I 

116TH CONGRESS 

1ST SESSION H. R. 3641 

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 

A BILL 

To enhance civil penalties under the Federal securities laws, 

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 ‘‘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.— 


pamtmann on DSKBFK8HB2PROD with BILLS
2 

•HR 3641 IH

1 (1) MONEY PENALTIES IN ADMINISTRATIVE AC2 TIONS.—Section 8A(g)(2) of the Securities Act of 

3 1933 (15 U.S.C. 77h–1(g)(2)) is amended— 

4 (A) in subparagraph (A)— 

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

6 ‘‘$10,000’’; and 

7 (ii) by striking ‘‘$75,000’’ and insert8 ing ‘‘$100,000’’; 

9 (B) in subparagraph (B)— 

10 (i) by striking ‘‘$75,000’’ and insert11 ing ‘‘$100,000’’; and 

12 (ii) by striking ‘‘$375,000’’ and in13 serting ‘‘$500,000’’; and 

14 (C) by striking subparagraph (C) and in15 serting the following: 

16 ‘‘(C) THIRD TIER.— 

17 ‘‘(i) IN GENERAL.—Notwithstanding 

18 subparagraphs (A) and (B), for a third 

19 tier act or omission, the amount of penalty 

20 for each such act or omission shall not ex21 ceed the greater of— 

22 ‘‘(I) $1,000,000 for a natural 

23 person or $10,000,000 for any other 

24 person; 


pamtmann on DSKBFK8HB2PROD with BILLS
3 

•HR 3641 IH

1 ‘‘(II) 3 times the gross amount of 

2 pecuniary gain to the person who 

3 committed the act or omission; or 

4 ‘‘(III) the amount of losses in5 curred by victims as a result of the 

6 act or omission. 

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

8 For the purposes of this subparagraph, the 

9 term ‘third tier act or omission’ means an 

10 act or omission described in paragraph (1) 

11 that— 

12 ‘‘(I) involved fraud, deceit, ma13 nipulation, or deliberate or reckless 

14 disregard of a regulatory requirement; 

15 and 

16 ‘‘(II) directly or indirectly— 

17 ‘‘(aa) resulted in substantial 

18 losses to other persons; 

19 ‘‘(bb) created a significant 

20 risk of substantial losses to other 

21 persons; or 

22 ‘‘(cc) resulted in substantial 

23 pecuniary gain to the person who 

24 committed the act or omission.’’. 


pamtmann on DSKBFK8HB2PROD with BILLS
4 

•HR 3641 IH

1 (2) MONEY PENALTIES IN CIVIL ACTIONS.— 

2 Section 20(d)(2) of the Securities Act of 1933 (15 

3 U.S.C. 77t(d)(2)) is amended— 

4 (A) in subparagraph (A)— 

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

6 ‘‘$10,000’’; and 

7 (ii) by striking ‘‘$50,000’’ and insert8 ing ‘‘$100,000’’; 

9 (B) in subparagraph (B)— 

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

12 (ii) by striking ‘‘$250,000’’ and in13 serting ‘‘$500,000’’; and 

14 (C) by striking subparagraph (C) and in15 serting the following: 

16 ‘‘(C) THIRD TIER.— 

17 ‘‘(i) IN GENERAL.—Notwithstanding 

18 subparagraphs (A) and (B), for a third 

19 tier violation, the amount of penalty for 

20 each violation shall not exceed the greater 

21 of— 

22 ‘‘(I) $1,000,000 for a natural 

23 person or $10,000,000 for any other 

24 person; 


pamtmann on DSKBFK8HB2PROD with BILLS
5 

•HR 3641 IH

1 ‘‘(II) 3 times the gross amount of 

2 pecuniary gain to the person who 

3 committed the violation; or 

4 ‘‘(III) the amount of losses in5 curred by victims as a result of the 

6 violation. 

