IB 

Union Calendar No. 331 

116TH CONGRESS 

2D SESSION H. R. 3641 

[Report No. 116–410] 

To enhance civil penalties under the Federal securities laws, and for other 

purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 9, 2019 

Ms. PORTER introduced the following bill; which was referred to the 

Committee on Financial Services 

FEBRUARY 27, 2020 

Reported with an amendment; committed to the Committee of the Whole 

House on the State of the Union and ordered to be printed 

[Strike out all after the enacting clause and insert the part printed in italic] 

[For text of introduced bill, see copy of bill as introduced on July 9, 2019] 


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A BILL 

To enhance civil penalties under the Federal securities laws, 

and for other purposes. 


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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 ‘‘Stronger Enforcement 

5 of Civil Penalties Act of 2019’’. 

6 SEC. 2. UPDATED CIVIL MONEY PENALTIES FOR SECURI7 TIES LAWS VIOLATIONS. 

8 (a) SECURITIES ACT OF 1933.— 

9 (1) MONEY PENALTIES IN ADMINISTRATIVE AC10 TIONS.—Section 8A(g)(2) of the Securities Act of 

11 1933 (15 U.S.C. 77h–1(g)(2)) is amended— 

12 (A) in subparagraph (A)— 

13 (i) by striking ‘‘$7,500’’ and inserting 

14 ‘‘$10,000’’; and 

15 (ii) by striking ‘‘$75,000’’ and insert16 ing ‘‘$100,000’’; 

17 (B) in subparagraph (B)— 

18 (i) by striking ‘‘$75,000’’ and inserting 

19 ‘‘$100,000’’; and 

20 (ii) by striking ‘‘$375,000’’ and insert21 ing ‘‘$500,000’’; and 

22 (C) by striking subparagraph (C) and in23 serting the following: 

24 ‘‘(C) THIRD TIER.— 


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1 ‘‘(i) IN GENERAL.—Notwithstanding 

2 subparagraphs (A) and (B), for a third tier 

3 act or omission, the amount of penalty for 

4 each such act or omission shall not exceed 

5 the greater of— 

6 ‘‘(I) $1,000,000 for a natural per7 son or $10,000,000 for any other per8 son; 

9 ‘‘(II) 3 times the gross amount of 

10 pecuniary gain to the person who com11 mitted the act or omission; or 

12 ‘‘(III) the amount of losses in13 curred by victims as a result of the act 

14 or omission. 

15 ‘‘(ii) THIRD TIER ACT OR OMISSION.— 

16 For the purposes of this subparagraph, the 

17 term ‘third tier act or omission’ means an 

18 act or omission described in paragraph (1) 

19 that— 

20 ‘‘(I) involved fraud, deceit, ma21 nipulation, or deliberate or reckless 

22 disregard of a regulatory requirement; 

23 and 

24 ‘‘(II) directly or indirectly— 


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1 ‘‘(aa) resulted in substantial 

2 losses to other persons; 

3 ‘‘(bb) created a significant 

4 risk of substantial losses to other 

5 persons; or 

6 ‘‘(cc) resulted in substantial 

7 pecuniary gain to the person who 

8 committed the act or omission.’’. 

9 (2) MONEY PENALTIES IN CIVIL ACTIONS.—Sec10 tion 20(d)(2) of the Securities Act of 1933 (15 U.S.C. 

11 77t(d)(2)) is amended— 

12 (A) in subparagraph (A)— 

13 (i) by striking ‘‘$5,000’’ and inserting 

14 ‘‘$10,000’’; and 

15 (ii) by striking ‘‘$50,000’’ and insert16 ing ‘‘$100,000’’; 

17 (B) in subparagraph (B)— 

18 (i) by striking ‘‘$50,000’’ and inserting 

19 ‘‘$100,000’’; and 

20 (ii) by striking ‘‘$250,000’’ and insert21 ing ‘‘$500,000’’; and 

22 (C) by striking subparagraph (C) and in23 serting the following: 

24 ‘‘(C) THIRD TIER.— 


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1 ‘‘(i) IN GENERAL.—Notwithstanding 

2 subparagraphs (A) and (B), for a third tier 

3 violation, the amount of penalty for each 

4 violation shall not exceed the greater of— 

5 ‘‘(I) $1,000,000 for a natural per6 son or $10,000,000 for any other per7 son; 

8 ‘‘(II) 3 times the gross amount of 

9 pecuniary gain to the person who com10 mitted the violation; or 

11 ‘‘(III) the amount of losses in12 curred by victims as a result of the vio13 lation. 

