federal and State cooperation (1) The Commission is authorized to cooperate with any association composed of duly con- stituted representatives of State governments whose primary assignment is the regulation of the securities business within those States, and which, in the judgment of the Commission, could assist in effectuating greater uniformity in Federal-State securities matters. The Com- mission shall, at its discretion, cooperate, co- ordinate, and share information with such an as- sociation for the purposes of carrying out the policies and projects set forth in paragraphs (2) and (3). (2) It is the declared policy of this subsection that there should be greater Federal and State cooperation in securities matters, including— (A) maximum effectiveness of regulation, (B) maximum uniformity in Federal and State regulatory standards, (C) minimum interference with the business of capital formation, and (D) a substantial reduction in costs and pa- perwork to diminish the burdens of raising in- vestment capital (particularly by small busi- ness) and to diminish the costs of the adminis- tration of the Government programs involved. (3) The purpose of this subsection is to engen- der cooperation between the Commission, any such association of State securities officials, and other duly constituted securities associa- tions in the following areas: (A) the sharing of information regarding the registration or exemption of securities issues applied for in the various States; (B) the development and maintenance of uni- form securities forms and procedures; and (C) the development of a uniform exemption from registration for small issuers which can be agreed upon among several States or be- tween the States and the Federal Government. The Commission shall have the authority to adopt such an exemption as agreed upon for Federal purposes. Nothing in this chapter shall be construed as authorizing preemption of State law. (4) In order to carry out these policies and pur- poses, the Commission shall conduct an annual conference as well as such other meetings as are deemed necessary, to which representatives from such securities associations, securities self-regulatory organizations, agencies, and pri- vate organizations involved in capital formation shall be invited to participate. (5) For fiscal year 1982, and for each of the three succeeding fiscal years, there are author- ized to be appropriated such amounts as may be necessary and appropriate to carry out the poli- cies, provisions, and purposes of this subsection. Any sums so appropriated shall remain available until expended. (6) Notwithstanding any other provision of law, neither the Commission nor any other per- son shall be required to establish any procedures not specifically required by the securities laws, as that term is defined in section 3(a)(47) of the Securities Exchange Act of 1934 [15 U.S.C. 78c(a)(47)], or by chapter 5 of title 5, in connec- tion with cooperation, coordination, or con- sultation with— (A) any association referred to in paragraph (1) or (3) or any conference or meeting referred to in paragraph (4), while such association, conference, or meeting is carrying out activi- ties in furtherance of the provisions of this subsection; or (B) any forum, agency, or organization, or group referred to in section 80c–1 of this title, while such forum, agency, organization, or group is carrying out activities in furtherance of the provisions of such section 80c–1. As used in this paragraph, the terms ‘‘associa- tion’’, ‘‘conference’’, ‘‘meeting’’, ‘‘forum’’, ‘‘agency’’, ‘‘organization’’, and ‘‘group’’ include any committee, subgroup, or representative of such entities. (e) Evaluation of rules or programs For the purpose of evaluating any rule or pro- gram of the Commission issued or carried out under any provision of the securities laws, as de- fined in section 3 of the Securities Exchange Act of 1934 (15 U.S.C. 78c), and the purposes of con- sidering, proposing, adopting, or engaging in any such rule or program or developing new rules or programs, the Commission may— (1) gather information from and commu- nicate with investors or other members of the public; (2) engage in such temporary investor test- ing programs as the Commission determines Page 160 TITLE 15—COMMERCE AND TRADE § 77s are in the public interest or would protect in- vestors; and (3) consult with academics