Source: https://casetext.com/statute/united-states-code/title-15-commerce-and-trade/chapter-2b-securities-exchanges/section-78u-investigations-and-actions
Timestamp: 2020-08-05 17:06:33
Document Index: 667144456

Matched Legal Cases: ['§ 78', '§708', '§21', '§7', '§212', '§17', '§3', '§2', '§323', '§3', '§201', '§321', '§103', '§1', '§205', '§3', '§305', '§603', '§923', '§708', '§3401', '§108', '§929', '§929', '§923', '§986', '§3', '§3', '§305', '§308', '§305', '§603', '§3', '§3', '§6', '§3', '§323', '§323', '§323', '§4', '§3', '§17', '§17', '§17', '§17', '§5', '§102']

Section 78u - Investigations and actions, 15 U.S.C. § 78u | Casetext Search + Citator
(A) AUTHORITY OF COMMISSION.-Whenever it shall appear to the Commission that any person has violated any provision of this chapter, the rules or regulations thereunder, or a cease-and-desist order entered by the Commission pursuant to section 78u-3 of this title, other than by committing a violation subject to a penalty pursuant to section 78u-1 of this title, the Commission may bring an action in a United States district court to seek, and the court shall have jurisdiction to impose, upon a proper showing, a civil penalty to be paid by the person who committed such violation.
(i) PAYMENT OF PENALTY TO TREASURY.-A penalty imposed under this section shall be payable into the Treasury of the United States, except as otherwise provided in section 7246 of this title and section 78u-6 of this title.
(D) SPECIAL PROVISIONS RELATING TO A VIOLATION OF A CEASE-AND-DESIST ORDER.-In an action to enforce a cease-and-desist order entered by the Commission pursuant to section 78u-3 of this title, each separate violation of such order shall be a separate offense, except that in the case of a violation through a continuing failure to comply with the order, each day of the failure to comply shall be deemed a separate offense.
(1) The Right to Financial Privacy Act of 1978 [ 12 U.S.C. 3401 et seq.] shall apply with respect to the Commission, except as otherwise provided in this subsection.
(2) Notwithstanding section 1105 or 1107 of the Right to Financial Privacy Act of 1978 [ 12 U.S.C. 3405 or 3407 ], the Commission may have access to and obtain copies of, or the information contained in financial records of a customer from a financial institution without prior notice to the customer upon an ex parte showing to an appropriate United States district court that the Commission seeks such financial records pursuant to a subpena issued in conformity with the requirements of section 19(b) 1 of the Securities Act of 1933, section 21(b) of the Securities Exchange Act of 1934 [ 15 U.S.C. 78u(b) ], section 42(b) of the Investment Company Act of 1940 [ 15 U.S.C. 80a-41(b) ], or section 209(b) of the Investment Advisers Act of 1940 [ 15 U.S.C. 80b-9(b) ], and that the Commission has reason to believe that-
(A) Upon a showing described in paragraph (2), the presiding judge or magistrate judge shall enter an ex parte order granting the requested delay for a period not to exceed ninety days and an order prohibiting the financial institution involved from disclosing that records have been obtained or that a request for records has been made.
(B) Extensions of the period of delay of notice provided in subparagraph (A) of up to ninety days each may be granted by the court upon application, but only in accordance with this subsection or section 1109(a), (b)(1), or (b)(2) of the Right to Financial Privacy Act of 1978 [ 12 U.S.C. 3409(a), (b)(1), or (b)(2) ].
(6) Repealed. Pub. L. 114-113, div. O, title VII, §708, Dec. 18, 2015, 129 Stat. 3030.
