II 119th CONGRESS 1st Session S. 2920 IN THE SENATE OF THE UNITED STATES September 19 (legislative day, September 16), 2025 Mr. Reed (for himself and Mr. Grassley ) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs A BILL To enhance civil penalties under the Federal securities laws, and for other purposes.

1. Short title This Act may be cited as the Stronger Enforcement of Civil Penalties Act of 2025 . 2. Updated civil money penalties for securities laws violations (a) Securities Act of 1933 (1) Money penalties in administrative actions 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 inserting $100,000 ; (B) in subparagraph (B)— (i) by striking $75,000 and inserting $100,000 ; and (ii) by striking $375,000 and inserting $500,000 ; and (C) by striking subparagraph (C) and inserting 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— (I) $1,000,000 for a natural person or $10,000,000 for any other person; (II) 3 times the gross amount of pecuniary 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. (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, manipulation, 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 (cc) resulted in substantial pecuniary gain to the person who committed the act or omission. . (2) Money penalties in civil actions Section 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 inserting $100,000 ; (B) in subparagraph (B)— (i) by striking $50,000 and inserting $100,000 ; and (ii) by striking $250,000 and inserting $500,000 ; and (C) by striking subparagraph (C) and inserting 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— (I) $1,000,000 for a natural person or $10,000,000 for any other person; (II) 3 times the gross amount of pecuniary gain to the person who committed the violation; or (III) the amount of losses incurred by victims as a result of the violation. (ii) Third tier violation For the purposes of this subparagraph, the term third tier violation means a violation described in paragraph (1) that— (I) involved fraud, deceit, manipulation, 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 (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 Section 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 inserting $100,000 ; (B) in clause (ii)— (i) by striking $50,000 and inserting $100,000 ; and (ii) by striking $250,000 and inserting $500,000 ; and (C) by striking clause (iii) and inserting the following: (iii) Third tier (I) In general Notwithstanding clauses (i) and (ii), for a third tier violation, the amount of penalty for each such violation shall not exceed the greater of— (aa) $1,000,000 for a natural person or $10,000,000 for any other person; (bb) 3 times the gross amount of pecuniary gain to the person who committed the violation; or (cc) the amount of losses incurred 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 violation described in subparagraph (A) that— (aa) involved fraud, deceit, manipulation, or deliberate or reckless disregard of a regulatory requirement; and (bb) directly or indirectly— (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 violation. . (2) Money penalties in administrative actions 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 inserting $100,000 ; (B) in paragraph (2)— (i) by striking $50,000 and inserting $100,000 ; and (ii) by striking $250,000 and inserting $500,000 ; and (C) by striking paragraph (3) and inserting the following: (3) Third tier (A) In general Notwithstanding paragraphs (1) and (2), 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 person or $10,000,000 for any other person; (ii) 3 times the gross amount of pecuniary 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, manipulation, 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 (III) resulted in substantial pecuniary gain to the person who committed the act or omission. . (c) Investment Company Act of 1940 (1) Money penalties in administrative actions 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 inserting $100,000 ; (B) in subparagraph (B)— (i) by striking $50,000 and inserting $100,000 ; and (ii) by striking $250,000 and inserting $500,000 ; and (C) by striking subparagraph (C) and inserting 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— (I) $1,000,000 for a natural person or $10,000,000 for any other person; (II) 3 times the gross amount of pecuniary 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. (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, manipulation, 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 (cc) resulted in substantial pecuniary gain to the person who committed the act or omission. . (2) Money penalties in civil actions Section 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 inserting $100,000 ; (B) in subparagraph (B)— (i) by striking $50,000 and inserting $100,000 ; and (ii) by striking $250,000 and inserting $500,000 ; and (C) by striking subparagraph (C) and inserting 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— (I) $1,000,000 for a natural person or $10,000,000 for any other person; (II) 3 times the gross amount of pecuniary gain to the person who committed the violation; or (III) the amount of losses incurred by victims as a result of the violation. (ii) Third tier violation For the purposes of this subparagraph, the term third tier violation means a violation described in paragraph (1) that— (I) involved fraud, deceit, manipulation, 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 (cc) resulted in substantial pecuniary gain to the person who committed the violation. . (d) Investment Advisers Act of 1940 (1) Money penalties in administrative actions 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 inserting $100,000 ; (B) in subparagraph (B)— (i) by striking $50,000 and inserting $100,000 ; and (ii) by striking $250,000 and inserting $500,000 ; and (C) by striking subparagraph (C) and inserting 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— (I) $1,000,000 for a natural person or $10,000,000 for any other person; (II) 3 times the gross amount of pecuniary 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. (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, manipulation, 