15 U.S.C. § 78ff — Penalties

Page 469 TITLE 15—COMMERCE AND TRADE § 78ff investment companies, retirement programs, and others; ‘‘(2) consider the impact on different types of inves- tors, such as individual equity holders, individual in- vestment company shareholders, businesses, and other types of investors; ‘‘(3) include in the interpretation of the term ‘in- vestor’ shareholders of entities subject to the fee re- ductions; and ‘‘(4) consider the economic benefits to investors flowing from the fee reductions to include such fac- tors as market efficiency, expansion of investment opportunities, and enhanced liquidity and capital for- mation. ‘‘(c) REPORT TO CONGRESS.—Not later than 2 years after the date of the enactment of this Act [Jan. 16, 2002], the Securities and Exchange Commission shall submit to the Congress the report prepared by the Of- fice on the findings of the study conducted under sub- section (a).’’ FEES FROM NATIONAL SECURITIES ASSOCIATIONS FOR MEMBER TRANSACTIONS OTHER THAN ON NATIONAL SECURITIES EXCHANGES Pub. L. 104–208, div. A, title I, § 101(a) [title V], Sept. 30, 1996, 110 Stat. 3009, 3009–61, provided in part: ‘‘That effective January 1, 1997, every national securities asso- ciation shall pay to the Commission a fee at a rate of one-three-hundredth of one percentum of the aggregate dollar amount of sales transacted by or through any member of such association otherwise than on a na- tional securities exchange (other than bonds, deben- tures, and other evidences of indebtedness) subject to prompt last sale reporting pursuant to the rules of the Commission or a registered national securities associa- tion, excluding any sales for which a fee is paid under section 31 of the Securities Exchange Act of 1934 (15 U.S.C. 78ee), and such increase shall be deposited as an offsetting collection to this appropriation, to remain available until expended, to recover the costs to the Government of the supervision and regulation of secu- rities markets and securities professionals: Provided further, That the fee due from every national securities association shall be paid on or before September 30, 1997, with respect to transactions and sales occurring during the period beginning on January 1, 1997, and ending at the close of August 31, 1997’’. ADJUSTMENT OF TRANSACTION FEE RATE By order dated Jan. 26, 2023, the Securities and Ex- change Commission adjusted the fee rates applicable under subsecs. (b) and (c) of this section to $8.00 per $1,000,000, effective Feb. 27, 2023, see 88 F.R. 5051. By order dated Apr. 8, 2022, the Securities and Ex- change Commission adjusted the fee rates applicable under subsecs. (b) and (c) of this section to $22.90 per $1,000,000, effective May 14, 2022, see 87 F.R. 21931. By order dated Jan. 15, 2021, the Securities and Ex- change Commission adjusted the fee rates applicable under subsecs. (b) and (c) of this section to $5.10 per $1,000,000, effective Feb. 25, 2021, see 86 F.R. 6694. By order dated Jan. 9, 2020, the Securities and Ex- change Commission adjusted the fee rates applicable under subsecs. (b) and (c) of this section to $22.10 per $1,000,000, effective Feb. 18, 2020, see 85 F.R. 2218. By order dated Mar. 15, 2019, the Securities and Ex- change Commission adjusted the fee rates applicable under subsecs. (b) and (c) of this section to $20.70 per $1,000,000, effective Apr. 16, 2019, see 84 F.R. 9576. By order dated Apr. 17, 2018, the Securities and Ex- change Commission adjusted the fee rates applicable under subsecs. (b) and (c) of this section to $13.00 per $1,000,000, effective May 22, 2018, see 83 F.R. 17577. By order dated May 31, 2017, the Securities and Ex- change Commission adjusted the fee rates applicable under subsecs. (b) and (c) of this section to $23.10 per $1,000,000, effective July 4, 2017, see 82 F.R. 25895. By order dated Jan. 7, 2016, the Securities and Ex- change Commission adjusted the fee rates applicable under subsecs. (b) and (c) of this section to $21.80 per $1,000,000, effective Feb. 16, 2016, see 81 F.R. 1458. By order dated Jan. 15, 2015, the Securities and Ex- change Commission adjusted the fee rates applicable under subsecs. (b) and (c) of this section to $18.40 per $1,000,000, effective Feb. 14, 2015, see 80 F.R. 2978. By order dated Feb. 12, 2014, the Securities and Ex- change Commission adjusted the fee rates applicable under subsecs. (b) and (c) of this section to $22.10 per $1,000,000, effective Mar. 18, 2014, see 79 F.R. 9504. By order dated Apr. 25, 2013, the Securities and Ex- change Commission adjusted the fee rates applicable under subsecs. (b) and (c) of this section to $17.40 per $1,000,000, effective May 25, 2013, see 78 F.R. 25515. By order dated Mar. 1, 2012, the Securities and Ex- change Commission adjusted the fee rates applicable under subsecs. (b) and (c) of this section to $22.40 per $1,000,000, effective Apr. 1, 2012, see 77 F.R. 13663. By order dated Jan. 20, 2012, the Securities and Ex- change Commission adjusted the fee rates applicable under subsecs. (b) and (c) of this section to $18.00 per $1,000,000, effective Feb. 21, 2012, see 77 F.R. 3818. 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. § 78ff. Penalties (a) Willful violations; false and misleading state- ments Any person who willfully violates any provi- sion of this chapter (other than section 78dd–1 of this title), or any rule or regulation thereunder the violation of which is made unlawful or the observance of which is required under the terms of this chapter, or any person who willfully and knowingly makes, or causes to be made, any statement in any application, report, or docu- ment required to be filed under this chapter or any rule or regulation thereunder or any under- taking contained in a registration statement as provided in subsection (d) of section 78o of this title, or by any self-regulatory organization in connection with an application for membership or participation therein or to become associated with a member thereof which statement was false or misleading with respect to any material fact, shall upon conviction be fined not more than $5,000,000, or imprisoned not more than 20 years, or both, except that when such person is a person other than a natural person, a fine not exceeding $25,000,000 may be imposed; but no person shall be subject to imprisonment under this section for the violation of any rule or regu- lation if he proves that he had no knowledge of such rule or regulation. (b) Failure to file information, documents, or re- ports Any issuer which fails to file information, doc- uments, or reports required to be filed under subsection (d) of section 78o of this title or any rule or regulation thereunder shall forfeit to the United States the sum of $100 for each and every day such failure to file shall continue. Such for- feiture, which shall be in lieu of any criminal penalty for such failure to file which might be deemed to arise under subsection (a) of this sec- tion, shall be payable into the Treasury of the Page 470 TITLE 15—COMMERCE AND TRADE § 78ff United States and shall be recoverable in a civil suit in the name of the United States. (c) Violations by issuers, officers, directors, stockholders, employees, or agents of issuers (1)(A) Any issuer that violates subsection (a) or (g) of section 78dd–1 of this title shall be fined not more than $2,000,000. (B) Any issuer that violates subsection (a) or (g) of section 78dd–1 of this title shall be subject to a civil penalty of not more than $10,000 im- posed in an action brought by the Commission. (2)(A) Any officer, director, employee, or agent of an issuer, or stockholder acting on behalf of such issuer, who willfully violates subsection (a) or (g) of section 78dd–1 of this title shall be fined not more than $100,000, or imprisoned not more than 5 years, or both. (B) Any officer, director, employee, or agent of an issuer, or stockholder acting on