7 ‘‘(ii) THIRD TIER VIOLATION.—For 

8 the purposes of this subparagraph, the 

9 term ‘third tier violation’ means a violation 

10 described in paragraph (1) that— 

11 ‘‘(I) involved fraud, deceit, ma12 nipulation, or deliberate or reckless 

13 disregard of a regulatory requirement; 

14 and 

15 ‘‘(II) directly or indirectly— 

16 ‘‘(aa) resulted in substantial 

17 losses to other persons; 

18 ‘‘(bb) created a significant 

19 risk of substantial losses to other 

20 persons; or 

21 ‘‘(cc) resulted in substantial 

22 pecuniary gain to the person who 

23 committed the violation.’’. 

24 (b) SECURITIES EXCHANGE ACT OF 1934.— 


pamtmann on DSKBFK8HB2PROD with BILLS
6 

•HR 3641 IH

1 (1) MONEY PENALTIES IN CIVIL ACTIONS.— 

2 Section 21(d)(3)(B) of the Securities Exchange Act 

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

4 (A) in clause (i)— 

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

6 ‘‘$10,000’’; and 

7 (ii) by striking ‘‘$50,000’’ and insert8 ing ‘‘$100,000’’; 

9 (B) in clause (ii)— 

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

12 (ii) by striking ‘‘$250,000’’ and in13 serting ‘‘$500,000’’; and 

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

15 the following: 

16 ‘‘(iii) THIRD TIER.— 

17 ‘‘(I) IN GENERAL.—Notwith18 standing clauses (i) and (ii), for a 

19 third tier violation, the amount of 

20 penalty for each such violation shall 

21 not exceed the greater of— 

22 ‘‘(aa) $1,000,000 for a nat23 ural person or $10,000,000 for 

24 any other person; 


pamtmann on DSKBFK8HB2PROD with BILLS
7 

•HR 3641 IH

1 ‘‘(bb) 3 times the gross 

2 amount of pecuniary gain to the 

3 person who committed the viola4 tion; or 

5 ‘‘(cc) the amount of losses 

6 incurred by victims as a result of 

7 the violation. 

8 ‘‘(II) THIRD TIER VIOLATION.— 

9 For the purposes of this clause, the 

10 term ‘third tier violation’ means a vio11 lation described in subparagraph (A) 

12 that— 

13 ‘‘(aa) involved fraud, deceit, 

14 manipulation, or deliberate or 

15 reckless disregard of a regulatory 

16 requirement; and 

17 ‘‘(bb) directly or indirectly— 

18 ‘‘(AA) resulted in sub19 stantial losses to other per20 sons; 

21 ‘‘(BB) created a signifi22 cant risk of substantial 

23 losses to other persons; or 

24 ‘‘(CC) resulted in sub25 stantial pecuniary gain to 


pamtmann on DSKBFK8HB2PROD with BILLS
8 

•HR 3641 IH

1 the person who committed 

2 the violation.’’. 

3 (2) MONEY PENALTIES IN ADMINISTRATIVE AC4 TIONS.—Section 21B(b) of the Securities Exchange 

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

6 (A) in paragraph (1)— 

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

8 ‘‘$10,000’’; and 

9 (ii) by striking ‘‘$50,000’’ and insert10 ing ‘‘$100,000’’; 

11 (B) in paragraph (2)— 

12 (i) by striking ‘‘$50,000’’ and insert13 ing ‘‘$100,000’’; and 

14 (ii) by striking ‘‘$250,000’’ and in15 serting ‘‘$500,000’’; and 

16 (C) by striking paragraph (3) and insert17 ing the following: 

18 ‘‘(3) THIRD TIER.— 

19 ‘‘(A) IN GENERAL.—Notwithstanding 

20 paragraphs (1) and (2), for a third tier act or 

21 omission, the amount of penalty for each such 

22 act or omission shall not exceed the greater 

23 of— 

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

25 or $10,000,000 for any other person; 


pamtmann on DSKBFK8HB2PROD with BILLS
9 

•HR 3641 IH

1 ‘‘(ii) 3 times the gross amount of pe2 cuniary gain to the person who committed 

3 the act or omission; or 

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

5 victims as a result of the act or omission. 