and consultants, as necessary to carry out this subsection. (f) Rule of construction For purposes of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.), any action taken under subsection (e) shall not be construed to be a col- lection of information. (g) Funding for the GASB (1) In general The Commission may, subject to the limita- tions imposed by section 15B of the Securities Exchange Act of 1934 (15 U.S.C. 78o–4), require a national securities association registered under the Securities Exchange Act of 1934 [15 U.S.C. 78a et seq.] to establish— (A) a reasonable annual accounting sup- port fee to adequately fund the annual budg- et of the Governmental Accounting Stand- ards Board (referred to in this subsection as the ‘‘GASB’’); and (B) rules and procedures, in consultation with the principal organizations rep- resenting State governors, legislators, local elected officials, and State and local finance officers, to provide for the equitable alloca- tion, assessment, and collection of the ac- counting support fee established under sub- paragraph (A) from the members of the asso- ciation, and the remittance of all such ac- counting support fees to the Financial Ac- counting Foundation. (2) Annual budget For purposes of this subsection, the annual budget of the GASB is the annual budget re- viewed and approved according to the internal procedures of the Financial Accounting Foun- dation. (3) Use of funds Any fees or funds collected under this sub- section shall be used to support the efforts of the GASB to establish standards of financial accounting and reporting recognized as gen- erally accepted accounting principles applica- ble to State and local governments of the United States. (4) Limitation on fee The annual accounting support fees col- lected under this subsection for a fiscal year shall not exceed the recoverable annual budg- eted expenses of the GASB (which may include operating expenses, capital, and accrued items). (5) Rules of construction (A) Fees not public monies Accounting support fees collected under this subsection and other receipts of the GASB shall not be considered public monies of the United States. (B) Limitation on authority of the Commis- sion Nothing in this subsection shall be con- strued to— (i) provide the Commission or any na- tional securities association direct or indi- rect oversight of the budget or technical agenda of the GASB; or (ii) affect the setting of generally accept- ed accounting principles by the GASB. (C) Noninterference with States Nothing in this subsection shall be con- strued to impair or limit the authority of a State or local government to establish ac- counting and financial reporting standards. (May 27, 1933, ch. 38, title I, § 19, 48 Stat. 85; June 6, 1934, ch. 404, title II, § 209, 48 Stat. 908; Pub. L. 94–210, title III, § 308(a)(2), Feb. 5, 1976, 90 Stat. 57; Pub. L. 96–477, title V, § 505, Oct. 21, 1980, 94 Stat. 2292; Pub. L. 100–181, title II, § 207, Dec. 4, 1987, 101 Stat. 1252; Pub. L. 107–204, title I, § 108(a), July 30, 2002, 116 Stat. 768; Pub. L. 111–203, title IX, §§ 912, 978(a), 985(a)(3), July 21, 2010, 124 Stat. 1824, 1924, 1933.) Editorial Notes REFERENCES IN TEXT The Paperwork Reduction Act, referred to in subsec. (f), probably means chapter 35 (§ 3501 et seq.) of Title 44, Public Printing and Documents. See Short Title note set out under section 3501 of Title 44. The Securities Exchange Act of 1934, referred to in subsec. (g)(1), is act June 6, 1934, ch. 404, 48 Stat. 881, which is classified principally to chapter 2B (§ 78a et seq.) of this title. For complete classification of this Act to the Code, see section 78a of this title and Tables. AMENDMENTS 2010—Subsec. (d)(6)(A). Pub. L. 111–203, § 985(a)(3), which directed substitution of ‘‘in paragraph (1) or (3)’’ for ‘‘in paragraph (1) of (3)’’, could not be executed be- cause the phrase ‘‘in paragraph (1) of (3)’’ did not ap- pear. Subsecs. (e), (f). Pub. L. 111–203, § 912, added subsecs. (e) and (f). Subsec. (g). Pub. L. 111–203, § 978(a), added subsec. (g). 2002—Subsecs. (b) to (d). Pub. L. 107–204 added subsec. (b) and redesignated former subsecs. (b) and (c) as (c) and (d), respectively. 1987—Subsec. (c)(6). Pub. L. 100–181 added par. (6). 1980—Subsec. (c). Pub. L. 96–477 added subsec. (c). 1976—Subsec. (a). Pub. L. 94–210 struck out provisions relating to rules and regulations applicable to any common carrier subject to the provisions of section 20 of title 49. 