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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Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Stronger Enforcement 
of Civil Penalties Act of 2019’’. 
SEC. 2. UPDATED CIVIL MONEY PENALTIES FOR SECURI-
TIES LAWS VIOLATIONS. 
(a) SECURITIES ACT OF 1933.— 
(1) MONEY PENALTIES IN ADMINISTRATIVE AC-
TIONS.—Section 8A(g)(2) of the Securities Act of 
1933 (15 U.S.C. 77h–1(g)(2)) is amended— 
(A) in subparagraph (A)— 
(i) by striking ‘‘$7,500’’ and inserting 
‘‘$10,000’’; and 
(ii) by striking ‘‘$75,000’’ and insert-
ing ‘‘$100,000’’; 
(B) in subparagraph (B)— 
(i) by striking ‘‘$75,000’’ and inserting 
‘‘$100,000’’; and 
(ii) by striking ‘‘$375,000’’ and insert-
ing ‘‘$500,000’’; and 
(C) by striking subparagraph (C) and in-
serting the following: 
‘‘(C) THIRD TIER.— 
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‘‘(i) IN
GENERAL.—Notwithstanding 
subparagraphs (A) and (B), for a third tier 
act or omission, the amount of penalty for 
each such act or omission shall not exceed 
the greater of— 
‘‘(I) $1,000,000 for a natural per-
son or $10,000,000 for any other per-
son; 
‘‘(II) 3 times the gross amount of 
pecuniary gain to the person who com-
mitted the act or omission; or 
‘‘(III) the amount of losses in-
curred by victims as a result of the act 
or omission. 
‘‘(ii) THIRD TIER ACT OR OMISSION.— 
For the purposes of this subparagraph, the 
term ‘third tier act or omission’ means an 
act or omission described in paragraph (1) 
that— 
‘‘(I) involved fraud, deceit, ma-
nipulation, or deliberate or reckless 
disregard of a regulatory requirement; 
and 
‘‘(II) directly or indirectly— 
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‘‘(aa) resulted in substantial 
losses to other persons; 
‘‘(bb) created a significant 
risk of substantial losses to other 
persons; or 
‘‘(cc) resulted in substantial 
pecuniary gain to the person who 
committed the act or omission.’’. 
(2) MONEY PENALTIES IN CIVIL ACTIONS.—Sec-
tion 20(d)(2) of the Securities Act of 1933 (15 U.S.C. 
77t(d)(2)) is amended— 
(A) in subparagraph (A)— 
(i) by striking ‘‘$5,000’’ and inserting 
‘‘$10,000’’; and 
(ii) by striking ‘‘$50,000’’ and insert-
ing ‘‘$100,000’’; 
(B) in subparagraph (B)— 
(i) by striking ‘‘$50,000’’ and inserting 
‘‘$100,000’’; and 
(ii) by striking ‘‘$250,000’’ and insert-
ing ‘‘$500,000’’; and 
(C) by striking subparagraph (C) and in-
serting the following: 
‘‘(C) THIRD TIER.— 
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‘‘(i) IN
GENERAL.—Notwithstanding 
subparagraphs (A) and (B), for a third tier 
violation, the amount of penalty for each 
violation shall not exceed the greater of— 
‘‘(I) $1,000,000 for a natural per-
son or $10,000,000 for any other per-
son; 
‘‘(II) 3 times the gross amount of 
pecuniary gain to the person who com-
mitted the violation; or 
‘‘(III) the amount of losses in-
curred by victims as a result of the vio-
lation. 
‘‘(ii) THIRD TIER VIOLATION.—For the 
purposes of this subparagraph, the term 
‘third tier violation’ means a violation de-
scribed in paragraph (1) that— 
‘‘(I) involved fraud, deceit, ma-
nipulation, or deliberate or reckless 
disregard of a regulatory requirement; 
and 
‘‘(II) directly or indirectly— 
‘‘(aa) resulted in substantial 
losses to other persons; 
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‘‘(bb) created a significant 
risk of substantial losses to other 
persons; or 
‘‘(cc) resulted in substantial 
pecuniary gain to the person who 
committed the violation.’’. 