14 ‘‘(ii) THIRD TIER VIOLATION.—For the 

15 purposes of this subparagraph, the term 

16 ‘third tier violation’ means a violation de17 scribed in paragraph (1) that— 

18 ‘‘(I) involved fraud, deceit, ma19 nipulation, or deliberate or reckless 

20 disregard of a regulatory requirement; 

21 and 

22 ‘‘(II) directly or indirectly— 

23 ‘‘(aa) resulted in substantial 

24 losses to other persons; 


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1 ‘‘(bb) created a significant 

2 risk of substantial losses to other 

3 persons; or 

4 ‘‘(cc) resulted in substantial 

5 pecuniary gain to the person who 

6 committed the violation.’’. 

7 (b) SECURITIES EXCHANGE ACT OF 1934.— 

8 (1) MONEY PENALTIES IN CIVIL ACTIONS.—Sec9 tion 21(d)(3)(B) of the Securities Exchange Act of 

10 1934 (15 U.S.C. 78u(d)(3)(B)) is amended— 

11 (A) in clause (i)— 

12 (i) by striking ‘‘$5,000’’ and inserting 

13 ‘‘$10,000’’; and 

14 (ii) by striking ‘‘$50,000’’ and insert15 ing ‘‘$100,000’’; 

16 (B) in clause (ii)— 

17 (i) by striking ‘‘$50,000’’ and inserting 

18 ‘‘$100,000’’; and 

19 (ii) by striking ‘‘$250,000’’ and insert20 ing ‘‘$500,000’’; and 

21 (C) by striking clause (iii) and inserting 

22 the following: 

23 ‘‘(iii) THIRD TIER.— 

24 ‘‘(I) IN GENERAL.—Notwith25 standing clauses (i) and (ii), for a 


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1 third tier violation, the amount of pen2 alty for each such violation shall not 

3 exceed the greater of— 

4 ‘‘(aa) $1,000,000 for a nat5 ural person or $10,000,000 for 

6 any other person; 

7 ‘‘(bb) 3 times the gross 

8 amount of pecuniary gain to the 

9 person who committed the viola10 tion; or 

11 ‘‘(cc) the amount of losses in12 curred by victims as a result of 

13 the violation. 

14 ‘‘(II) THIRD TIER VIOLATION.— 

15 For the purposes of this clause, the 

16 term ‘third tier violation’ means a vio17 lation described in subparagraph (A) 

18 that— 

19 ‘‘(aa) involved fraud, deceit, 

20 manipulation, or deliberate or 

21 reckless disregard of a regulatory 

22 requirement; and 

23 ‘‘(bb) directly or indirectly— 


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1 ‘‘(AA) resulted in sub2 stantial losses to other per3 sons; 

4 ‘‘(BB) created a signifi5 cant risk of substantial losses 

6 to other persons; or 

7 ‘‘(CC) resulted in sub8 stantial pecuniary gain to 

9 the person who committed the 

10 violation.’’. 