(A) Following the expiration of the period of delay of notification ordered by the court pursuant to paragraph (4) of this subsection, the customer may, upon motion, reopen the proceeding in the district court which issued the order. If the presiding judge or magistrate judge finds that the movant is the customer to whom the records obtained by the Commission pertain, and that the Commission has obtained financial records or information contained therein in violation of this subsection, other than paragraph (1), it may order that the customer be granted civil penalties against the Commission in an amount equal to the sum of-
(8) The relief described in paragraphs (7) and (10) shall be the only remedies or sanctions available to a customer for a violation of this subsection, other than paragraph (1), and nothing herein or in the Right to Financial Privacy Act of 1978 [ 12 U.S.C. 3401 et seq.] shall be deemed to prohibit the use in any investigation or proceeding of financial records, or the information contained therein, obtained by a subpena issued by the Commission. In the case of an unsuccessful action under paragraph (7), the court shall award the costs of the action and attorney's fees to the Commission if the presiding judge or magistrate judge finds that the customer's claims were made in bad faith.
(A) The Commission may transfer financial records or the information contained therein to any government authority if the Commission proceeds as a transferring agency in accordance with section 1112 of the Right to Financial Privacy Act of 1978 [ 12 U.S.C. 3412 ], except that the customer notice required under section 1112(b) or (c) of such Act [ 12 U.S.C. 3412(b) or (c) ] may be delayed upon a showing by the Commission, in accordance with the procedure set forth in paragraphs (4) and (5), that one or more of subparagraphs (A) through (D) of paragraph (2) apply.
(B) The Commission may, without notice to the customer pursuant to section 1112 or the Right to Financial Privacy Act of 1978 [ 12 U.S.C. 3412 ], transfer financial records or the information contained therein to a State securities agency or to the Department of Justice. Financial records or information transferred by the Commission to the Department of Justice or to a State securities agency pursuant to the provisions of this subparagraph may be disclosed or used only in an administrative, civil, or criminal action or investigation by the Department of Justice or the State securities agency which arises out of or relates to the acts, practices, or courses of conduct investigated by the Commission, except that if the Department of Justice or the State securities agency determines that the information should be disclosed or used for any other purpose, it may do so if it notifies the customer, except as otherwise provided in the Right to Financial Privacy Act of 1978 [ 12 U.S.C. 3401 et seq.], within 30 days of its determination, or complies with the requirements of section 1109 of such Act [ 12 U.S.C. 3409 ] regarding delay of notice.
(11) Notwithstanding the provisions of this subsection, the Commission may obtain financial records from a financial institution or transfer such records in accordance with provisions of the Right to Financial Privacy Act of 1978 [ 12 U.S.C. 3401 et seq.].
(13) Unless the context otherwise requires, all terms defined in the Right to Financial Privacy Act of 1978 [ 12 U.S.C. 3401 et seq.] which are common to this subsection shall have the same meaning as in such Act.
June 6, 1934, ch. 404, title I, §21, 48 Stat. 899; May 27, 1936, ch. 462, §7, 49 Stat. 1379; Pub. L. 91-452, title II, §212, Oct. 15, 1970, 84 Stat. 929; Pub. L. 94-29, §17, June 4, 1975, 89 Stat. 154; Pub. L. 96-433, §§3, 4, Oct. 10, 1980, 94 Stat. 1855, 1858; Pub. L. 98-376, §2, Aug. 10, 1984, 98 Stat. 1264; Pub. L. 100-181, title III, §323, Dec. 4, 1987, 101 Stat. 1259; Pub. L. 100-704, §§3(a)(1), 6(b), Nov. 19, 1988, 102 Stat. 4677, 4681; Pub. L. 101-429, title II, §201, Oct. 15, 1990, 104 Stat. 935; Pub. L. 101-650, title III, §321, Dec. 1, 1990, 104 Stat. 5117; Pub. L. 104-67, title I, §103(b)(2), Dec. 22, 1995, 109 Stat. 756; Pub. L. 106-554, §1(a)(5) [title II, §205(a)(5)], Dec. 21, 2000, 114 Stat. 2763, 2763A-426; Pub. L. 107-204, §3(b)(2), title III, §§305(a)(1), (b), 308(d)(1), title VI, §603(a), July 30, 2002, 116 Stat. 749, 778, 779, 785, 794; Pub. L. 111-203, title IX, §§923(b)(1), 929F (2), 986(a)(3), July 21, 2010, 124 Stat. 1849, 1854, 1855, 1935; Pub. L. 114-113, div. O, title VII, §708, Dec. 18, 2015, 129 Stat. 3030.
