Source: https://www.law.cornell.edu/uscode/text/15/78u%E2%80%931
Timestamp: 2018-07-21 00:29:57
Document Index: 754801355

Matched Legal Cases: ['§ 78', '§ 78', '§\u202f78', '§\u202f21', '§\u202f3', '§\u202f202', '§\u202f1', '§\u202f205', '§\u202f303', '§\u202f308', '§\u202f762', '§\u202f923', '§\u202f4', '§\u202f929', '§\u202f4', '§\u202f9', '§\u202f12', '§\u202f762', '§\u202f923', '§\u202f923', '§\u202f923', '§\u202f762', '§\u202f923', '§\u202f923', '§\u202f1', '§\u202f303', '§\u202f1', '§\u202f205', '§\u202f1', '§\u202f303', '§\u202f761', '§\u202f4', '§\u202f9', '§\u202f2', '§\u202f3']

15 U.S. Code § 78u-1 - Civil penalties for insider trading | US Law | LII / Legal Information Institute
15 U.S. Code § 78u-1 - Civil penalties for insider trading
§ 78u–1.
(1) Judicial actions by Commission authorizedWhenever it shall appear to the Commission that any person has violated any provision of this chapter or the rules or regulations thereunder by purchasing or selling a security or security-based swap agreement while in possession of material, nonpublic information in, or has violated any such provision by communicating such information in connection with, a transaction on or through the facilities of a national securities exchange or from or through a broker or dealer, and which is not part of a public offering by an issuer of securities other than standardized options or security futures products, the Commission—
may, subject to subsection (b)(1), bring an action in a United States district court to seek, and the court shall have jurisdiction to impose, a civil penalty to be paid by a person who, at the time of the violation, directly or indirectly controlled the person who committed such violation.
The amount of the penalty which may be imposed on any person who, at the time of the violation, directly or indirectly controlled the person who committed such violation, shall be determined by the court in light of the facts and circumstances, but shall not exceed the greater of $1,000,000, or three times the amount of the profit gained or loss avoided as a result of such controlled person’s violation. If such controlled person’s violation was a violation by communication, the profit gained or loss avoided as a result of the violation shall, for purposes of this paragraph only, be deemed to be limited to the profit gained or loss avoided by the person or persons to whom the controlled person directed such communication.
(1) Liability of controlling personsNo controlling person shall be subject to a penalty under subsection (a)(1)(B) unless the Commission establishes that—
such controlling person knowingly or recklessly failed to establish, maintain, or enforce any policy or procedure required under section 78o(f) [1] of this title or section 80b–4a of this title and such failure substantially contributed to or permitted the occurrence of the act or acts constituting the violation.
Subject to the rule of construction under section 10 of the STOCK Act and solely for purposes of the insider trading prohibitions arising under this chapter, including section 78j(b) of this title and Rule 10b–5 thereunder, each Member of Congress or employee of Congress owes a duty arising from a relationship of trust and confidence to the Congress, the United States Government, and the citizens of the United States with respect to material, nonpublic information derived from such person’s position as a Member of Congress or employee of Congress or gained from the performance of such person’s official responsibilities.
(2) DefinitionsIn this subsection—
(B) the term “employee of Congress” means—
any other officer or employee of the legislative branch (as defined in section 109(11) of the Ethics in Government Act of 1978 (5 U.S.C. App. 109(11))).
Subject to the rule of construction under section 10 of the STOCK Act and solely for purposes of the insider trading prohibitions arising under this chapter, including section 78j(b) of this title, and Rule 10b–5 thereunder, each executive branch employee, each judicial officer, and each judicial employee owes a duty arising from a relationship of trust and confidence to the United States Government and the citizens of the United States with respect to material, nonpublic information derived from such person’s position as an executive branch employee, judicial officer, or judicial employee or gained from the performance of such person’s official responsibilities.
(A) the term “executive branch employee”—
the term “judicial employee” has the meaning given that term in section 109(8) of the Ethics in Government Act of 1978 (5 U.S.C. App. 109(8)); and
the term “judicial officer” has the meaning given that term under section 109(10) of the Ethics in Government Act of 1978 (5 U.S.C. App. 109(10)).
(June 6, 1934, ch. 404, title I, § 21A, as added Pub. L. 100–704, § 3(a)(2), Nov. 19, 1988, 102 Stat. 4677; amended Pub. L. 101–429, title II, § 202(b), Oct. 15, 1990, 104 Stat. 938; Pub. L. 106–554, § 1(a)(5) [title II, § 205(a)(4), title III, § 303(k), (l)], Dec. 21, 2000, 114 Stat. 2763, 2763A–426, 2763A–456, 2763A–457; Pub. L. 107–204, title III, § 308(d)(2), July 30, 2002, 116 Stat. 785; Pub. L. 111–203, title VII, § 762(d)(7), title IX, § 923(b)(2), July 21, 2010, 124 Stat. 1761, 1850; Pub. L. 112–105, §§ 4(b)(2), 9(b)(2)(B), 12, Apr. 4, 2012, 126 Stat. 292, 297, 300.)
Subsec. (f) of section 78o of this title, referred to in subsec. (b)(1)(B), was redesignated (g) by Pub. L. 111–203, title IX, § 929X(c)(1), July 21, 2010, 124 Stat. 1870.