behalf of such issuer, who violates subsection (a) or (g) of section 78dd–1 of this title shall be subject to a civil penalty of not more than $10,000 imposed in an action brought by the Commission. (3) Whenever a fine is imposed under para- graph (2) upon any officer, director, employee, agent, or stockholder of an issuer, such fine may not be paid, directly or indirectly, by such issuer. (June 6, 1934, ch. 404, title I, § 32, 48 Stat. 904; May 27, 1936, ch. 462, § 9, 49 Stat. 1380; June 25, 1938, ch. 677, § 4, 52 Stat. 1076; Pub. L. 88–467, § 11, Aug. 20, 1964, 78 Stat. 580; Pub. L. 94–29, §§ 23, 27(b), June 4, 1975, 89 Stat. 162, 163; Pub. L. 95–213, title I, § 103(b), Dec. 19, 1977, 91 Stat. 1496; Pub. L. 98–376, § 3, Aug. 10, 1984, 98 Stat. 1265; Pub. L. 100–418, title V, § 5003(b), Aug. 23, 1988, 102 Stat. 1419; Pub. L. 100–704, § 4, Nov. 19, 1988, 102 Stat. 4680; Pub. L. 105–366, § 2(d), Nov. 10, 1998, 112 Stat. 3303; Pub. L. 107–204, title XI, § 1106, July 30, 2002, 116 Stat. 810.) Editorial Notes REFERENCES IN TEXT This chapter, referred to in subsec. (a), was in the original ‘‘this title’’. See References in Text note set out under section 78a of this title. AMENDMENTS 2002—Subsec. (a). Pub. L. 107–204 substituted ‘‘$5,000,000, or imprisoned not more than 20 years’’ for ‘‘$1,000,000, or imprisoned not more than 10 years’’ and ‘‘$25,000,000’’ for ‘‘$2,500,000’’. 1998—Subsec. (c)(1). Pub. L. 105–366, § 2(d)(1), (2), sub- stituted ‘‘subsection (a) or (g) of section 78dd–1’’ for ‘‘section 78dd–1(a)’’ in subpars. (A) and (B). Subsec. (c)(2). Pub. L. 105–366, § 2(d)(3), amended par. (2) generally. Prior to amendment, par. (2) read as fol- lows: ‘‘(2)(A) Any officer or director of an issuer, or stock- holder acting on behalf of such issuer, who willfully violates section 78dd–1(a) of this title shall be fined not more than $100,000, or imprisoned not more than 5 years, or both. ‘‘(B) Any employee or agent of an issuer who is a United States citizen, national, or resident or is other- wise subject to the jurisdiction of the United States (other than an officer, director, or stockholder acting on behalf of such issuer), and who willfully violates sec- tion 78dd–1(a) of this title, shall be fined not more than $100,000, or imprisoned not more than 5 years, or both. ‘‘(C) Any officer, director, employee, or agent of an issuer, or stockholder acting on behalf of such issuer, who violates section 78dd–1(a) of this title shall be sub- ject to a civil penalty of not more than $10,000 imposed in an action brought by the Commission.’’ 1988—Subsec. (a). Pub. L. 100–704 substituted ‘‘$1,000,000’’ for ‘‘$100,000’’, ‘‘10 years’’ for ‘‘five years’’, ‘‘is a person other than a natural person’’ for ‘‘is an ex- change’’, and ‘‘$2,500,000’’ for ‘‘$500,000’’. Subsec. (c). Pub. L. 100–418 amended subsec. (c) gen- erally. Prior to amendment, subsec. (c) read as follows: ‘‘(1) Any issuer which violates section 78dd–1(a) of this title shall, upon conviction, be fined not more than $1,000,000. ‘‘(2) Any officer or director of an issuer, or any stock- holder acting on behalf of such issuer, who willfully violates section 78dd–1(a) of this title shall, upon con- viction, be fined not more than $10,000, or imprisoned not more than five years, or both. ‘‘(3) Whenever an issuer is found to have violated sec- tion 78dd–1(a) of this title, any employee or agent of such issuer who is a United States citizen, national, or resident or is otherwise subject to the jurisdiction of the United States (other than an officer, director, or stockholder of such issuer), and who willfully carried out the act or practice constituting such violation shall, upon conviction, be fined not more than $10,000, or imprisoned not more than five years, or both. ‘‘(4) Whenever a fine is imposed under paragraph (2) or (3) of this subsection upon any officer, director, stockholder, employee, or agent of an issuer, such fine shall not be paid, directly or indirectly, by such issuer.’’ 