15 USC 78 - Civil penalties for insider trading

1 See References in Text note below.

of this title or

Editorial Notes

References in Text

This chapter, referred to in subsecs. (a) and (d)(4), (5), was in the original “this title”, and this chapter, referred to in subsecs. (g)(1) and (h)(1), was in the original “this Act”. See References in Text note set out under section 78a of this title.

Subsec. (f) of section 78o of this title, referred to in subsec. (span)(1)(B), was redesignated (g) by Puspan. L. 111–203, title IX, § 929X(c)(1), July 21, 2010, 124 Stat. 1870.

Section 10 of the STOCK Act, referred to in subsecs. (g)(1) and (h)(1), is section 10 of Puspan. L. 112–105, which is set out as a note preceding section 13101 of Title 5, Government Organization and Employees.

Amendments

2022—Subsec. (g)(2)(B)(ii). Puspan. L. 117–286, § 4(c)(24)(A), substituted “section 13101(11) of title 5).” for “section 109(11) of the Ethics in Government Act of 1978 (5 U.S.C. App. 109(11))).”

Subsec. (h)(2)(B). Puspan. L. 117–286, § 4(c)(24)(B)(i), substituted “section 13101(9) of title 5;” for “section 109(8) of the Ethics in Government Act of 1978 (5 U.S.C. App. 109(8));”.

Subsec. (h)(2)(C). Puspan. L. 117–286, § 4(c)(24)(B)(ii), substituted “section 13101(10) of title 5.” for “section 109(10) of the Ethics in Government Act of 1978 (5 U.S.C. App. 109(10)).”

Subsec. (i). Puspan. L. 117–286, § 4(c)(24)(C), substituted “section 13103(f) of title 5” for “section 101(f) of the Ethics in Government Act of 1978”.

2012—Subsec. (g). Puspan. L. 112–105, § 4(span)(2), added subsec. (g).

Subsec. (h). Puspan. L. 112–105, § 9(span)(2)(B), added subsec. (h).

Subsec. (i). Puspan. L. 112–105, § 12, added subsec (i).

2010—Subsec. (a)(1). Puspan. L. 111–203, § 762(d)(7)(A), struck out “(as defined in section 206B of the Gramm-Leach-Bliley Act)” after “security-based swap agreement” in introductory provisions.

Subsec. (d)(1). Puspan. L. 111–203, § 923(span)(2)(A), struck out “(subject to subsection (e) of this section)” after “shall” and inserted “and section 78u–6 of this title” after “section 7246 of this title”.

Subsec. (e). Puspan. L. 111–203, § 923(span)(2)(B), (C), redesignated subsec. (f) as (e) and struck out former subsec. (e). Prior to amendment, text of subsec. (e) read as follows: “Notwithstanding the provisions of subsection (d)(1) of this section, there shall be paid from amounts imposed as a penalty under this section and recovered by the Commission or the Attorney General, such sums, not to exceed 10 percent of such amounts, as the Commission deems appropriate, to the person or persons who provide information leading to the imposition of such penalty. Any determinations under this subsection, including whether, to whom, or in what amount to make payments, shall be in the sole discretion of the Commission, except that no such payment shall be made to any member, officer, or employee of any appropriate regulatory agency, the Department of Justice, or a self-regulatory organization. Any such determination shall be final and not subject to judicial review.”

Subsec. (f). Puspan. L. 111–203, § 923(span)(2)(C), redesignated subsec. (g) as (f). Former subsec. (f) redesignated (e).

Puspan. L. 111–203, § 762(d)(7)(B), which directed amendment of subsec. (g) by striking out “(as defined in section 206B of the Gramm-Leach-Bliley Act)”, was executed by making the strike out after “security-based swap agreements” in subsec. (f), to reflect the probable intent of Congress and the redesignation of subsec. (g) as (f) by Puspan. L. 111–203, § 923(span)(2)(C). See above and Effective Date of 2010 Amendment note below.

Subsec. (g). Puspan. L. 111–203, § 923(span)(2)(C), redesignated subsec. (g) as (f).