11 (2) MONEY PENALTIES IN ADMINISTRATIVE AC12 TIONS.—Section 21B(b) of the Securities Exchange 

13 Act of 1934 (15 U.S.C. 78u–2(b)) is amended— 

14 (A) in paragraph (1)— 

15 (i) by striking ‘‘$5,000’’ and inserting 

16 ‘‘$10,000’’; and 

17 (ii) by striking ‘‘$50,000’’ and insert18 ing ‘‘$100,000’’; 

19 (B) in paragraph (2)— 

20 (i) by striking ‘‘$50,000’’ and inserting 

21 ‘‘$100,000’’; and 

22 (ii) by striking ‘‘$250,000’’ and insert23 ing ‘‘$500,000’’; and 

24 (C) by striking paragraph (3) and inserting 

25 the following: 


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1 ‘‘(3) THIRD TIER.— 

2 ‘‘(A) IN GENERAL.—Notwithstanding para3 graphs (1) and (2), for a third tier act or omis4 sion, the amount of penalty for each such act or 

5 omission shall not exceed the greater of— 

6 ‘‘(i) $1,000,000 for a natural person or 

7 $10,000,000 for any other person; 

8 ‘‘(ii) 3 times the gross amount of pecu9 niary gain to the person who committed the 

10 act or omission; or 

11 ‘‘(iii) the amount of losses incurred by 

12 victims as a result of the act or omission. 

13 ‘‘(B) THIRD TIER ACT OR OMISSION.—For 

14 the purposes of this paragraph, the term ‘third 

15 tier act or omission’ means an act or omission 

16 described in paragraph (1) that— 

17 ‘‘(i) involved fraud, deceit, manipula18 tion, or deliberate or reckless disregard of a 

19 regulatory requirement; and 

20 ‘‘(ii) directly or indirectly— 

21 ‘‘(I) resulted in substantial losses 

22 to other persons; 

23 ‘‘(II) created a significant risk of 

24 substantial losses to other persons; or 


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1 ‘‘(III) resulted in substantial pe2 cuniary gain to the person who com3 mitted the act or omission.’’. 

4 (c) INVESTMENT COMPANY ACT OF 1940.— 

5 (1) MONEY PENALTIES IN ADMINISTRATIVE AC6 TIONS.—Section 9(d)(2) of the Investment Company 

7 Act of 1940 (15 U.S.C. 80a–9(d)(2)) is amended— 

8 (A) in subparagraph (A)— 

9 (i) by striking ‘‘$5,000’’ and inserting 

10 ‘‘$10,000’’; and 

11 (ii) by striking ‘‘$50,000’’ and insert12 ing ‘‘$100,000’’; 

13 (B) in subparagraph (B)— 

14 (i) by striking ‘‘$50,000’’ and inserting 

15 ‘‘$100,000’’; and 

16 (ii) by striking ‘‘$250,000’’ and insert17 ing ‘‘$500,000’’; and 

18 (C) by striking subparagraph (C) and in19 serting the following: 

20 ‘‘(C) THIRD TIER.— 

21 ‘‘(i) IN GENERAL.—Notwithstanding 

22 subparagraphs (A) and (B), for a third tier 

23 act or omission, the amount of penalty for 

24 each such act or omission shall not exceed 

25 the greater of— 


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1 ‘‘(I) $1,000,000 for a natural per2 son or $10,000,000 for any other per3 son; 

4 ‘‘(II) 3 times the gross amount of 

5 pecuniary gain to the person who com6 mitted the act or omission; or 

7 ‘‘(III) the amount of losses in8 curred by victims as a result of the act 

9 or omission. 

10 ‘‘(ii) THIRD TIER ACT OR OMISSION.— 

11 For the purposes of this subparagraph, the 

12 term ‘third tier act or omission’ means an 

13 act or omission described in paragraph (1) 

14 that— 

15 ‘‘(I) involved fraud, deceit, ma16 nipulation, or deliberate or reckless 

17 disregard of a regulatory requirement; 

18 and 

19 ‘‘(II) directly or indirectly— 

20 ‘‘(aa) resulted in substantial 

21 losses to other persons; 

22 ‘‘(bb) created a significant 

23 risk of substantial losses to other 

24 persons; or 


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1 ‘‘(cc) resulted in substantial 

2 pecuniary gain to the person who 

3 committed the act or omission.’’. 