1984—Subsec. (a). Pub. L. 98–376 substituted ‘‘$100,000’’ for ‘‘$10,000’’. 1977—Subsec. (a). Pub. L. 95–213, § 103(b)(1), inserted ‘‘(other than section 78dd–1 of this title)’’ after ‘‘Any person who willfully violates any provision of this chapter’’. Subsec. (c). Pub. L. 95–213, § 103(b)(2), added subsec. (c). 1975—Subsec. (a). Pub. L. 94–29, §§ 23(1), 27(b), inserted ‘‘or by any self-regulatory organization in connection with an application for membership or participation therein or to become associated with a member there- of,’’ and substituted ‘‘or imprisoned not more than five years’’ for ‘‘or imprisoned not more than two years’’. Subsec. (c). Pub. L. 94–29, § 23(2), struck out subsec. (c) which rendered this section inapplicable to violations of any rule or regulation prescribed pursuant to para- graph (3) of subsection (c) of section 78o of this title. 1964—Subsec. (b). Pub. L. 88–467 substituted ‘‘required to be filed under’’ for ‘‘pursuant to an undertaking con- tained in a registration statement as provided in’’ and inserted ‘‘or any rule or regulation thereunder’’ after ‘‘section 78o of this title.’’ 1938—Subsec. (c). Act June 25, 1938, added subsec. (c). 1936—Subsec. (a). Act May 27, 1936, inserted ‘‘or any undertaking contained in a registration statement as provided in subsection (d) of section 78o of this title’’. Subsec. (b). Act May 27, 1936, added subsec. (b). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1988 AMENDMENT Amendment by Pub. L. 100–704 not applicable to ac- tions occurring before Nov. 19, 1988, see section 9 of Pub. L. 100–704, set out as a note under section 78o of this title. EFFECTIVE DATE OF 1984 AMENDMENT Amendment by Pub. L. 98–376 effective Aug. 10, 1984, see section 7 of Pub. L. 98–376, set out as a note under section 78c of this title. EFFECTIVE DATE OF 1975 AMENDMENT Amendment by Pub. L. 94–29 effective June 4, 1975, see section 31(a) of Pub. L. 94–29, set out as a note under section 78b of this title. EFFECTIVE DATE OF 1964 AMENDMENT Amendment by Pub. L. 88–467 effective Aug. 20, 1964, see section 13 of Pub. L. 88–467, set out as a note under section 78c of this title. Page 471 TITLE 15—COMMERCE AND TRADE § 78kk § 78gg. Separability If any provision of this chapter, or the applica- tion of such provision to any person or cir- cumstances, shall be held invalid, the remainder of the chapter and the application of such provi- sion to persons or circumstances other than those as to which it is held invalid, shall not be affected thereby. (June 6, 1934, ch. 404, title I, § 33, 48 Stat. 905.) Editorial Notes REFERENCES IN TEXT This chapter, referred to in text, was in the original ‘‘this Act’’. See References in Text note set out under section 78a of this title. § 78hh. Effective date This chapter shall become effective on July 1, 1934, except that sections 78f and 78l(b to e) of this title shall become effective on September 1, 1934; and sections 78e, 78g, 78h, 78i(a)(6), 78j, 78k, 78l(a), 78m, 78n, 78o, 78p, 78q, 78r, 78s, and 78dd of this title shall become effective on October 1, 1934. (June 6, 1934, ch. 404, title I, § 34, 48 Stat. 905.) Editorial Notes REFERENCES IN TEXT This chapter, referred to in text, was in the original ‘‘This Act’’. See References in Text note set out under section 78a of this title. § 78hh–1. Effective date of certain sections This Act shall become effective on May 27, 1936; except that clause (2) of subsection (f) of section 78l of this title, and subsections (a) and (d) of section 78o of this title, shall become ef- fective ninety days after May 27, 1936, and that clause (3) of subsection (f) of section 78l of this title shall become effective six months after May 27, 1936. (May 27, 1936, ch. 462, § 12, 49 Stat. 1380.) Editorial Notes REFERENCES IN TEXT This Act, referred to in text, is act May 27, 1936, ch. 462, 49 Stat. 1375, popularly known as the Unlisted Se- curities Trading Act, which enacted