REFERENCES IN TEXTThis chapter, referred to in subsecs. (a)(1), (b), (d), (e), and (f), was in the original "this title". See References in Text note set out under section 78a of this title.The Right to Financial Privacy Act of 1978, referred to in subsec. (h)(1), (8), (9)(B), (11), and (13), is title XI of Pub. L. 95-630, Nov. 10, 1978, 92 Stat. 3697, which is classified generally to chapter 35 (§3401 et seq.) of Title 12, Banks and Banking. For complete classification of this Act to the Code, see Short Title note set out under section 3401 of Title 12 and Tables.Section 19(b) of the Securities Act of 1933, referred to in subsec. (h)(2), was redesignated section 19(c) by Pub. L. 107-204, title I, §108(a)(1), July 30, 2002, 116 Stat. 768, and is classified to section 77s(c) of this title. Section 21(h) of the Securities Exchange Act of 1934, referred to in the paragraph within quotation marks following subsec. (h)(4)(C), is classified to subsection (h) of this section.
AMENDMENTS2015-Subsec. (h)(6). Pub. L. 114-113 struck out par. (6) which read as follows: "The Commission shall compile an annual tabulation of the occasions on which the Commission used each separate subparagraph or clause of paragraph (2) of this subsection or the provisions of the Right to Financial Privacy Act of 1978 to obtain access to financial records of a customer and include it in its annual report to the Congress. Section 1121(b) of the Right to Financial Privacy Act of 1978 shall not apply with respect to the Commission." 2010-Subsec. (a)(1). Pub. L. 111-203, §929F(g)(2), in first sentence, substituted ", a person associated with such a firm, or, as to any act, practice, or omission to act, while associated with such firm, a person formerly associated with such a firm" for "or a person associated with such a firm". Pub. L. 111-203, §929F(c), (d), in first sentence, inserted ", or, as to any act or practice, or omission to act, while associated with a member, formerly associated" after "member or a person associated" and "or, as to any act or practice, or omission to act, while a participant, was a participant," after "in which such person is a participant,".Subsec. (d)(3)(C)(i). Pub. L. 111-203, §923(b)(1), inserted "and section 78u-6 of this title" after "section 7246 of this title". Subsec. (h)(2). Pub. L. 111-203, §986(a)(3), struck out "section 18(c) of the Public Utility Holding Company Act of 1935," after "section 21(b) of the Securities Exchange Act of 1934,".2002-Subsec. (a)(1). Pub. L. 107-204, §3(b)(2)(A), inserted "the rules of the Public Company Accounting Oversight Board, of which such person is a registered public accounting firm or a person associated with such a firm," after "is a participant,". Subsec. (d)(1). Pub. L. 107-204, §3(b)(2)(B), inserted "the rules of the Public Company Accounting Oversight Board, of which such person is a registered public accounting firm or a person associated with such a firm," after "is a participant,".Subsec. (d)(2). Pub. L. 107-204, §305(a)(1), substituted "unfitness" for "substantial unfitness". Subsec. (d)(3)(C)(i). Pub. L. 107-204, §308(d)(1), inserted ", except as otherwise provided in section 7246 of this title" before period at end.Subsec. (d)(5). Pub. L. 107-204, §305(b), added par. (5). Subsec. (d)(6). Pub. L. 107-204, §603(a), added par. (6).Subsec. (e). Pub. L. 107-204, §3(b)(2)(C), inserted "the rules of the Public Company Accounting Oversight Board, of which such person is a registered public accounting firm or a person associated with such a firm," after "is a participant,". Subsec. (f). Pub. L. 107-204, §3(b)(2)(D), inserted "or the Public Company Accounting Oversight Board" after "self-regulatory organization" in two places. 2000-Subsec. (i). Pub. L. 106-554 added subsec. (i).1995-Subsec. (d)(4). Pub. L. 104-67 added par. (4).1990-Subsec. (d). Pub. L. 101-429 designated existing provision as par. (1) and added pars. (2) and (3).1988-Subsec. (a). Pub. L. 100-704, §6(b), designated existing provisions as par. (1) and added par. (2).Subsec. (d). Pub. L. 100-704, §3(a)(1), redesignated par. (1) as entire subsec. (d) and struck out par. (2) which provided civil penalties for purchasing or selling securities while in possession of material nonpublic information. 