(b) SECURITIES EXCHANGE ACT OF 1934.— 
(1) MONEY PENALTIES IN CIVIL ACTIONS.—Sec-
tion 21(d)(3)(B) of the Securities Exchange Act of 
1934 (15 U.S.C. 78u(d)(3)(B)) is amended— 
(A) in clause (i)— 
(i) by striking ‘‘$5,000’’ and inserting 
‘‘$10,000’’; and 
(ii) by striking ‘‘$50,000’’ and insert-
ing ‘‘$100,000’’; 
(B) in clause (ii)— 
(i) by striking ‘‘$50,000’’ and inserting 
‘‘$100,000’’; and 
(ii) by striking ‘‘$250,000’’ and insert-
ing ‘‘$500,000’’; and 
(C) by striking clause (iii) and inserting 
the following: 
‘‘(iii) THIRD TIER.— 
‘‘(I) 
IN
GENERAL.—Notwith-
standing clauses (i) and (ii), for a 
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third tier violation, the amount of pen-
alty for each such violation shall not 
exceed the greater of— 
‘‘(aa) $1,000,000 for a nat-
ural person or $10,000,000 for 
any other person; 
‘‘(bb) 
times 
the 
gross 
amount of pecuniary gain to the 
person who committed the viola-
tion; or 
‘‘(cc) the amount of losses in-
curred by victims as a result of 
the violation. 
‘‘(II) THIRD
TIER
VIOLATION.— 
For the purposes of this clause, the 
term ‘third tier violation’ means a vio-
lation described in subparagraph (A) 
that— 
‘‘(aa) involved fraud, deceit, 
manipulation, or deliberate or 
reckless disregard of a regulatory 
requirement; and 
‘‘(bb) directly or indirectly— 
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‘‘(AA) resulted in sub-
stantial losses to other per-
sons; 
‘‘(BB) created a signifi-
cant risk of substantial losses 
to other persons; or 
‘‘(CC) resulted in sub-
stantial pecuniary gain to 
the person who committed the 
violation.’’. 
(2) MONEY PENALTIES IN ADMINISTRATIVE AC-
TIONS.—Section 21B(b) of the Securities Exchange 
Act of 1934 (15 U.S.C. 78u–2(b)) is amended— 
(A) in paragraph (1)— 
(i) by striking ‘‘$5,000’’ and inserting 
‘‘$10,000’’; and 
(ii) by striking ‘‘$50,000’’ and insert-
ing ‘‘$100,000’’; 
(B) in paragraph (2)— 
(i) by striking ‘‘$50,000’’ and inserting 
‘‘$100,000’’; and 
(ii) by striking ‘‘$250,000’’ and insert-
ing ‘‘$500,000’’; and 
(C) by striking paragraph (3) and inserting 
the following: 
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‘‘(3) THIRD TIER.— 
‘‘(A) IN GENERAL.—Notwithstanding para-
graphs (1) and (2), for a third tier act or omis-
sion, the amount of penalty for each such act or 
omission shall not exceed the greater of— 
‘‘(i) $1,000,000 for a natural person or 
$10,000,000 for any other person; 
‘‘(ii) 3 times the gross amount of pecu-
niary gain to the person who committed the 
act or omission; or 
‘‘(iii) the amount of losses incurred by 
victims as a result of the act or omission. 
‘‘(B) THIRD TIER ACT OR OMISSION.—For 
the purposes of this paragraph, the term ‘third 
tier act or omission’ means an act or omission 
described in paragraph (1) that— 
‘‘(i) involved fraud, deceit, manipula-
tion, or deliberate or reckless disregard of a 
regulatory requirement; and 
‘‘(ii) directly or indirectly— 
‘‘(I) resulted in substantial losses 
to other persons; 
‘‘(II) created a significant risk of 
substantial losses to other persons; or 
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‘‘(III) resulted in substantial pe-
cuniary gain to the person who com-
mitted the act or omission.’’. 