4 (2) MONEY PENALTIES IN CIVIL ACTIONS.—Sec5 tion 42(e)(2) of the Investment Company Act of 1940 

6 (15 U.S.C. 80a–41(e)(2)) is amended— 

7 (A) in subparagraph (A)— 

8 (i) by striking ‘‘$5,000’’ and inserting 

9 ‘‘$10,000’’; and 

10 (ii) by striking ‘‘$50,000’’ and insert11 ing ‘‘$100,000’’; 

12 (B) in subparagraph (B)— 

13 (i) by striking ‘‘$50,000’’ and inserting 

14 ‘‘$100,000’’; and 

15 (ii) by striking ‘‘$250,000’’ and insert16 ing ‘‘$500,000’’; and 

17 (C) by striking subparagraph (C) and in18 serting the following: 

19 ‘‘(C) THIRD TIER.— 

20 ‘‘(i) IN GENERAL.—Notwithstanding 

21 subparagraphs (A) and (B), for a third tier 

22 violation, the amount of penalty for each 

23 such violation shall not exceed the greater 

24 of— 


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1 ‘‘(I) $1,000,000 for a natural per2 son or $10,000,000 for any other per3 son; 

4 ‘‘(II) 3 times the gross amount of 

5 pecuniary gain to the person who com6 mitted the violation; or 

7 ‘‘(III) the amount of losses in8 curred by victims as a result of the vio9 lation. 

10 ‘‘(ii) THIRD TIER VIOLATION.—For the 

11 purposes of this subparagraph, the term 

12 ‘third tier violation’ means a violation de13 scribed in paragraph (1) that— 

14 ‘‘(I) involved fraud, deceit, ma15 nipulation, or deliberate or reckless 

16 disregard of a regulatory requirement; 

17 and 

18 ‘‘(II) directly or indirectly— 

19 ‘‘(aa) resulted in substantial 

20 losses to other persons; 

21 ‘‘(bb) created a significant 

22 risk of substantial losses to other 

23 persons; or 


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1 ‘‘(cc) resulted in substantial 

2 pecuniary gain to the person who 

3 committed the violation.’’. 

4 (d) INVESTMENT ADVISERS ACT OF 1940.— 

5 (1) MONEY PENALTIES IN ADMINISTRATIVE AC6 TIONS.—Section 203(i)(2) of the Investment Advisers 

7 Act of 1940 (15 U.S.C. 80b–3(i)(2)) is amended— 

8 (A) in subparagraph (A)— 

9 (i) by striking ‘‘$5,000’’ and inserting 

10 ‘‘$10,000’’; and 

11 (ii) by striking ‘‘$50,000’’ and insert12 ing ‘‘$100,000’’; 

13 (B) in subparagraph (B)— 

14 (i) by striking ‘‘$50,000’’ and inserting 

15 ‘‘$100,000’’; and 

16 (ii) by striking ‘‘$250,000’’ and insert17 ing ‘‘$500,000’’; and 

18 (C) by striking subparagraph (C) and in19 serting the following: 

20 ‘‘(C) THIRD TIER.— 

21 ‘‘(i) IN GENERAL.—Notwithstanding 

22 subparagraphs (A) and (B), for a third tier 

23 act or omission, the amount of penalty for 

24 each such act or omission shall not exceed 

25 the greater of— 


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1 ‘‘(I) $1,000,000 for a natural per2 son or $10,000,000 for any other per3 son; 

4 ‘‘(II) 3 times the gross amount of 

5 pecuniary gain to the person who com6 mitted the act or omission; or 

7 ‘‘(III) the amount of losses in8 curred by victims as a result of the act 

9 or omission. 

10 ‘‘(ii) THIRD TIER ACT OR OMISSION.— 

11 For the purposes of this subparagraph, the 

12 term ‘third tier act or omission’ means an 

13 act or omission described in paragraph (1) 

14 that— 

15 ‘‘(I) involved fraud, deceit, ma16 nipulation, or deliberate or reckless 

17 disregard of a regulatory requirement; 

18 and 

19 ‘‘(II) directly or indirectly— 

20 ‘‘(aa) resulted in substantial 

21 losses to other persons; 

22 ‘‘(bb) created a significant 

23 risk of substantial losses to other 

24 persons; or 


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1 ‘‘(cc) resulted in substantial 

2 pecuniary gain to the person who 

3 committed the act or omission.’’. 