1934—Subsec. (a). Act June 6, 1934, inserted ‘‘tech- nical’’ in first sentence and inserted last sentence. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2010 AMENDMENT Amendment by Pub. L. 111–203 effective 1 day after July 21, 2010, except as otherwise provided, see section 4 of Pub. L. 111–203, set out as an Effective Date note under section 5301 of Title 12, Banks and Banking. EFFECTIVE DATE OF 1980 AMENDMENT Amendment by Pub. L. 96–477 effective Jan. 1, 1981, see section 507 of Pub. L. 96–477, set out as an Effective Date note under section 80c of this title. EFFECTIVE DATE OF 1976 AMENDMENT Amendment by Pub. L. 94–210 effective on 60th day after Feb. 5, 1976, but not applicable to any bona fide of- fering of a security made by the issuer, or by or through an underwriter, before such 60th day, see sec- tion 308(d)(1) of Pub. L. 94–210, set out as a note under section 77c of this title. PARITY FOR REGISTERED INDEX-LINKED ANNUITIES REGARDING REGISTRATION RULES Pub. L. 117–328, div. AA, title I, § 101, Dec. 29, 2022, 136 Stat. 5528, provided that: Page 161 TITLE 15—COMMERCE AND TRADE § 77s ‘‘(a) DEFINITIONS.—In this section: ‘‘(1) COMMISSION.—The term ‘Commission’ means the Securities and Exchange Commission. ‘‘(2) INVESTMENT COMPANY.—The term ‘investment company’ has the meaning given the term in section 3 of the Investment Company Act of 1940 (15 U.S.C. 80a–3). ‘‘(3) MARKET VALUE ADJUSTMENT.—The term ‘mar- ket value adjustment’ means, with respect to a reg- istered index-linked annuity, after an early with- drawal or contract discontinuance— ‘‘(A) an adjustment to the value of that annuity based on calculations using a predetermined for- mula; or ‘‘(B) a change in interest rates (or other factor, as determined by the Commission) that apply to that annuity. ‘‘(4) PURCHASER.—The term ‘purchaser’ means a purchaser of a registered index-linked annuity. ‘‘(5) REGISTERED INDEX-LINKED ANNUITY.—The term ‘registered index-linked annuity’ means an annuity— ‘‘(A) that is deemed to be a security; ‘‘(B) that is registered with the Commission in ac- cordance with section 5 of the Securities Act of 1933 (15 U.S.C. 77e); ‘‘(C) that is issued by an insurance company that is subject to the supervision of— ‘‘(i) the insurance commissioner or bank com- missioner of any State; or ‘‘(ii) any agency or officer performing like func- tions as a commissioner described in clause (i); ‘‘(D) that is not issued by an investment com- pany; and ‘‘(E) the returns of which— ‘‘(i) are based on the performance of a specified benchmark index or rate (or a registered ex- change traded fund that seeks to track the per- formance of a specified benchmark index or rate); and ‘‘(ii) may be subject to a market value adjust- ment if amounts are withdrawn before the end of the period during which that market value ad- justment applies. ‘‘(6) SECURITY.—The term ‘security’ has the mean- ing given the term in section 2(a) of the Securities Act of 1933 (15 U.S.C. 77b(a)). ‘‘(b) RULES.— ‘‘(1) IN GENERAL.—Not later than 180 days after the date of enactment of this Act [Dec. 29, 2022], the Com- mission shall propose, and, not later than 18 months after the date of enactment of this Act, the Commis- sion shall prepare and finalize, new or amended rules, as appropriate, to establish a new form in accordance with paragraph (2) on which an issuer of a registered index-linked annuity may register that registered index-linked annuity, subject to conditions the Com- mission determines appropriate, which may include requiring the issuer to take the steps described in section 240.12h–7(e) of title 17, Code of Federal Regu- lations, or any successor regulation, with respect to the registered index-linked annuity. ‘‘(2) DESIGN OF FORM.—In developing the form re- quired to be established under paragraph (1), the Commission shall— ‘‘(A) design the form to ensure that a purchaser using the form receives the information necessary to make knowledgeable decisions, taking into ac- count— ‘‘(i) the availability of information; ‘‘(ii) the knowledge and sophistication of that class of purchasers; ‘‘(iii) the complexity of the registered index- linked annuity; and ‘‘(iv) any other factor the Commission deter- mines appropriate; ‘‘(B) engage in investor testing; and ‘‘(C) incorporate the results of the testing re- quired under subparagraph (B) in the design of the form, with the goal of ensuring that key informa- tion is conveyed in terms that a purchaser is able to understand. ‘‘(c) TREATMENT IF RULES NOT PREPARED AND FINAL- IZED IN A TIMELY MANNER.