(c) INVESTMENT COMPANY ACT OF 1940.— 
(1) MONEY PENALTIES IN ADMINISTRATIVE AC-
TIONS.—Section 9(d)(2) of the Investment Company 
Act of 1940 (15 U.S.C. 80a–9(d)(2)) is amended— 
(A) in subparagraph (A)— 
(i) by striking ‘‘$5,000’’ and inserting 
‘‘$10,000’’; and 
(ii) by striking ‘‘$50,000’’ and insert-
ing ‘‘$100,000’’; 
(B) in subparagraph (B)— 
(i) by striking ‘‘$50,000’’ and inserting 
‘‘$100,000’’; and 
(ii) by striking ‘‘$250,000’’ and insert-
ing ‘‘$500,000’’; and 
(C) by striking subparagraph (C) and in-
serting the following: 
‘‘(C) THIRD TIER.— 
‘‘(i) IN
GENERAL.—Notwithstanding 
subparagraphs (A) and (B), for a third tier 
act or omission, the amount of penalty for 
each such act or omission shall not exceed 
the greater of— 
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‘‘(I) $1,000,000 for a natural per-
son or $10,000,000 for any other per-
son; 
‘‘(II) 3 times the gross amount of 
pecuniary gain to the person who com-
mitted the act or omission; or 
‘‘(III) the amount of losses in-
curred by victims as a result of the act 
or omission. 
‘‘(ii) THIRD TIER ACT OR OMISSION.— 
For the purposes of this subparagraph, the 
term ‘third tier act or omission’ means an 
act or omission described in paragraph (1) 
that— 
‘‘(I) involved fraud, deceit, ma-
nipulation, or deliberate or reckless 
disregard of a regulatory requirement; 
and 
‘‘(II) directly or indirectly— 
‘‘(aa) resulted in substantial 
losses to other persons; 
‘‘(bb) created a significant 
risk of substantial losses to other 
persons; or 
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‘‘(cc) resulted in substantial 
pecuniary gain to the person who 
committed the act or omission.’’. 
(2) MONEY PENALTIES IN CIVIL ACTIONS.—Sec-
tion 42(e)(2) of the Investment Company Act of 1940 
(15 U.S.C. 80a–41(e)(2)) is amended— 
(A) in subparagraph (A)— 
(i) by striking ‘‘$5,000’’ and inserting 
‘‘$10,000’’; and 
(ii) by striking ‘‘$50,000’’ and insert-
ing ‘‘$100,000’’; 
(B) in subparagraph (B)— 
(i) by striking ‘‘$50,000’’ and inserting 
‘‘$100,000’’; and 
(ii) by striking ‘‘$250,000’’ and insert-
ing ‘‘$500,000’’; and 
(C) by striking subparagraph (C) and in-
serting the following: 
‘‘(C) THIRD TIER.— 
‘‘(i) IN
GENERAL.—Notwithstanding 
subparagraphs (A) and (B), for a third tier 
violation, the amount of penalty for each 
such violation shall not exceed the greater 
of— 
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‘‘(I) $1,000,000 for a natural per-
son or $10,000,000 for any other per-
son; 
‘‘(II) 3 times the gross amount of 
pecuniary gain to the person who com-
mitted the violation; or 
‘‘(III) the amount of losses in-
curred by victims as a result of the vio-
lation. 
‘‘(ii) THIRD TIER VIOLATION.—For the 
purposes of this subparagraph, the term 
‘third tier violation’ means a violation de-
scribed in paragraph (1) that— 
‘‘(I) involved fraud, deceit, ma-
nipulation, or deliberate or reckless 
disregard of a regulatory requirement; 
and 
‘‘(II) directly or indirectly— 
‘‘(aa) resulted in substantial 
losses to other persons; 
‘‘(bb) created a significant 
risk of substantial losses to other 
persons; or 
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‘‘(cc) resulted in substantial 
pecuniary gain to the person who 
committed the violation.’’. 