4 (2) MONEY PENALTIES IN CIVIL ACTIONS.—Sec5 tion 209(e)(2) of the Investment Advisers Act of 1940 

6 (15 U.S.C. 80b–9(e)(2)) is amended— 

7 (A) in subparagraph (A)— 

8 (i) by striking ‘‘$5,000’’ and inserting 

9 ‘‘$10,000’’; and 

10 (ii) by striking ‘‘$50,000’’ and insert11 ing ‘‘$100,000’’; 

12 (B) in subparagraph (B)— 

13 (i) by striking ‘‘$50,000’’ and inserting 

14 ‘‘$100,000’’; and 

15 (ii) by striking ‘‘$250,000’’ and insert16 ing ‘‘$500,000’’; and 

17 (C) by striking subparagraph (C) and in18 serting the following: 

19 ‘‘(C) THIRD TIER.— 

20 ‘‘(i) IN GENERAL.—Notwithstanding 

21 subparagraphs (A) and (B), for a third tier 

22 violation, the amount of penalty for each 

23 such violation shall not exceed the greater 

24 of— 


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1 ‘‘(I) $1,000,000 for a natural per2 son or $10,000,000 for any other per3 son; 

4 ‘‘(II) 3 times the gross amount of 

5 pecuniary gain to the person who com6 mitted the violation; or 

7 ‘‘(III) the amount of losses in8 curred by victims as a result of the vio9 lation. 

10 ‘‘(ii) THIRD TIER VIOLATION.—For the 

11 purposes of this subparagraph, the term 

12 ‘third tier violation’ means a violation de13 scribed in paragraph (1) that— 

14 ‘‘(I) involved fraud, deceit, ma15 nipulation, or deliberate or reckless 

16 disregard of a regulatory requirement; 

17 and 

18 ‘‘(II) directly or indirectly— 

19 ‘‘(aa) resulted in substantial 

20 losses to other persons; 

21 ‘‘(bb) created a significant 

22 risk of substantial losses to other 

23 persons; or 


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1 ‘‘(cc) resulted in substantial 

2 pecuniary gain to the person who 

3 committed the violation.’’. 

4 SEC. 3. PENALTIES FOR RECIDIVISTS. 

5 (a) SECURITIES ACT OF 1933.— 

6 (1) CEASE-AND-DESIST PROCEEDINGS.—Section 

7 8A(g)(2) of the Securities Act of 1933 (15 U.S.C. 

8 77h–1(g)(2)) is amended by adding at the end the fol9 lowing: 

10 ‘‘(D) FOURTH TIER.—Notwithstanding sub11 paragraphs (A), (B), and (C), the maximum 

12 amount of penalty for each such act or omission 

13 shall be 3 times the otherwise applicable amount 

14 in such subparagraphs if, within the 5-year pe15 riod preceding such act or omission, the person 

16 who committed the act or omission was crimi17 nally convicted for securities fraud or became 

18 subject to a judgment or order imposing mone19 tary, equitable, or administrative relief in any 

20 Commission action alleging fraud by that per21 son.’’. 

22 (2) INJUNCTIONS AND PROSECUTION OF OF23 FENSES.—Section 20(d)(2) of the Securities Act of 

24 1933 (15 U.S.C. 77t(d)(2)) is amended by adding at 

25 the end the following: 


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1 ‘‘(D) FOURTH TIER.—Notwithstanding sub2 paragraphs (A), (B), and (C), the maximum 

3 amount of penalty for each such violation shall 

4 be 3 times the otherwise applicable amount in 

5 such subparagraphs if, within the 5-year period 

6 preceding such violation, the defendant was 

7 criminally convicted for securities fraud or be8 came subject to a judgment or order imposing 

9 monetary, equitable, or administrative relief in 

10 any Commission action alleging fraud by that 

11 defendant.’’. 