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

7 the purposes of this paragraph, the term ‘third 

8 tier act or omission’ means an act or omission 

9 described in paragraph (1) that— 

10 ‘‘(i) involved fraud, deceit, manipula11 tion, or deliberate or reckless disregard of 

12 a regulatory requirement; and 

13 ‘‘(ii) directly or indirectly— 

14 ‘‘(I) resulted in substantial losses 

15 to other persons; 

16 ‘‘(II) created a significant risk of 

17 substantial losses to other persons; or 

18 ‘‘(III) resulted in substantial pe19 cuniary gain to the person who com20 mitted the act or omission.’’. 

21 (c) INVESTMENT COMPANY ACT OF 1940.— 

22 (1) MONEY PENALTIES IN ADMINISTRATIVE AC23 TIONS.—Section 9(d)(2) of the Investment Company 

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

25 (A) in subparagraph (A)— 


pamtmann on DSKBFK8HB2PROD with BILLS
10 

•HR 3641 IH

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

2 ‘‘$10,000’’; and 

3 (ii) by striking ‘‘$50,000’’ and insert4 ing ‘‘$100,000’’; 

5 (B) in subparagraph (B)— 

6 (i) by striking ‘‘$50,000’’ and insert7 ing ‘‘$100,000’’; and 

8 (ii) by striking ‘‘$250,000’’ and in9 serting ‘‘$500,000’’; and 

10 (C) by striking subparagraph (C) and in11 serting the following: 

12 ‘‘(C) THIRD TIER.— 

13 ‘‘(i) IN GENERAL.—Notwithstanding 

14 subparagraphs (A) and (B), for a third 

15 tier act or omission, the amount of penalty 

16 for each such act or omission shall not ex17 ceed the greater of— 

18 ‘‘(I) $1,000,000 for a natural 

19 person or $10,000,000 for any other 

20 person; 

21 ‘‘(II) 3 times the gross amount of 

22 pecuniary gain to the person who 

23 committed the act or omission; or 


pamtmann on DSKBFK8HB2PROD with BILLS
11 

•HR 3641 IH

1 ‘‘(III) the amount of losses in2 curred by victims as a result of the 

3 act or omission. 

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

5 For the purposes of this subparagraph, the 

6 term ‘third tier act or omission’ means an 

7 act or omission described in paragraph (1) 

8 that— 

9 ‘‘(I) involved fraud, deceit, ma10 nipulation, or deliberate or reckless 

11 disregard of a regulatory requirement; 

12 and 

13 ‘‘(II) directly or indirectly— 

14 ‘‘(aa) resulted in substantial 

15 losses to other persons; 

16 ‘‘(bb) created a significant 

17 risk of substantial losses to other 

18 persons; or 

19 ‘‘(cc) resulted in substantial 

20 pecuniary gain to the person who 

21 committed the act or omission.’’. 

22 (2) MONEY PENALTIES IN CIVIL ACTIONS.— 

23 Section 42(e)(2) of the Investment Company Act of 

24 1940 (15 U.S.C. 80a–41(e)(2)) is amended— 

25 (A) in subparagraph (A)— 


pamtmann on DSKBFK8HB2PROD with BILLS
12 

•HR 3641 IH

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

2 ‘‘$10,000’’; and 

3 (ii) by striking ‘‘$50,000’’ and insert4 ing ‘‘$100,000’’; 

5 (B) in subparagraph (B)— 

6 (i) by striking ‘‘$50,000’’ and insert7 ing ‘‘$100,000’’; and 

8 (ii) by striking ‘‘$250,000’’ and in9 serting ‘‘$500,000’’; and 

10 (C) by striking subparagraph (C) and in11 serting the following: 

12 ‘‘(C) THIRD TIER.— 

13 ‘‘(i) IN GENERAL.—Notwithstanding 

14 subparagraphs (A) and (B), for a third 

15 tier violation, the amount of penalty for 

16 each such violation shall not exceed the 

17 greater of— 

18 ‘‘(I) $1,000,000 for a natural 

19 person or $10,000,000 for any other 

20 person; 

21 ‘‘(II) 3 times the gross amount of 

22 pecuniary gain to the person who 

23 committed the violation; or 


pamtmann on DSKBFK8HB2PROD with BILLS
13 

•HR 3641 IH

1 ‘‘(III) the amount of losses in2 curred by victims as a result of the 

3 violation. 