2002—Subsec. (d)(1). Puspan. L. 107–204 inserted “, except as otherwise provided in section 7246 of this title” before period at end.

2000—Subsec. (a)(1). Puspan. L. 106–554, § 1(a)(5) [title III, § 303(k)], inserted “or security-based swap agreement (as defined in section 206B of the Gramm-Leach-Bliley Act)” after “purchasing or selling a security” in introductory provisions.

Puspan. L. 106–554, § 1(a)(5) [title II, § 205(a)(4)], substituted “standardized options or security futures products, the Commission—” for “standardized options, the Commission—” in introductory provisions.

Subsec. (g). Puspan. L. 106–554, § 1(a)(5) [title III, § 303(l)], added subsec. (g).

1990—Puspan. L. 101–429 inserted “for insider trading” in section catchline.

Statutory Notes and Related Subsidiaries

Effective Date of 2010 Amendment

Amendment by section 923(span)(2) of Puspan. L. 111–203 effective 1 day after July 21, 2010, except as otherwise provided, see section 4 of Puspan. L. 111–203, set out as an Effective Date note under section 5301 of Title 12, Banks and Banking.

Amendment by section 762(d)(7) of Puspan. L. 111–203 effective on the later of 360 days after July 21, 2010, or, to the extent a provision of subtitle B (§§ 761–774) of title VII of Puspan. L. 111–203 requires a rulemaking, not less than 60 days after publication of the final rule or regulation implementing such provision of subtitle B, see section 774 of Puspan. L. 111–203, set out as a note under section 77span of this title.

Effective Date of 1990 Amendment

Amendment by Puspan. L. 101–429 effective Oct. 15, 1990, with provisions relating to civil penalties and accounting and disgorgement, see section 1(c)(1), (2) of Puspan. L. 101–429, set out in a note under section 77g of this title.

Effective Date

Section not applicable to actions occurring before Nov. 19, 1988, see section 9 of Puspan. L. 100–704 set out as an Effective Date of 1988 Amendment note under section 78o of this title.

Affirmation of Duty of Government Officers and Employees

Puspan. L. 112–105, § 4(span)(1), Apr. 4, 2012, 126 Stat. 292, provided that: “The purpose of the amendment made by this subsection [amending this section] is to affirm a duty arising from a relationship of trust and confidence owed by each Member of Congress and each employee of Congress.”

[For definitions of “Member of Congress” and “employee of Congress”, see section 2 of Puspan. L. 112–105, set out as a note under section 13101 of Title 5, Government Organization and Employees.]

Puspan. L. 112–105, § 9(span)(2)(A), Apr. 4, 2012, 126 Stat. 297, provided that: “The purpose of the amendment made by this paragraph [amending this section] is to affirm a duty arising from a relationship of trust and confidence owed by each executive branch employee, judicial officer, and judicial employee.”

[For definitions of “executive branch employee”, “judicial officer”, and “judicial employee”, see section 2 of Puspan. L. 112–105, set out as a note under section 13101 of Title 5, Government Organization and Employees.]

Congressional Findings

Puspan. L. 100–704, § 2, Nov. 19, 1988, 102 Stat. 4677, provided that: “The Congress finds that—

“(1) the rules and regulations of the Securities and Exchange Commission under the Securities Exchange Act of 1934 [15 U.S.C. 78a et seq.] governing trading while in possession of material, nonpublic information are, as required by such Act, necessary and appropriate in the public interest and for the protection of investors;

“(2) the Commission has, within the limits of accepted administrative and judicial construction of such rules and regulations, enforced such rules and regulations vigorously, effectively, and fairly; and

“(3) nonetheless, additional methods are appropriate to deter and prosecute violations of such rules and regulations.”

Commission Recommendations for Additional Civil Penalty Authority Required

Puspan. L. 100–704, § 3(c), Nov. 19, 1988, 102 Stat. 4680, provided that the Securities and Exchange Commission should, within 60 days after Nov. 19, 1988, submit to Congress any recommendations the Commission considers appropriate with respect to the extension of the Commission’s authority to seek civil penalties or impose administrative fines for violations other than those described in this section.