(d) INVESTMENT ADVISERS ACT OF 1940.— 
(1) MONEY PENALTIES IN ADMINISTRATIVE AC-
TIONS.—Section 203(i)(2) of the Investment Advisers 
Act of 1940 (15 U.S.C. 80b–3(i)(2)) is amended— 
(A) in subparagraph (A)— 
(i) by striking ‘‘$5,000’’ and inserting 
‘‘$10,000’’; and 
(ii) by striking ‘‘$50,000’’ and insert-
ing ‘‘$100,000’’; 
(B) in subparagraph (B)— 
(i) by striking ‘‘$50,000’’ and inserting 
‘‘$100,000’’; and 
(ii) by striking ‘‘$250,000’’ and insert-
ing ‘‘$500,000’’; and 
(C) by striking subparagraph (C) and in-
serting the following: 
‘‘(C) THIRD TIER.— 
‘‘(i) IN
GENERAL.—Notwithstanding 
subparagraphs (A) and (B), for a third tier 
act or omission, the amount of penalty for 
each such act or omission shall not exceed 
the greater of— 
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‘‘(I) $1,000,000 for a natural per-
son or $10,000,000 for any other per-
son; 
‘‘(II) 3 times the gross amount of 
pecuniary gain to the person who com-
mitted the act or omission; or 
‘‘(III) the amount of losses in-
curred by victims as a result of the act 
or omission. 
‘‘(ii) THIRD TIER ACT OR OMISSION.— 
For the purposes of this subparagraph, the 
term ‘third tier act or omission’ means an 
act or omission described in paragraph (1) 
that— 
‘‘(I) involved fraud, deceit, ma-
nipulation, or deliberate or reckless 
disregard of a regulatory requirement; 
and 
‘‘(II) directly or indirectly— 
‘‘(aa) resulted in substantial 
losses to other persons; 
‘‘(bb) created a significant 
risk of substantial losses to other 
persons; or 
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‘‘(cc) resulted in substantial 
pecuniary gain to the person who 
committed the act or omission.’’. 
(2) MONEY PENALTIES IN CIVIL ACTIONS.—Sec-
tion 209(e)(2) of the Investment Advisers Act of 1940 
(15 U.S.C. 80b–9(e)(2)) is amended— 
(A) in subparagraph (A)— 
(i) by striking ‘‘$5,000’’ and inserting 
‘‘$10,000’’; and 
(ii) by striking ‘‘$50,000’’ and insert-
ing ‘‘$100,000’’; 
(B) in subparagraph (B)— 
(i) by striking ‘‘$50,000’’ and inserting 
‘‘$100,000’’; and 
(ii) by striking ‘‘$250,000’’ and insert-
ing ‘‘$500,000’’; and 
(C) by striking subparagraph (C) and in-
serting the following: 
‘‘(C) THIRD TIER.— 
‘‘(i) IN
GENERAL.—Notwithstanding 
subparagraphs (A) and (B), for a third tier 
violation, the amount of penalty for each 
such violation shall not exceed the greater 
of— 
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‘‘(I) $1,000,000 for a natural per-
son or $10,000,000 for any other per-
son; 
‘‘(II) 3 times the gross amount of 
pecuniary gain to the person who com-
mitted the violation; or 
‘‘(III) the amount of losses in-
curred by victims as a result of the vio-
lation. 
‘‘(ii) THIRD TIER VIOLATION.—For the 
purposes of this subparagraph, the term 
‘third tier violation’ means a violation de-
scribed in paragraph (1) that— 
‘‘(I) involved fraud, deceit, ma-
nipulation, or deliberate or reckless 
disregard of a regulatory requirement; 
and 
‘‘(II) directly or indirectly— 
‘‘(aa) resulted in substantial 
losses to other persons; 
‘‘(bb) created a significant 
risk of substantial losses to other 
persons; or 
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‘‘(cc) resulted in substantial 
pecuniary gain to the person who 
committed the violation.’’. 