4 ‘‘(ii) THIRD TIER VIOLATION.—For 

5 the purposes of this subparagraph, the 

6 term ‘third tier violation’ means a violation 

7 described in paragraph (1) that— 

8 ‘‘(I) involved fraud, deceit, ma9 nipulation, or deliberate or reckless 

10 disregard of a regulatory requirement; 

11 and 

12 ‘‘(II) directly or indirectly— 

13 ‘‘(aa) resulted in substantial 

14 losses to other persons; 

15 ‘‘(bb) created a significant 

16 risk of substantial losses to other 

17 persons; or 

18 ‘‘(cc) resulted in substantial 

19 pecuniary gain to the person who 

20 committed the violation.’’. 

21 (d) INVESTMENT ADVISERS ACT OF 1940.— 

22 (1) MONEY PENALTIES IN ADMINISTRATIVE AC23 TIONS.—Section 203(i)(2) of the Investment Advis24 ers Act of 1940 (15 U.S.C. 80b–3(i)(2)) is amend25 ed— 


pamtmann on DSKBFK8HB2PROD with BILLS
14 

•HR 3641 IH

1 (A) in subparagraph (A)— 

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

3 ‘‘$10,000’’; and 

4 (ii) by striking ‘‘$50,000’’ and insert5 ing ‘‘$100,000’’; 

6 (B) in subparagraph (B)— 

7 (i) by striking ‘‘$50,000’’ and insert8 ing ‘‘$100,000’’; and 

9 (ii) by striking ‘‘$250,000’’ and in10 serting ‘‘$500,000’’; and 

11 (C) by striking subparagraph (C) and in12 serting the following: 

13 ‘‘(C) THIRD TIER.— 

14 ‘‘(i) IN GENERAL.—Notwithstanding 

15 subparagraphs (A) and (B), for a third 

16 tier act or omission, the amount of penalty 

17 for each such act or omission shall not ex18 ceed the greater of— 

19 ‘‘(I) $1,000,000 for a natural 

20 person or $10,000,000 for any other 

21 person; 

22 ‘‘(II) 3 times the gross amount of 

23 pecuniary gain to the person who 

24 committed the act or omission; or 


pamtmann on DSKBFK8HB2PROD with BILLS
15 

•HR 3641 IH

1 ‘‘(III) the amount of losses in2 curred by victims as a result of the 

3 act or omission. 

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

5 For the purposes of this subparagraph, the 

6 term ‘third tier act or omission’ means an 

7 act or omission described in paragraph (1) 

8 that— 

9 ‘‘(I) involved fraud, deceit, ma10 nipulation, or deliberate or reckless 

11 disregard of a regulatory requirement; 

12 and 

13 ‘‘(II) directly or indirectly— 

14 ‘‘(aa) resulted in substantial 

15 losses to other persons; 

16 ‘‘(bb) created a significant 

17 risk of substantial losses to other 

18 persons; or 

19 ‘‘(cc) resulted in substantial 

20 pecuniary gain to the person who 

21 committed the act or omission.’’. 

22 (2) MONEY PENALTIES IN CIVIL ACTIONS.— 

23 Section 209(e)(2) of the Investment Advisers Act of 

24 1940 (15 U.S.C. 80b–9(e)(2)) is amended— 

25 (A) in subparagraph (A)— 


pamtmann on DSKBFK8HB2PROD with BILLS
16 

•HR 3641 IH

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

2 ‘‘$10,000’’; and 

3 (ii) by striking ‘‘$50,000’’ and insert4 ing ‘‘$100,000’’; 

5 (B) in subparagraph (B)— 

6 (i) by striking ‘‘$50,000’’ and insert7 ing ‘‘$100,000’’; and 

8 (ii) by striking ‘‘$250,000’’ and in9 serting ‘‘$500,000’’; and 

10 (C) by striking subparagraph (C) and in11 serting the following: 

12 ‘‘(C) THIRD TIER.— 

13 ‘‘(i) IN GENERAL.—Notwithstanding 

14 subparagraphs (A) and (B), for a third 

15 tier violation, the amount of penalty for 

16 each such violation shall not exceed the 

17 greater of— 

18 ‘‘(I) $1,000,000 for a natural 

19 person or $10,000,000 for any other 

20 person; 

21 ‘‘(II) 3 times the gross amount of 

22 pecuniary gain to the person who 

23 committed the violation; or 


pamtmann on DSKBFK8HB2PROD with BILLS
17 

•HR 3641 IH

1 ‘‘(III) the amount of losses in2 curred by victims as a result of the 

3 violation. 