— ‘‘(1) IN GENERAL.—If, as of the date that is 18 months after the date of enactment of this Act, the Commission has failed to prepare and finalize the rules required under subsection (b)(1), any registered index-linked annuity may be registered on the form described in section 239.17b of title 17, Code of Federal Regulations, or any successor regulation. ‘‘(2) PREPARATION.—A registration described in paragraph (1) shall be prepared pursuant to applicable provisions of the form described in that paragraph. ‘‘(3) TERMINATION.—This subsection shall terminate upon the establishment by the Commission of the form described in subsection (b). ‘‘(d) RULES OF CONSTRUCTION.—Nothing in this sec- tion may be construed to— ‘‘(1) limit the authority of the Commission to— ‘‘(A) determine the information to be requested in the form described in subsection (b); or ‘‘(B) extend the eligibility for the form described in subsection (b) to a product that is similar to, but is not, a registered index-linked annuity; or ‘‘(2) preempt any State law, regulation, rule, or order.’’ STUDY ON MODERNIZATION AND SIMPLIFICATION OF REGULATION S–K Pub. L. 114–94, div. G, title LXXII, § 72003, Dec. 4, 2015, 129 Stat. 1785, provided that: ‘‘(a) STUDY.—The Securities and Exchange Commis- sion shall carry out a study of the requirements con- tained in regulation S–K (17 CFR 229.10 et seq.). Such study shall— ‘‘(1) determine how best to modernize and simplify such requirements in a manner that reduces the costs and burdens on issuers while still providing all mate- rial information; ‘‘(2) emphasize a company by company approach that allows relevant and material information to be disseminated to investors without boilerplate lan- guage or static requirements while preserving com- pleteness and comparability of information across registrants; and ‘‘(3) evaluate methods of information delivery and presentation and explore methods for discouraging repetition and the disclosure of immaterial informa- tion. ‘‘(b) CONSULTATION.—In conducting the study re- quired under subsection (a), the Commission shall con- sult with the Investor Advisory Committee and the Ad- visory Committee on Small and Emerging Companies. ‘‘(c) REPORT.—Not later than the end of the 360-day period beginning on the date of enactment of this Act [Dec. 4, 2015], the Commission shall issue a report to the Congress containing— ‘‘(1) all findings and determinations made in car- rying out the study required under subsection (a); ‘‘(2) specific and detailed recommendations on mod- ernizing and simplifying the requirements in regula- tion S–K in a manner that reduces the costs and bur- dens on companies while still providing all material information; and ‘‘(3) specific and detailed recommendations on ways to improve the readability and navigability of disclo- sure documents and to discourage repetition and the disclosure of immaterial information. ‘‘(d) RULEMAKING.—Not later than the end of the 360- day period beginning on the date that the report is issued to the Congress under subsection (c), the Com- mission shall issue a proposed rule to implement the recommendations of the report issued under subsection (c). ‘‘(e) RULE OF CONSTRUCTION.—Revisions made to regu- lation S–K by the Commission under section 202 [prob- ably means section 72002 of Pub. L. 114–94, set out as a note under section 77g of this title] shall not be con- strued as satisfying the rulemaking requirements under this section.’’ Page 162 TITLE 15—COMMERCE AND TRADE § 77t Executive Documents TRANSFER OF FUNCTIONS For transfer of functions of Securities and Exchange Commission, with certain exceptions, to Chairman of such Commission, see Reorg. Plan No. 10 of 1950, §§ 1, 2, eff. May 24, 1950, 15 F.R. 3175, 64 Stat. 1265, set out under section 78d of this title. § 77t. Injunctions and prosecution of offenses (a) Investigation of violations Whenever it shall appear to the Commission, either upon complaint or otherwise, that the provisions of this subchapter, or of any rule or regulation prescribed under authority thereof, have been or are about to be violated, it may, in its discretion, either require or