II 

116TH CONGRESS 

1ST SESSION S. 799 

To amend the Securities Exchange Act of 1934 to clarify that the Securities 

and Exchange Commission may seek disgorgement and restitution as 

a result of a violation of the securities laws, to establish the statute 

of limitations for disgorgement and equitable actions brought by the 

Commission, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MARCH 14, 2019 

Mr. WARNER (for himself and Mr. KENNEDY) introduced the following bill; 

which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs 

A BILL 

To amend the Securities Exchange Act of 1934 to clarify 

that the Securities and Exchange Commission may seek 

disgorgement and restitution as a result of a violation 

of the securities laws, to establish the statute of limitations for disgorgement and equitable actions brought by 

the Commission, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Securities Fraud En5 forcement and Investor Compensation Act of 2019’’. 


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•S 799 IS

1 SEC. 2. INVESTIGATIONS AND PROSECUTION OF OFFENSES 

2 FOR VIOLATIONS OF THE SECURITIES LAWS. 

3 (a) IN GENERAL.—Section 21(d) of the Securities 

4 Exchange Act of 1934 (15 U.S.C. 78u(d)) is amended— 

5 (1) in paragraph (3)— 

6 (A) in the paragraph heading— 

7 (i) by inserting ‘‘CIVIL’’ before 

8 ‘‘MONEY PENALTIES’’; and 

9 (ii) by striking ‘‘IN CIVIL ACTIONS’’ 

10 and inserting ‘‘AND AUTHORITY TO SEEK

11 DISGORGEMENT’’; 

12 (B) in subparagraph (A), by striking ‘‘ju13 risdiction to impose’’ and all that follows 

14 through the period at the end and inserting the 

15 following: ‘‘jurisdiction to— 

16 ‘‘(i) impose, upon a proper showing, a civil 

17 penalty to be paid by the person who committed 

18 such violation; and 

19 ‘‘(ii) require disgorgement under para20 graph (7) by the person who received any un21 just enrichment as a result of such violation.’’; 

22 and 

23 (C) in subparagraph (B)— 

24 (i) in clause (i), in the first sentence, 

25 by striking ‘‘the penalty’’ and inserting ‘‘a 


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•S 799 IS

1 civil penalty imposed under subparagraph 

2 (A)(i)’’; 

3 (ii) in clause (ii), by striking ‘‘amount 

4 of penalty’’ and inserting ‘‘amount of a 

5 civil penalty imposed under subparagraph 

6 (A)(i)’’; and 

7 (iii) in clause (iii), in the matter pre8 ceding item (aa), by striking ‘‘amount of 

9 penalty for each such violation’’ and insert10 ing ‘‘amount of a civil penalty imposed 

11 under subparagraph (A)(i) for each viola12 tion described in that subparagraph’’; 

13 (2) in paragraph (4), by inserting ‘‘under para14 graph (7)’’ after ‘‘funds disgorged’’; and 

15 (3) by adding at the end the following: 

16 ‘‘(7) DISGORGEMENT.— 

17 ‘‘(A) IN GENERAL.—In any action or pro18 ceeding brought by the Commission under any provi19 sion of the securities laws, the Commission may 

20 seek, and any Federal court may order, disgorge21 ment of any unjust enrichment that a person ob22 tained as a result of a violation of that provision. 

23 ‘‘(B) CALCULATION.—Any disgorgement that is 

24 ordered with respect to a person under subpara25 graph (A) shall be offset by any amount of restituVerDate Sep 11 2014 03:13 Mar 27, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S799.IS S799

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•S 799 IS

1 tion that the person is ordered to pay under para2 graph (8). 

3 ‘‘(8) RESTITUTION.—In any proceeding brought or 

4 instituted by the Commission under any provision of the 

5 securities laws, the Commission may seek, and any Fed6 eral court, or, with respect to a proceeding instituted by 

7 the Commission, the Commission, may order restitution 

8 to an investor in the amount of the loss that the investor 

9 sustained as a result of a violation of that provision by 

10 a person that is— 

11 ‘‘(A) registered as, or required to be registered 

12 as, a broker, dealer, investment adviser, municipal 

13 securities dealer, municipal advisor, or transfer 

14 agent; or 

15 ‘‘(B) associated with or, as of the date on which 

16 the violation occurs, seeking to become associated 

17 with, an entity described in subparagraph (A). 

18 ‘‘(9) LIMITATIONS PERIODS.— 

19 ‘‘(A) DISGORGEMENT.—The Commission may 

20 bring a claim for disgorgement under paragraph (7) 

21 not later than 5 years after the date on which the 

22 person against which the claim is brought receives 

23 any unjust enrichment as a result of the violation 

24 that gives rise to the action or proceeding in which 

25 the Commission seeks the claim. 


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•S 799 IS

1 ‘‘(B) EQUITABLE REMEDIES.—The Commission 

2 may seek a claim for any equitable remedy, includ3 ing for restitution under paragraph (8), an injunc4 tion, or a bar, suspension, or cease and desist order, 

5 not later than 10 years after the latest date on 

6 which a violation that gives rise to the claim occurs. 

7 ‘‘(C) CALCULATION.—For the purposes of cal8 culating any limitations period under this paragraph 

9 with respect to an action or claim, any time in which 

10 the person against which the action or claim, as ap11 plicable, is brought is outside of the United States 

12 shall not count towards the accrual of that period. 

13 ‘‘(10) RULE OF CONSTRUCTION.—Nothing in para14 graph (7) or (8) may be construed as altering any right 

15 that any private party may have to maintain a suit for 

16 a violation of this Act.’’. 

17 (b) APPLICABILITY.—The amendments made by sub18 section (a) shall apply with respect to any action or pro19 ceeding that is commenced on or after the date of enact20 ment of this Act. 

Æ 


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