4 ‘‘(ii) THIRD TIER VIOLATION.—For 

5 the purposes of this subparagraph, the 

6 term ‘third tier violation’ means a violation 

7 described in paragraph (1) that— 

8 ‘‘(I) involved fraud, deceit, ma9 nipulation, or deliberate or reckless 

10 disregard of a regulatory requirement; 

11 and 

12 ‘‘(II) directly or indirectly— 

13 ‘‘(aa) resulted in substantial 

14 losses to other persons; 

15 ‘‘(bb) created a significant 

16 risk of substantial losses to other 

17 persons; or 

18 ‘‘(cc) resulted in substantial 

19 pecuniary gain to the person who 

20 committed the violation.’’. 

21 SEC. 3. PENALTIES FOR RECIDIVISTS. 

22 (a) SECURITIES ACT OF 1933.— 

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

24 8A(g)(2) of the Securities Act of 1933 (15 U.S.C. 


pamtmann on DSKBFK8HB2PROD with BILLS
18 

•HR 3641 IH

1 77h–1(g)(2)) is amended by adding at the end the 

2 following: 

3 ‘‘(D) FOURTH TIER.—Notwithstanding 

4 subparagraphs (A), (B), and (C), the maximum 

5 amount of penalty for each such act or omission 

6 shall be 3 times the otherwise applicable 

7 amount in such subparagraphs if, within the 5- 

8 year period preceding such act or omission, the 

9 person who committed the act or omission was 

10 criminally convicted for securities fraud or be11 came subject to a judgment or order imposing 

12 monetary, equitable, or administrative relief in 

13 any Commission action alleging fraud by that 

14 person.’’. 

15 (2) INJUNCTIONS AND PROSECUTION OF OF16 FENSES.—Section 20(d)(2) of the Securities Act of 

17 1933 (15 U.S.C. 77t(d)(2)) is amended by adding at 

18 the end the following: 

19 ‘‘(D) FOURTH TIER.—Notwithstanding 

20 subparagraphs (A), (B), and (C), the maximum 

21 amount of penalty for each such violation shall 

22 be 3 times the otherwise applicable amount in 

23 such subparagraphs if, within the 5-year period 

24 preceding such violation, the defendant was 

25 criminally convicted for securities fraud or beVerDate Sep 11 2014 02:59 Jul 10, 2019 Jkt 089200 PO 00000 Frm 00018 Fmt 6652 Sfmt 6201 E:\BILLS\H3641.IH H3641

pamtmann on DSKBFK8HB2PROD with BILLS
19 

•HR 3641 IH

1 came subject to a judgment or order imposing 

2 monetary, equitable, or administrative relief in 

3 any Commission action alleging fraud by that 

4 defendant.’’. 

5 (b) SECURITIES EXCHANGE ACT OF 1934.— 

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

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

8 78u(d)(3)(B)) is amended by adding at the end the 

9 following: 

10 ‘‘(iv) FOURTH TIER.—Notwithstanding 

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

12 of penalty for each such violation shall be 3 

13 times the otherwise applicable amount in such 

14 clauses if, within the 5-year period preceding 

15 such violation, the defendant was criminally 

16 convicted for securities fraud or became subject 

17 to a judgment or order imposing monetary, eq18 uitable, or administrative relief in any Commis19 sion action alleging fraud by that defendant.’’. 

20 (2) ADMINISTRATIVE PROCEEDINGS.—Section 

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

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

23 the following: 

24 ‘‘(4) FOURTH TIER.—Notwithstanding para25 graphs (1), (2), and (3), the maximum amount of 


pamtmann on DSKBFK8HB2PROD with BILLS
20 

•HR 3641 IH

1 penalty for each such act or omission shall be 3 

2 times the otherwise applicable amount in such para3 graphs if, within the 5-year period preceding such 

4 act or omission, the person who committed the act 

5 or omission was criminally convicted for securities 

6 fraud or became subject to a judgment or order im7 posing monetary, equitable, or administrative relief 

8 in any Commission action alleging fraud by that per9 son.’’. 