SEC. 3. PENALTIES FOR RECIDIVISTS. 
(a) SECURITIES ACT OF 1933.— 
(1) CEASE-AND-DESIST
PROCEEDINGS.—Section 
8A(g)(2) of the Securities Act of 1933 (15 U.S.C. 
77h–1(g)(2)) is amended by adding at the end the fol-
lowing: 
‘‘(D) FOURTH TIER.—Notwithstanding sub-
paragraphs (A), (B), and (C), the maximum 
amount of penalty for each such act or omission 
shall be 3 times the otherwise applicable amount 
in such subparagraphs if, within the 5-year pe-
riod preceding such act or omission, the person 
who committed the act or omission was crimi-
nally convicted for securities fraud or became 
subject to a judgment or order imposing mone-
tary, equitable, or administrative relief in any 
Commission action alleging fraud by that per-
son.’’. 
(2) INJUNCTIONS
AND
PROSECUTION
OF
OF-
FENSES.—Section 20(d)(2) of the Securities Act of 
1933 (15 U.S.C. 77t(d)(2)) is amended by adding at 
the end the following: 
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‘‘(D) FOURTH TIER.—Notwithstanding sub-
paragraphs (A), (B), and (C), the maximum 
amount of penalty for each such violation shall 
be 3 times the otherwise applicable amount in 
such subparagraphs if, within the 5-year period 
preceding such violation, the defendant was 
criminally convicted for securities fraud or be-
came subject to a judgment or order imposing 
monetary, equitable, or administrative relief in 
any Commission action alleging fraud by that 
defendant.’’. 
(b) SECURITIES EXCHANGE ACT OF 1934.— 
(1) CIVIL ACTIONS.—Section 21(d)(3)(B) of the 
Securities 
Exchange 
Act 
of 
1934 
(15 
U.S.C. 
78u(d)(3)(B)) is amended by adding at the end the 
following: 
‘‘(iv) 
FOURTH
TIER.—Notwithstanding 
clauses (i), (ii), and (iii), the maximum amount 
of penalty for each such violation shall be 3 
times the otherwise applicable amount in such 
clauses if, within the 5-year period preceding 
such violation, the defendant was criminally 
convicted for securities fraud or became subject 
to a judgment or order imposing monetary, equi-
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table, or administrative relief in any Commis-
sion action alleging fraud by that defendant.’’. 
(2) 
ADMINISTRATIVE
PROCEEDINGS.—Section 
21B(b) of the Securities Exchange Act of 1934 (15 
U.S.C. 78u–2(b)) is amended by adding at the end 
the following: 
‘‘(4) FOURTH
TIER.—Notwithstanding para-
graphs (1), (2), and (3), the maximum amount of 
penalty for each such act or omission shall be 3 times 
the otherwise applicable amount in such paragraphs 
if, within the 5-year period preceding such act or 
omission, the person who committed the act or omis-
sion was criminally convicted for securities fraud or 
became subject to a judgment or order imposing mon-
etary, equitable, or administrative relief in any Com-
mission action alleging fraud by that person.’’. 
(c) INVESTMENT COMPANY ACT OF 1940.— 
(1) INELIGIBILITY OF CERTAIN UNDERWRITERS 
AND AFFILIATES.—Section 9(d)(2) of the Investment 
Company Act of 1940 (15 U.S.C. 80a–9(d)(2)) is 
amended by adding at the end the following: 
‘‘(D) FOURTH TIER.—Notwithstanding sub-
paragraphs (A), (B), and (C), the maximum 
amount of penalty for each such act or omission 
shall be 3 times the otherwise applicable amount 
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in such subparagraphs if, within the 5-year pe-
riod preceding such act or omission, the person 
who committed the act or omission was crimi-
nally convicted for securities fraud or became 
subject to a judgment or order imposing mone-
tary, equitable, or administrative relief in any 
Commission action alleging fraud by that per-
son.’’. 