12 (b) SECURITIES EXCHANGE ACT OF 1934.— 

13 (1) CIVIL ACTIONS.—Section 21(d)(3)(B) of the 

14 Securities Exchange Act of 1934 (15 U.S.C. 

15 78u(d)(3)(B)) is amended by adding at the end the 

16 following: 

17 ‘‘(iv) FOURTH TIER.—Notwithstanding 

18 clauses (i), (ii), and (iii), the maximum amount 

19 of penalty for each such violation shall be 3 

20 times the otherwise applicable amount in such 

21 clauses if, within the 5-year period preceding 

22 such violation, the defendant was criminally 

23 convicted for securities fraud or became subject 

24 to a judgment or order imposing monetary, equiVerDate Sep 11 2014 21:56 Feb 27, 2020 Jkt 099200 PO 00000 Frm 00020 Fmt 6652 Sfmt 6203 E:\BILLS\H3641.RH H3641

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1 table, or administrative relief in any Commis2 sion action alleging fraud by that defendant.’’. 

3 (2) ADMINISTRATIVE PROCEEDINGS.—Section 

4 21B(b) of the Securities Exchange Act of 1934 (15 

5 U.S.C. 78u–2(b)) is amended by adding at the end 

6 the following: 

7 ‘‘(4) FOURTH TIER.—Notwithstanding para8 graphs (1), (2), and (3), the maximum amount of 

9 penalty for each such act or omission shall be 3 times 

10 the otherwise applicable amount in such paragraphs 

11 if, within the 5-year period preceding such act or 

12 omission, the person who committed the act or omis13 sion was criminally convicted for securities fraud or 

14 became subject to a judgment or order imposing mon15 etary, equitable, or administrative relief in any Com16 mission action alleging fraud by that person.’’. 

17 (c) INVESTMENT COMPANY ACT OF 1940.— 

18 (1) INELIGIBILITY OF CERTAIN UNDERWRITERS

19 AND AFFILIATES.—Section 9(d)(2) of the Investment 

20 Company Act of 1940 (15 U.S.C. 80a–9(d)(2)) is 

21 amended by adding at the end the following: 

22 ‘‘(D) FOURTH TIER.—Notwithstanding sub23 paragraphs (A), (B), and (C), the maximum 

24 amount of penalty for each such act or omission 

25 shall be 3 times the otherwise applicable amount 


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1 in such subparagraphs if, within the 5-year pe2 riod preceding such act or omission, the person 

3 who committed the act or omission was crimi4 nally convicted for securities fraud or became 

5 subject to a judgment or order imposing mone6 tary, equitable, or administrative relief in any 

7 Commission action alleging fraud by that per8 son.’’. 

9 (2) ENFORCEMENT OF CERTAIN ACTIONS.—Sec10 tion 42(e)(2) of the Investment Company Act of 1940 

11 (15 U.S.C. 80a–41(e)(2)) is amended by adding at the 

12 end the following: 

13 ‘‘(D) FOURTH TIER.—Notwithstanding sub14 paragraphs (A), (B), and (C), the maximum 

15 amount of penalty for each such violation shall 

16 be 3 times the otherwise applicable amount in 

17 such subparagraphs if, within the 5-year period 

18 preceding such violation, the defendant was 

19 criminally convicted for securities fraud or be20 came subject to a judgment or order imposing 

21 monetary, equitable, or administrative relief in 

22 any Commission action alleging fraud by that 

23 defendant.’’. 