1987-Subsec. (d). Pub. L. 100-181, §323(1), substituted "Whenever" for "Wherever". Subsec. (e). Pub. L. 100-181, §323(2), struck out ", the United States District Court for the District of Columbia," after "the district courts of the United States".Subsec. (g). Pub. L. 100-181, §323(3), struck out "The term 'securities laws' as used herein and in subsection (h) of this section includes the Securities Act of 1933 ( 15 U.S.C. 77a et seq.), the Securities Exchange Act of 1934 ( 15 U.S.C. 78a et seq.), the Public Utility Holding Company Act of 1935 ( 15 U.S.C. 79 et seq.), the Trust Indenture Act of 1939 ( 15 U.S.C. 77aa a et seq.), the Investment Company Act of 1940 ( 15 U.S.C. 80a-1 et seq.), the Investment Advisers Act of 1940 ( 15 U.S.C. 80b-1 et seq.), and the Securities Investor Protection Act of 1970 ( 15 U.S.C. 78aa a et seq.)." See 15 U.S.C. 78c(a)(47).1984-Subsec. (d). Pub. L. 98-376 designated existing provisions as par. (1) and added par. (2).1980-Subsec. (g). Pub. L. 96-433, §4, inserted "and in subsection (h) of this section."Subsec. (h). Pub. L. 96-433, §3, added subsec. (h). 1975-Subsec. (a). Pub. L. 94-29, §17(1), expanded the Commission's power to conduct investigations to include violations of the rules of a national securities exchange, registered securities association, registered clearing agency, or the Municipal Securities Rulemaking Board.Subsec. (d). Pub. L. 94-29, §17(2), redesignated subsec. (e) as (d) and amended it generally, substituting "has engaged, is engaged, or is about to engage" for "is engaged or about to engage", "any provision" for "the provisions", "the rules or regulations" for "or of any rule or regulation", and "such a showing" for "a proper showing", and inserting "the rules of a national securities exchange or registered securities association of which such persons is a member or a person associated with a member, the rules of a registered clearing agency in which such person is a participant, or the rules of the Municipal Securities Rulemaking Board," in first sentence and inserting "as may constitute a violation of any provision of this chapter or the rules or regulations thereunder" in second sentence. Former subsec. (d) was repealed by Pub. L. 91-452. See 1970 Amendment note below. Subsec. (e). Pub. L. 94-29, §17(2), redesignated subsec. (f) as (e) and amended it generally, substituting "mandamus, injunctions, and orders commanding (1) any person to comply with the provisions of this chapter, the rules, regulations, and orders thereunder, the rules of a national securities exchange or registered securities association of which such person is a member or person associated with a member, the rules of a registered clearing agency in which such person is a participant, the rules of the Municipal Securities Rulemaking Board, or any undertaking contained in a registration statement as provided in subsection (d) of section 78o of this title" for "mandamus commanding any person to comply with the provisions of this chapter or any order of the Commission made in pursuance thereof or with any undertaking contained in a registration statement as provided in subsection (d) of section 78o of this title" and adding cls. (2) and (3). Former subsec. (e) redesignated (d). Subsecs. (f), (g). Pub. L. 94-29, §17(3), added subsecs. (f) and (g). Former subsec. (f) redesignated (e). 1970-Subsec. (d). Pub. L. 91-452 struck out subsec. (d) which related to immunity from prosecution of any individual compelled to testify or produce evidence, documentary or otherwise, after claiming his privilege against self-incrimination. 1936-Subsec. (f). Act May 27, 1936, inserted "or with any undertaking contained in a registration statement as provided in subsection (d) of section 78o of this title".