(2) ENFORCEMENT OF CERTAIN ACTIONS.—Sec-
tion 42(e)(2) of the Investment Company Act of 1940 
(15 U.S.C. 80a–41(e)(2)) is amended by adding at the 
end the following: 
‘‘(D) FOURTH TIER.—Notwithstanding sub-
paragraphs (A), (B), and (C), the maximum 
amount of penalty for each such violation shall 
be 3 times the otherwise applicable amount in 
such subparagraphs if, within the 5-year period 
preceding such violation, the defendant was 
criminally convicted for securities fraud or be-
came subject to a judgment or order imposing 
monetary, equitable, or administrative relief in 
any Commission action alleging fraud by that 
defendant.’’. 
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(d) INVESTMENT ADVISERS ACT OF 1940.—The Invest-
ment Advisers Act of 1940 (15 U.S.C. 80b–1 et seq.) is 
amended— 
(1) in section 203(i)(2) (15 U.S.C. 80b–3(i)(2)), 
by adding at the end the following: 
‘‘(D) FOURTH TIER.—Notwithstanding sub-
paragraphs (A), (B), and (C), the maximum 
amount of penalty for each such act or omission 
shall be 3 times the otherwise applicable amount 
in such subparagraphs if, within the 5-year pe-
riod preceding such act or omission, the person 
who committed the act or omission was crimi-
nally convicted for securities fraud or became 
subject to a judgment or order imposing mone-
tary, equitable, or administrative relief in any 
Commission action alleging fraud by that per-
son.’’; and 
(2) in section 209(e)(2) (15 U.S.C. 80b–9(e)(2)) 
by adding at the end the following: 
‘‘(D) FOURTH TIER.—Notwithstanding sub-
paragraphs (A), (B), and (C), the maximum 
amount of penalty for each such violation shall 
be 3 times the otherwise applicable amount in 
such subparagraphs if, within the 5-year period 
preceding such violation, the defendant was 
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criminally convicted for securities fraud or be-
came subject to a judgment or order imposing 
monetary, equitable, or administrative relief in 
any Commission action alleging fraud by that 
defendant.’’. 
SEC. 4. VIOLATIONS OF INJUNCTIONS AND BARS. 
(a) SECURITIES ACT OF 1933.—Section 20(d) of the 
Securities Act of 1933 (15 U.S.C. 77t(d)) is amended— 
(1) in paragraph (1), by inserting after ‘‘the 
rules or regulations thereunder,’’ the following: ‘‘a 
Federal court injunction or a bar obtained or entered 
by the Commission under this title,’’; and 
(2) by striking paragraph (4) and inserting the 
following: 
‘‘(4) SPECIAL PROVISIONS RELATING TO A VIOLA-
TION OF AN INJUNCTION OR CERTAIN ORDERS.— 
‘‘(A) IN GENERAL.—Each separate violation 
of an injunction or order described in subpara-
graph (B) shall be a separate offense, except that 
in the case of a violation through a continuing 
failure to comply with such injunction or order, 
each day of the failure to comply with the in-
junction or order shall be deemed a separate of-
fense. 
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‘‘(B) INJUNCTIONS AND ORDERS.—Subpara-
graph (A) shall apply with respect to any action 
to enforce— 
‘‘(i) a Federal court injunction ob-
tained pursuant to this title; 
‘‘(ii) an order entered or obtained by 
the Commission pursuant to this title that 
bars, suspends, places limitations on the ac-
tivities or functions of, or prohibits the ac-
tivities of a person; or 
‘‘(iii) a cease-and-desist order entered 
by the Commission pursuant to section 
8A.’’. 
(b) SECURITIES EXCHANGE ACT OF 1934.—Section 
21(d)(3) of the Securities Exchange Act of 1934 (15 U.S.C. 