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1 (d) INVESTMENT ADVISERS ACT OF 1940.—The Invest2 ment Advisers Act of 1940 (15 U.S.C. 80b–1 et seq.) is 

3 amended— 

4 (1) in section 203(i)(2) (15 U.S.C. 80b–3(i)(2)), 

5 by adding at the end the following: 

6 ‘‘(D) FOURTH TIER.—Notwithstanding sub7 paragraphs (A), (B), and (C), the maximum 

8 amount of penalty for each such act or omission 

9 shall be 3 times the otherwise applicable amount 

10 in such subparagraphs if, within the 5-year pe11 riod preceding such act or omission, the person 

12 who committed the act or omission was crimi13 nally convicted for securities fraud or became 

14 subject to a judgment or order imposing mone15 tary, equitable, or administrative relief in any 

16 Commission action alleging fraud by that per17 son.’’; and 

18 (2) in section 209(e)(2) (15 U.S.C. 80b–9(e)(2)) 

19 by adding at the end the following: 

20 ‘‘(D) FOURTH TIER.—Notwithstanding sub21 paragraphs (A), (B), and (C), the maximum 

22 amount of penalty for each such violation shall 

23 be 3 times the otherwise applicable amount in 

24 such subparagraphs if, within the 5-year period 

25 preceding such violation, the defendant was 


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1 criminally convicted for securities fraud or be2 came subject to a judgment or order imposing 

3 monetary, equitable, or administrative relief in 

4 any Commission action alleging fraud by that 

5 defendant.’’. 

6 SEC. 4. VIOLATIONS OF INJUNCTIONS AND BARS. 

7 (a) SECURITIES ACT OF 1933.—Section 20(d) of the 

8 Securities Act of 1933 (15 U.S.C. 77t(d)) is amended— 

9 (1) in paragraph (1), by inserting after ‘‘the 

10 rules or regulations thereunder,’’ the following: ‘‘a 

11 Federal court injunction or a bar obtained or entered 

12 by the Commission under this title,’’; and 

13 (2) by striking paragraph (4) and inserting the 

14 following: 

15 ‘‘(4) SPECIAL PROVISIONS RELATING TO A VIOLA16 TION OF AN INJUNCTION OR CERTAIN ORDERS.— 

17 ‘‘(A) IN GENERAL.—Each separate violation 

18 of an injunction or order described in subpara19 graph (B) shall be a separate offense, except that 

20 in the case of a violation through a continuing 

21 failure to comply with such injunction or order, 

22 each day of the failure to comply with the in23 junction or order shall be deemed a separate of24 fense. 


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1 ‘‘(B) INJUNCTIONS AND ORDERS.—Subpara2 graph (A) shall apply with respect to any action 

3 to enforce— 

4 ‘‘(i) a Federal court injunction ob5 tained pursuant to this title; 

6 ‘‘(ii) an order entered or obtained by 

7 the Commission pursuant to this title that 

8 bars, suspends, places limitations on the ac9 tivities or functions of, or prohibits the ac10 tivities of a person; or 

11 ‘‘(iii) a cease-and-desist order entered 

12 by the Commission pursuant to section 

13 8A.’’. 

14 (b) SECURITIES EXCHANGE ACT OF 1934.—Section 

15 21(d)(3) of the Securities Exchange Act of 1934 (15 U.S.C. 

16 78u(d)(3)) is amended— 

17 (1) in subparagraph (A), by inserting after ‘‘the 

18 rules or regulations thereunder,’’ the following: ‘‘a 

19 Federal court injunction or a bar obtained or entered 

20 by the Commission under this title,’’; and 

21 (2) by striking subparagraph (D) and inserting 

22 the following: 

23 ‘‘(D) SPECIAL PROVISIONS RELATING TO A VIO24 LATION OF AN INJUNCTION OR CERTAIN ORDERS.— 


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1 ‘‘(i) IN GENERAL.—Each separate violation 

2 of an injunction or order described in clause (ii) 

3 shall be a separate offense, except that in the case 

4 of a violation through a continuing failure to 

5 comply with such injunction or order, each day 

6 of the failure to comply with the injunction or 

7 order shall be deemed a separate offense. 