10 (c) INVESTMENT COMPANY ACT OF 1940.— 

11 (1) INELIGIBILITY OF CERTAIN UNDERWRITERS

12 AND AFFILIATES.—Section 9(d)(2) of the Invest13 ment Company Act of 1940 (15 U.S.C. 80a–9(d)(2)) 

14 is amended by adding at the end the following: 

15 ‘‘(D) FOURTH TIER.—Notwithstanding 

16 subparagraphs (A), (B), and (C), the maximum 

17 amount of penalty for each such act or omission 

18 shall be 3 times the otherwise applicable 

19 amount in such subparagraphs if, within the 5- 

20 year period preceding such act or omission, the 

21 person who committed the act or omission was 

22 criminally convicted for securities fraud or be23 came subject to a judgment or order imposing 

24 monetary, equitable, or administrative relief in 


pamtmann on DSKBFK8HB2PROD with BILLS
21 

•HR 3641 IH

1 any Commission action alleging fraud by that 

2 person.’’. 

3 (2) ENFORCEMENT.—Section 42(e)(2) of the 

4 Investment Company Act of 1940 (15 U.S.C. 80a– 

5 41(e)(2)) is amended by adding at the end the fol6 lowing: 

7 ‘‘(D) FOURTH TIER.—Notwithstanding 

8 subparagraphs (A), (B), and (C), the maximum 

9 amount of penalty for each such violation shall 

10 be 3 times the otherwise applicable amount in 

11 such subparagraphs if, within the 5-year period 

12 preceding such violation, the defendant was 

13 criminally convicted for securities fraud or be14 came subject to a judgment or order imposing 

15 monetary, equitable, or administrative relief in 

16 any Commission action alleging fraud by that 

17 defendant.’’. 

18 (d) INVESTMENT ADVISERS ACT OF 1940.—The In19 vestment Advisers Act of 1940 (15 U.S.C. 80b–1 et seq.) 

20 is amended— 

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

22 3(i)(2)), by adding at the end the following: 

23 ‘‘(D) FOURTH TIER.—Notwithstanding 

24 subparagraphs (A), (B), and (C), the maximum 

25 amount of penalty for each such act or omission 


pamtmann on DSKBFK8HB2PROD with BILLS
22 

•HR 3641 IH

1 shall be 3 times the otherwise applicable 

2 amount in such subparagraphs if, within the 5- 

3 year period preceding such act or omission, the 

4 person who committed the act or omission was 

5 criminally convicted for securities fraud or be6 came subject to a judgment or order imposing 

7 monetary, equitable, or administrative relief in 

8 any Commission action alleging fraud by that 

9 person.’’; and 

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

11 9(e)(2)) by adding at the end the following: 

12 ‘‘(D) FOURTH TIER.—Notwithstanding 

13 subparagraphs (A), (B), and (C), the maximum 

14 amount of penalty for each such violation shall 

15 be 3 times the otherwise applicable amount in 

16 such subparagraphs if, within the 5-year period 

17 preceding such violation, the defendant was 

18 criminally convicted for securities fraud or be19 came subject to a judgment or order imposing 

20 monetary, equitable, or administrative relief in 

21 any Commission action alleging fraud by that 

22 defendant.’’. 

23 SEC. 4. VIOLATIONS OF INJUNCTIONS AND BARS. 

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

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


pamtmann on DSKBFK8HB2PROD with BILLS
23 

•HR 3641 IH

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

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

3 Federal court injunction or a bar obtained or en4 tered by the Commission under this title,’’; and 

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

6 following: 

7 ‘‘(4) SPECIAL PROVISIONS RELATING TO A VIO8 LATION OF AN INJUNCTION OR CERTAIN ORDERS.— 

9 ‘‘(A) IN GENERAL.—Each separate viola10 tion of an injunction or order described in sub11 paragraph (B) shall be a separate offense, ex12 cept that in the case of a violation through a 

13 continuing failure to comply with such injunc14 tion or order, each day of the failure to comply 

15 with the injunction or order shall be deemed a 

16 separate offense. 