78u(d)(3)) is amended— 
(1) in subparagraph (A), by inserting after ‘‘the 
rules or regulations thereunder,’’ the following: ‘‘a 
Federal court injunction or a bar obtained or entered 
by the Commission under this title,’’; and 
(2) by striking subparagraph (D) and inserting 
the following: 
‘‘(D) SPECIAL PROVISIONS RELATING TO A VIO-
LATION OF AN INJUNCTION OR CERTAIN ORDERS.— 
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‘‘(i) IN GENERAL.—Each separate violation 
of an injunction or order described in clause (ii) 
shall be a separate offense, except that in the case 
of a violation through a continuing failure to 
comply with such injunction or order, each day 
of the failure to comply with the injunction or 
order shall be deemed a separate offense. 
‘‘(ii) INJUNCTIONS
AND
ORDERS.—Clause 
(i) shall apply with respect to an action to en-
force— 
‘‘(I) a Federal court injunction ob-
tained pursuant to this title; 
‘‘(II) an order entered or obtained by 
the Commission pursuant to this title that 
bars, suspends, places limitations on the ac-
tivities or functions of, or prohibits the ac-
tivities of a person; or 
‘‘(III) a cease-and-desist order entered 
by the Commission pursuant to section 
21C.’’. 
(c) INVESTMENT COMPANY ACT
OF 1940.—Section 
42(e) of the Investment Company Act of 1940 (15 U.S.C. 
80a–41(e)) is amended— 
(1) in paragraph (1), by inserting after ‘‘the 
rules or regulations thereunder,’’ the following: ‘‘a 
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Federal court injunction or a bar obtained or entered 
by the Commission under this title,’’; and 
(2) by striking paragraph (4) and inserting the 
following: 
‘‘(4) SPECIAL PROVISIONS RELATING TO A VIOLA-
TION OF AN INJUNCTION OR CERTAIN ORDERS.— 
‘‘(A) IN GENERAL.—Each separate violation 
of an injunction or order described in subpara-
graph (B) shall be a separate offense, except that 
in the case of a violation through a continuing 
failure to comply with such injunction or order, 
each day of the failure to comply with the in-
junction or order shall be deemed a separate of-
fense. 
‘‘(B) INJUNCTIONS AND ORDERS.—Subpara-
graph (A) shall apply with respect to any action 
to enforce— 
‘‘(i) a Federal court injunction ob-
tained pursuant to this title; 
‘‘(ii) an order entered or obtained by 
the Commission pursuant to this title that 
bars, suspends, places limitations on the ac-
tivities or functions of, or prohibits the ac-
tivities of a person; or 
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‘‘(iii) a cease-and-desist order entered 
by the Commission pursuant to section 
9(f).’’. 
(d) INVESTMENT ADVISERS ACT OF 1940.—Section 
209(e) of the Investment Advisers Act of 1940 (15 U.S.C. 
80b–9(e)) is amended— 
(1) in paragraph (1), by inserting after ‘‘the 
rules or regulations thereunder,’’ the following: ‘‘a 
Federal court injunction or a bar obtained or entered 
by the Commission under this title,’’; and 
(2) by striking paragraph (4) and inserting the 
following: 
‘‘(4) SPECIAL PROVISIONS RELATING TO A VIOLA-
TION OF AN INJUNCTION OR CERTAIN ORDERS.— 
‘‘(A) IN GENERAL.—Each separate violation 
of an injunction or order described in subpara-
graph (B) shall be a separate offense, except that 
in the case of a violation through a continuing 
failure to comply with such injunction or order, 
each day of the failure to comply with the in-
junction or order shall be deemed a separate of-
fense. 
‘‘(B) INJUNCTIONS AND ORDERS.—Subpara-
graph (A) shall apply with respect to any action 
to enforce— 
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‘‘(i) a Federal court injunction ob-
tained pursuant to this title; 
‘‘(ii) an order entered or obtained by 
the Commission pursuant to this title that 
bars, suspends, places limitations on the ac-
tivities or functions of, or prohibits the ac-
tivities of a person; or 
‘‘(iii) a cease-and-desist order entered 
by the Commission pursuant to section 
203(k).’’. 
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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 Com-
mittee of the Whole House on the State of the Union 
and ordered to be printed 
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