8 ‘‘(ii) INJUNCTIONS AND ORDERS.—Clause 

9 (i) shall apply with respect to an action to en10 force— 

11 ‘‘(I) a Federal court injunction ob12 tained pursuant to this title; 

13 ‘‘(II) an order entered or obtained by 

14 the Commission pursuant to this title that 

15 bars, suspends, places limitations on the ac16 tivities or functions of, or prohibits the ac17 tivities of a person; or 

18 ‘‘(III) a cease-and-desist order entered 

19 by the Commission pursuant to section 

20 21C.’’. 

21 (c) INVESTMENT COMPANY ACT OF 1940.—Section 

22 42(e) of the Investment Company Act of 1940 (15 U.S.C. 

23 80a–41(e)) is amended— 

24 (1) in paragraph (1), by inserting after ‘‘the 

25 rules or regulations thereunder,’’ the following: ‘‘a 


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27 

•HR 3641 RH

1 Federal court injunction or a bar obtained or entered 

2 by the Commission under this title,’’; and 

3 (2) by striking paragraph (4) and inserting the 

4 following: 

5 ‘‘(4) SPECIAL PROVISIONS RELATING TO A VIOLA6 TION OF AN INJUNCTION OR CERTAIN ORDERS.— 

7 ‘‘(A) IN GENERAL.—Each separate violation 

8 of an injunction or order described in subpara9 graph (B) shall be a separate offense, except that 

10 in the case of a violation through a continuing 

11 failure to comply with such injunction or order, 

12 each day of the failure to comply with the in13 junction or order shall be deemed a separate of14 fense. 

15 ‘‘(B) INJUNCTIONS AND ORDERS.—Subpara16 graph (A) shall apply with respect to any action 

17 to enforce— 

18 ‘‘(i) a Federal court injunction ob19 tained pursuant to this title; 

20 ‘‘(ii) an order entered or obtained by 

21 the Commission pursuant to this title that 

22 bars, suspends, places limitations on the ac23 tivities or functions of, or prohibits the ac24 tivities of a person; or 


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28 

•HR 3641 RH

1 ‘‘(iii) a cease-and-desist order entered 

2 by the Commission pursuant to section 

3 9(f).’’. 

4 (d) INVESTMENT ADVISERS ACT OF 1940.—Section 

5 209(e) of the Investment Advisers Act of 1940 (15 U.S.C. 

6 80b–9(e)) is amended— 

7 (1) in paragraph (1), by inserting after ‘‘the 

8 rules or regulations thereunder,’’ the following: ‘‘a 

9 Federal court injunction or a bar obtained or entered 

10 by the Commission under this title,’’; and 

11 (2) by striking paragraph (4) and inserting the 

12 following: 

13 ‘‘(4) SPECIAL PROVISIONS RELATING TO A VIOLA14 TION OF AN INJUNCTION OR CERTAIN ORDERS.— 

15 ‘‘(A) IN GENERAL.—Each separate violation 

16 of an injunction or order described in subpara17 graph (B) shall be a separate offense, except that 

18 in the case of a violation through a continuing 

19 failure to comply with such injunction or order, 

20 each day of the failure to comply with the in21 junction or order shall be deemed a separate of22 fense. 

23 ‘‘(B) INJUNCTIONS AND ORDERS.—Subpara24 graph (A) shall apply with respect to any action 

25 to enforce— 


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29 

•HR 3641 RH

1 ‘‘(i) a Federal court injunction ob2 tained pursuant to this title; 

3 ‘‘(ii) an order entered or obtained by 

4 the Commission pursuant to this title that 

5 bars, suspends, places limitations on the ac6 tivities or functions of, or prohibits the ac7 tivities of a person; or 

8 ‘‘(iii) a cease-and-desist order entered 

9 by the Commission pursuant to section 

10 203(k).’’. 


kjohnson on DSK79L0C42PROD with BILLS
Union Calendar No. 331 

116TH CONGRESS 

2D SESSION H. R. 3641 

[Report No. 116–410] 

A BILL 

To enhance civil penalties under the Federal 

securities laws, and for other purposes. 

FEBRUARY 27, 2020 

Reported with an amendment; committed to the Comand ordered to be printed mittee of the Whole House on the State of the Union 


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