permit such per- son to file with it a statement in writing, under oath, or otherwise, as to all the facts and cir- cumstances concerning the subject matter which it believes to be in the public interest to investigate, and may investigate such facts. (b) Action for injunction or criminal prosecution in district court Whenever it shall appear to the Commission that any person is engaged or about to engage in any acts or practices which constitute or will constitute a violation of the provisions of this subchapter, or of any rule or regulation pre- scribed under authority thereof, the Commission may, in its discretion, bring an action in any district court of the United States, or United States court of any Territory, to enjoin such acts or practices, and upon a proper showing, a permanent or temporary injunction or restrain- ing order shall be granted without bond. The Commission may transmit such evidence as may be available concerning such acts or practices to the Attorney General who may, in his discre- tion, institute the necessary criminal pro- ceedings under this subchapter. Any such crimi- nal proceeding may be brought either in the dis- trict wherein the transmittal of the prospectus or security complained of begins, or in the dis- trict wherein such prospectus or security is re- ceived. (c) Writ of mandamus Upon application of the Commission, the dis- trict courts of the United States and the United States courts of any Territory shall have juris- diction to issue writs of mandamus commanding any person to comply with the provisions of this subchapter or any order of the Commission made in pursuance thereof. (d) Money penalties in civil actions (1) Authority of Commission Whenever it shall appear to the Commission that any person has violated any provision of this subchapter, the rules or regulations there- under, or a cease-and-desist order entered by the Commission pursuant to section 77h–1 of this title, other than by committing a viola- tion subject to a penalty pursuant to section 78u–1 of this title, the Commission may bring an action in a United States district court to seek, and the court shall have jurisdiction to impose, upon a proper showing, a civil penalty to be paid by the person who committed such violation. (2) Amount of penalty (A) First tier The amount of the penalty shall be deter- mined by the court in light of the facts and circumstances. For each violation, the amount of the penalty shall not exceed the greater of (i) $5,000 for a natural person or $50,000 for any other person, or (ii) the gross amount of pecuniary gain to such defendant as a result of the violation. (B) Second tier Notwithstanding subparagraph (A), the amount of penalty for each such violation shall not exceed the greater of (i) $50,000 for a natural person or $250,000 for any other person, or (ii) the gross amount of pecuniary gain to such defendant as a result of the vio- lation, if the violation described in para- graph (1) involved fraud, deceit, manipula- tion, or deliberate or reckless disregard of a regulatory requirement. (C) Third tier Notwithstanding subparagraphs (A) and (B), the amount of penalty for each such vio- lation shall not exceed the 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, if— (I) the violation described in paragraph (1) involved fraud, deceit, manipulation, or deliberate or reckless disregard of a regu- latory requirement; and (II) such violation directly or indirectly resulted in substantial losses or created a significant risk of substantial losses to other persons. (3) Procedures for collection (A) 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 sec- tion 7246 of this title and section 78u–6 of this title. (B) Collection of penalties If a person upon whom such a penalty is imposed shall fail to pay such penalty with- in 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. (C) Remedy not exclusive The actions authorized by this subsection may be brought in addition to any other ac- tion that the Commission or the Attorney General is entitled to bring. (D) Jurisdiction and venue For purposes of section 77v of this title, ac- tions under this section shall be actions to enforce a liability or a duty created by this subchapter. (4) Special provisions relating to a violation of a cease-and-desist order In an action to enforce a cease-and-desist order entered by the Commission pursuant to