2012—Subsec. (g). Pub. L. 112–105, § 4(b)(2), added subsec. (g).
Subsec. (h). Pub. L. 112–105, § 9(b)(2)(B), added subsec. (h).
Subsec. (i). Pub. L. 112–105, § 12, added subsec (i).
2010—Subsec. (a)(1). Pub. L. 111–203, § 762(d)(7)(A), struck out “(as defined in section 206B of the Gramm-Leach-Bliley Act)” after “security-based swap agreement” in introductory provisions.
Subsec. (d)(1). Pub. L. 111–203, § 923(b)(2)(A), struck out “(subject to subsection (e) of this section)” after “shall” and inserted “and section 78u–6 of this title” after “section 7246 of this title”.
Subsec. (e). Pub. L. 111–203, § 923(b)(2)(B), (C), redesignated subsec. (f) as (e) and struck out former subsec. (e). Prior to amendment, text of subsec. (e) read as follows: “Notwithstanding the provisions of subsection (d)(1) of this section, there shall be paid from amounts imposed as a penalty under this section and recovered by the Commission or the Attorney General, such sums, not to exceed 10 percent of such amounts, as the Commission deems appropriate, to the person or persons who provide information leading to the imposition of such penalty. Any determinations under this subsection, including whether, to whom, or in what amount to make payments, shall be in the sole discretion of the Commission, except that no such payment shall be made to any member, officer, or employee of any appropriate regulatory agency, the Department of Justice, or a self-regulatory organization. Any such determination shall be final and not subject to judicial review.”
Subsec. (f). Pub. L. 111–203, § 923(b)(2)(C), redesignated subsec. (g) as (f). Former subsec. (f) redesignated (e).
Pub. L. 111–203, § 762(d)(7)(B), which directed amendment of subsec. (g) by striking out “(as defined in section 206B of the Gramm-Leach-Bliley Act)”, was executed by making the strike out after “security-based swap agreements” in subsec. (f), to reflect the probable intent of Congress and the redesignation of subsec. (g) as (f) by Pub. L. 111–203, § 923(b)(2)(C). See above and Effective Date of 2010 Amendment note below.
Subsec. (g). Pub. L. 111–203, § 923(b)(2)(C), redesignated subsec. (g) as (f).
2002—Subsec. (d)(1). Pub. L. 107–204 inserted “, except as otherwise provided in section 7246 of this title” before period at end.
2000—Subsec. (a)(1). Pub. L. 106–554, § 1(a)(5) [title III, § 303(k)], inserted “or security-based swap agreement (as defined in section 206B of the Gramm-Leach-Bliley Act)” after “purchasing or selling a security” in introductory provisions.
Pub. L. 106–554, § 1(a)(5) [title II, § 205(a)(4)], substituted “standardized options or security futures products, the Commission—” for “standardized options, the Commission—” in introductory provisions.
Subsec. (g). Pub. L. 106–554, § 1(a)(5) [title III, § 303(l)], added subsec. (g).
1990—Pub. L. 101–429 inserted “for insider trading” in section catchline.
Amendment by section 762(d)(7) of Pub. L. 111–203 effective on the later of 360 days after July 21, 2010, or, to the extent a provision of subtitle B (§§ 761–774) of title VII of Pub. L. 111–203 requires a rulemaking, not less than 60 days after publication of the final rule or regulation implementing such provision of subtitle B, see section 774 of Pub. L. 111–203, set out as a note under section 77b of this title.
Pub. L. 112–105, § 4(b)(1), Apr. 4, 2012, 126 Stat. 292, provided that:
“The purpose of the amendment made by this subsection [amending this section] is to affirm a duty arising from a relationship of trust and confidence owed by each Member of Congress and each employee of Congress.”
Pub. L. 112–105, § 9(b)(2)(A), Apr. 4, 2012, 126 Stat. 297, provided that:
“The purpose of the amendment made by this paragraph [amending this section] is to affirm a duty arising from a relationship of trust and confidence owed by each executive branch employee, judicial officer, and judicial employee.”
Pub. L. 100–704, § 2, Nov. 19, 1988, 102 Stat. 4677, provided that:
the rules and regulations of the Securities and ExchangeCommission under the Securities Exchange Act of 1934 [15 U.S.C. 78a et seq.] governing trading while in possession of material, nonpublic information are, as required by such Act, necessary and appropriate in the public interest and for the protection of investors;
the Commission has, within the limits of accepted administrative and judicial construction of such rules and regulations, enforced such rules and regulations vigorously, effectively, and fairly; and
nonetheless, additional methods are appropriate to deter and prosecute violations of such rules and regulations.”
Pub. L. 100–704, § 3(c), Nov. 19, 1988, 102 Stat. 4680, provided that:
“The Securities and ExchangeCommission shall, within 60 days after the date of enactment of this Act [Nov. 19, 1988], submit to each House of the Congress any recommendations the Commission considers appropriate with respect to the extension of the Commission’s authority to seek civil penalties or impose administrative fines for violations other than those described in section 21A of the Securities Exchange Act of 1934 [15 U.S.C. 78u–1] (as added by this section).”