CHANGE OF NAMEWords "magistrate judge" substituted for "magistrate" wherever appearing in subsec. (h)(4)(A), (5), (7)(A), (8) pursuant to section 321 of Pub. L. 101-650 set out as a note under section 631 of Title 28, Judiciary and Judicial Procedure.
EFFECTIVE DATE OF 1995 AMENDMENT Amendment by Pub. L. 104-67 not to affect or apply to any private action arising under this chapter or title I of the Securities Act of 1933 ( 15 U.S.C. 77a et seq.), commenced before and pending on Dec. 22, 1995, see section 108 of Pub. L. 104-67 set out as a note under section 77l of this title.
EFFECTIVE DATE OF 1990 AMENDMENT Amendment by Pub. L. 101-429 effective Oct. 15, 1990, with provisions relating to civil penalties and accounting and disgorgement, see section 1(c)(1), (2) of Pub. L. 101-429 set out in a note under section 77g of this title.
EFFECTIVE DATE OF 1988 AMENDMENT Amendment by section 3(a)(1) of Pub. L. 100-704 not applicable to actions occurring before Nov. 19, 1988, see section 9 of Pub. L. 100-704 set out as a note under section 78o of this title.
EFFECTIVE DATE OF 1984 AMENDMENT Amendment by Pub. L. 98-376 effective Aug. 10, 1984, see section 7 of Pub. L. 98-376 set out as a note under section 78c of this title.
EFFECTIVE DATE OF 1980 AMENDMENT Pub. L. 96-433, §5, Oct. 10, 1980, 94 Stat. 1858, provided that: "(a) The amendments made by section 1 of this Act [amending section 78fff-3 of this title] shall take effect on the date of enactment of this Act [Oct. 10, 1980]."(b) The amendments made by sections 2, 3, and 4 of this Act [amending this section and section 3422 of Title 12, Banks and Banking] shall take effect on November 10, 1980. Nothing in this Act [amending this section and section 78fff-3 of this title and section 3422 of Title 12] or in the Right to Financial Privacy Act of 1978 [ 12 U.S.C. 3401 et seq.] shall apply to any Securities and Exchange Commission subpena issued prior to such date."
EFFECTIVE DATE OF 1970 AMENDMENT Amendment by Pub. L. 91-452 effective on sixtieth day following Oct. 15, 1970, see section 260 of Pub. L. 91-452 set out as an Effective Date; Savings Provision note under section 6001 of Title 18, Crimes and Criminal Procedure.
SAVINGS PROVISIONAmendment by Pub. L. 91-452 not to affect any immunity to which any individual is entitled under this section by reason of any testimony given before the sixtieth day following Oct. 15, 1970, see section 260 of Pub. L. 91-452 set out as an Effective Date; Savings Provision note under section 6001 of Title 18, Crimes and Criminal Procedure.
CONSTRUCTION OF 1995 AMENDMENT Nothing in amendment by Pub. L. 104-67 to be deemed to create or ratify any implied right of action, or to prevent Commission, by rule or regulation, from restricting or otherwise regulating private actions under this chapter, see section 203 of Pub. L. 104-67 set out as a Construction note under section 78j-1 of this title.
PROMOTION OF RECIPROCAL SUBPOENA ENFORCEMENT Pub. L. 105-353, title I, §102, Nov. 3, 1998, 112 Stat. 3233, provided that:"(a) COMMISSION ACTION.-The Securities and Exchange Commission, in consultation with State securities commissions (or any agencies or offices performing like functions), shall seek to encourage the adoption of State laws providing for reciprocal enforcement by State securities commissions of subpoenas issued by another State securities commission seeking to compel persons to attend, testify in, or produce documents or records in connection with an action or investigation by a State securities commission of an alleged violation of State securities laws."(b) REPORT.-Not later than 24 months after the date of enactment of this Act [Nov. 3, 1998], the Securities and Exchange Commission (hereafter in this section referred to as the 'Commission') shall submit a report to the Congress-"(1) identifying the States that have adopted laws described in subsection (a); "(2) describing the actions undertaken by the Commission and State securities commissions to promote the adoption of such laws; and"(3) identifying any further actions that the Commission recommends for such purposes."