sections 78l–1, 78o–1, 78o–2, and 78hh–1 of this title, and amended sec- tions 78l, 78o, 78q, 78r, 78t, 78u, 78w, and 78ff of this title. CODIFICATION Section was not enacted as a part of the Securities Exchange Act of 1934 which comprises this chapter. § 78ii. Omitted Editorial Notes CODIFICATION Section, act June 6, 1934, ch. 404, title II, § 210, 48 Stat. 908, transferred the powers, duties and functions of the Federal Trade Commission under subchapter I of chap- ter 2A of this title to the Securities and Exchange Com- mission. Pending proceedings before the Federal Trade Commission were continued before the Securities and Exchange Commission. § 78jj. Repealed. Pub. L. 100–181, title III, § 330, Dec. 4, 1987, 101 Stat. 1259 Section, act June 6, 1934, ch. 404, title II, § 211, 48 Stat. 909, provided for a study and report by Securities and Exchange Commission of reorganization proceedings. Study as basis for Trust Indenture Act of 1939, see sec- tion 77bbb of this title. § 78kk. Authorization of appropriations In addition to any other funds authorized to be appropriated to the Commission, there are au- thorized to be appropriated to carry out the functions, powers, and duties of the Commis- sion— (1) for fiscal year 2011, $1,300,000,000; (2) for fiscal year 2012, $1,500,000,000; (3) for fiscal year 2013, $1,750,000,000; (4) for fiscal year 2014, $2,000,000,000; and (5) for fiscal year 2015, $2,250,000,000. (June 6, 1934, ch. 404, title I, § 35, as added Pub. L. 94–29, § 24, June 4, 1975, 89 Stat. 162; amended Pub. L. 95–20, Apr. 13, 1977, 91 Stat. 47; Pub. L. 95–211, Dec. 19, 1977, 91 Stat. 1492; Pub. L. 95–425, § 1, Oct. 6, 1978, 92 Stat. 962; Pub. L. 96–477, title IV, § 401, Oct. 21, 1980, 94 Stat. 2291; Pub. L. 100–181, title I, § 101, Dec. 4, 1987, 101 Stat. 1249; Pub. L. 100–704, § 8, Nov. 19, 1988, 102 Stat. 4683; Pub. L. 101–550, title I, § 102, Nov. 15, 1990, 104 Stat. 2713; Pub. L. 104–290, title IV, § 403, Oct. 11, 1996, 110 Stat. 3441; Pub. L. 105–353, title II, § 201, Nov. 3, 1998, 112 Stat. 3233; Pub. L. 107–204, title VI, § 601, July 30, 2002, 116 Stat. 793; Pub. L. 111–203, title IX, § 991(c), July 21, 2010, 124 Stat. 1953.) Editorial Notes CODIFICATION Pub. L. 94–29, which directed amendment of the Secu- rities Exchange Act of 1934 by adding this section at the end, is reflected in the source credit above as add- ing this section to title I of the Securities Exchange Act of 1934, to reflect the probable intent of Congress. AMENDMENTS 2010—Pub. L. 111–203 amended section generally. Prior to amendment, section related to appropriation for fis- cal year 2003 and specified amounts to fund certain ad- ditional compensation, for mitigation activities after the Sept. 11, 2001, attacks, and to add additional over- sight personnel and improve investigative and discipli- nary efforts. 2002—Pub. L. 107–204 amended section generally, up- dating fiscal year from 1999 to 2003, striking out subsec. designations, and substituting provisions relating to funding of additional compensation, terrorist-related information technology, security enhancements, and recovery and mitigation activities, and an additional 200 qualified professionals to provide enhanced over- sight for provisions relating to miscellaneous expenses such as meetings and official functions. 1998—Pub. L. 105–353 amended section generally. Prior to amendment, text read as follows: ‘‘There are author- ized to be appropriated to carry out the functions, pow- ers, and duties of the Commission $300,000,000 for fiscal year 1997, in addition to any other funds authorized to be appropriated to the Commission.’’ 1996—Pub. L. 104–290 amended section generally. Prior to amendment, text read as follows: ‘‘There are author- ized to be appropriated to carry out the functions, pow- ers, and duties of the Commission— ‘‘(1) $178,023,000 for the fiscal year ending September 30, 1990; and ‘‘(2) $212,609,000 for the fiscal year ending September 30, 1991.’’