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 (cc) resulted in substantial pecuniary gain to the person who committed the act or omission. . (2) Money penalties in civil actions Section 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 inserting $100,000 ; (B) in subparagraph (B)— (i) by striking $50,000 and inserting $100,000 ; and (ii) by striking $250,000 and inserting $500,000 ; and (C) by striking subparagraph (C) and inserting 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— (I) $1,000,000 for a natural person or $10,000,000 for any other person; (II) 3 times the gross amount of pecuniary gain to the person who committed the violation; or (III) the amount of losses incurred by victims as a result of the violation. (ii) Third tier violation For the purposes of this subparagraph, the term third tier violation means a violation described in paragraph (1) that— (I) involved fraud, deceit, manipulation, 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 (cc) resulted in substantial pecuniary gain to the person who committed the violation. . 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 following: (D) Fourth tier Notwithstanding subparagraphs (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 period preceding such act or omission, the person who committed the act or omission was criminally convicted for securities fraud or became subject to a judgment or order imposing monetary, equitable, or administrative relief in any Commission action alleging fraud by that person. . (2) Injunctions and prosecution of offenses 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: (D) Fourth tier Notwithstanding subparagraphs (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 became 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, equitable, or administrative relief in any Commission 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 paragraphs (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 omission was criminally convicted for securities fraud or became subject to a judgment or order imposing monetary, equitable, or administrative relief in any Commission 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 subparagraphs (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 period preceding such act or omission, the person who committed the act or omission was criminally convicted for securities fraud or became subject to a judgment or order imposing monetary, equitable, or administrative relief in any Commission action alleging fraud by that person. . (2) Enforcement Section 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 subparagraphs (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 became subject to a judgment or order imposing monetary, equitable, or administrative relief in any Commission action alleging fraud by that defendant. . (d) Investment Advisers Act of 1940 The Investment 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 subparagraphs (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 period preceding such act or omission, the person who committed the act or omission was criminally convicted for securities fraud or became subject to a judgment or order imposing monetary, equitable, or administrative relief in any Commission action alleging fraud by that person. ; 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 subparagraphs (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 became subject to a judgment or order imposing monetary, equitable, or administrative relief in any Commission action alleging fraud by that defendant. . 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 violation of an injunction or certain orders (A) In general Each separate violation of an injunction or order described in subparagraph (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 injunction or order shall be deemed a separate offense. (B) Injunctions and orders Subparagraph (A) shall apply with respect to any action to enforce— (i) a Federal court injunction obtained pursuant to this title; (ii) an order entered or obtained by the Commission pursuant to this title that bars, suspends, places limitations on the activities or functions of, or prohibits the activities 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 violation of an injunction or certain orders (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 enforce— (I) a Federal court injunction obtained pursuant to this title; (II) an order entered or obtained by the Commission pursuant to this title that bars, suspends, places limitations on the activities or functions of, or prohibits the activities 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 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 violation of an injunction or certain orders (A) In general Each separate violation of an injunction or order described in subparagraph (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 injunction or order shall be deemed a separate offense. (B) Injunctions and orders Subparagraph (A) shall apply with respect to any action to enforce— (i) a Federal court injunction obtained pursuant to this title; (ii) an order entered or obtained by the Commission pursuant to this title that bars, suspends, places limitations on the activities or functions of, or prohibits the activities of a person; or (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 violation of an injunction or certain orders (A) In general Each separate violation of an injunction or order described in subparagraph (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 injunction or order shall be deemed a separate offense. (B) Injunctions and orders Subparagraph (A) shall apply with respect to any action to enforce— (i) a Federal court injunction obtained pursuant to this title; (ii) an order entered or obtained by the Commission pursuant to this title that bars, suspends, places limitations on the activities or functions of, or prohibits the activities of a person; or (iii) a cease-and-desist order entered by the Commission pursuant to section 203(k). .