17 ‘‘(B) INJUNCTIONS AND ORDERS.—Sub18 paragraph (A) shall apply with respect to any 

19 action to enforce— 

20 ‘‘(i) a Federal court injunction ob21 tained pursuant to this title; 

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

23 the Commission pursuant to this title that 

24 bars, suspends, places limitations on the 


pamtmann on DSKBFK8HB2PROD with BILLS
24 

•HR 3641 IH

1 activities or functions of, or prohibits the 

2 activities of a person; or 

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

4 by the Commission pursuant to section 

5 8A.’’. 

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

7 21(d)(3) of the Securities Exchange Act of 1934 (15 

8 U.S.C. 78u(d)(3)) is amended— 

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

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

11 Federal court injunction or a bar obtained or en12 tered by the Commission under this title,’’; and 

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

14 the following: 

15 ‘‘(D) SPECIAL PROVISIONS RELATING TO A VIO16 LATION OF AN INJUNCTION OR CERTAIN ORDERS.— 

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

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

19 shall be a separate offense, except that in the 

20 case of a violation through a continuing failure 

21 to comply with such injunction or order, each 

22 day of the failure to comply with the injunction 

23 or order shall be deemed a separate offense. 


pamtmann on DSKBFK8HB2PROD with BILLS
25 

•HR 3641 IH

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

2 (i) shall apply with respect to an action to en3 force— 

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 

9 activities or functions of, or prohibits the 

10 activities of a person; or 

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

12 by the Commission pursuant to section 

13 21C.’’. 

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

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

16 80a–41(e)) is amended— 

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

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

19 Federal court injunction or a bar obtained or en20 tered by the Commission under this title,’’; and 

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

22 following: 

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


pamtmann on DSKBFK8HB2PROD with BILLS
26 

•HR 3641 IH

1 ‘‘(A) IN GENERAL.—Each separate viola2 tion of an injunction or order described in sub3 paragraph (B) shall be a separate offense, ex4 cept that in the case of a violation through a 

5 continuing failure to comply with such injunc6 tion or order, each day of the failure to comply 

7 with the injunction or order shall be deemed a 

8 separate offense. 

9 ‘‘(B) INJUNCTIONS AND ORDERS.—Sub10 paragraph (A) shall apply with respect to any 

11 action to enforce— 

12 ‘‘(i) a Federal court injunction ob13 tained pursuant to this title; 

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

15 the Commission pursuant to this title that 

16 bars, suspends, places limitations on the 

17 activities or functions of, or prohibits the 

18 activities of a person; or 

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

20 by the Commission pursuant to section 

21 9(f).’’. 

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

23 209(e) of the Investment Advisers Act of 1940 (15 U.S.C. 

24 80b–9(e)) is amended— 


pamtmann on DSKBFK8HB2PROD with BILLS
27 

•HR 3641 IH

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

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

3 Federal court injunction or a bar obtained or en4 tered by the Commission under this title,’’; and 

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

6 following: 

7 ‘‘(4) SPECIAL PROVISIONS RELATING TO A VIO8 LATION OF AN INJUNCTION OR CERTAIN ORDERS.— 

9 ‘‘(A) IN GENERAL.—Each separate viola10 tion of an injunction or order described in sub11 paragraph (B) shall be a separate offense, ex12 cept that in the case of a violation through a 

13 continuing failure to comply with such injunc14 tion or order, each day of the failure to comply 

15 with the injunction or order shall be deemed a 

16 separate offense. 

17 ‘‘(B) INJUNCTIONS AND ORDERS.—Sub18 paragraph (A) shall apply with respect to any 

19 action to enforce— 

20 ‘‘(i) a Federal court injunction ob21 tained pursuant to this title; 

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

23 the Commission pursuant to this title that 

24 bars, suspends, places limitations on the 


pamtmann on DSKBFK8HB2PROD with BILLS
28 

•HR 3641 IH

1 activities or functions of, or prohibits the 

2 activities of a person; or 

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

4 by the Commission pursuant to section 

5 203(k).’’. 

Æ 


pamtmann on DSKBFK8HB2PROD with BILLS