Insider Trading Sanctions Act of 1984
PL 98-376 (H.R.559), enacted 08/10/1984

98 STAT. 1264 
PUBLIC LAW 98-376—AUG. 10, 1984 
Public Law 98-376 
98th Congress 
A n Act 
Aug. 10, 1984 
To amend the Securities Exchange Act of 1934 to increase the sanctions against 
trading in securities while in possession of material nonpublic information. 
[H.R. 559] 
Insider Trading 
Sanctions Act of 
1984. 
15 use 78a note. 
15 use 78u. 
15 use 78aa. 
Prohibition. 
15 use 78t. 
Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled, 
SECTION 1. ITiis Act may be cited as the "Insider Trading Sanc-
tions Act of 1984". 
SEC. 2. Section 21 of the Securities Exchange Act of 1934 is 
amended by redesignating subsection (d) as subsection (d)(1), and 
adding at the end thereof the following new paragraph: 
"(2)(A) Whenever it shall appear to the Commission that any 
person has violated any provision of this title or the rules or 
regulations thereunder by purchasing or selling a security while in 
possession of material nonpublic information in a transaction (i) on 
or through the facilities of a national securities exchange or from or 
through a broker or dealer, and (ii) which is not part of a public 
offering by an issuer of securities other than standardized options, 
the Commission may 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 such person, or any person aiding and abetting 
the violation of such person. The amount of such penalty shall be 
determined by the court in light of the facts and circumstances, but 
shall not exceed three times the profit gained or loss avoided as a 
result of such unlawful purchase or sale, and shall be payable into 
the Treasury of the United States. If a person upon whom such a 
penalty is imposed shall fail to pay such penalty within the time 
prescribed in the court's order, the Commission shall refer the 
matter to the Attorney General who shall recover such penalty by 
action in the appropriate United States district court. The actions 
authorized by this paragraph may be brought in addition to any 
other actions that the Commission or the Attorney General are 
entitled to bring. For purposes of section 27 of this title, actions 
under this paragraph shall be actions to enforce a liability or a duty 
created by this title. The Commission, by rule or regulation, may 
exempt from the provisions of this paragraph any class of persons or 
transactions. 
"(B) No person shall be subject to a sanction under subparagraph 
(A) of this paragraph solely because that person aided and abetted a 
transaction covered by such subparagraph in a manner other than 
by communicating material nonpublic information. Section 20(a) of 
this title shall not apply to an action brought under this paragraph. 
No person shall be liable under this paragraph solely by reason of 
employing another person who is liable under this paragraph. 
"(C) For purposes of this paragraph 'profit gained' or 'loss avoided' 
is the difference between the purchase or sale price of the security 
and the value of that security as measured by the trading price of 
the security a reasonable period after public disseminaton of the 
nonpublic information. 
PUBLIC LAW 98-376—AUG. 10, 1984 
98 STAT. 1265 
"(D) No action may be brought under this paragraph more than Prohibitions. 
five years after the date of the purchase or sale. This paragraph 
shall not be construed to bar or limit in any manner any action by 
the Commission or the Attorney General under any other provision 
of this title, nor shall it bar or limit in any manner any action to 
recover penalties, or to seek any other order regarding penalties, 
imposed in an action commenced within five years of such 
SEC. 3. Section 32 of the Securities Exchange Act of 1934 is i5USC78ff. 
amended by striking "$10,000" from subsection (a) and inserting in 
lieu thereof "$100,000". 
SEC. 4. Section 15(c)(4) of the Securities Exchange Act of 1934 is 15 use 78o. 
amended to read as follows: 
"(4) If the Commission finds, after notice and opportunity for a 
hearing, that any person subject to the provisions of section 12, 13, 
14, or subsection (d) of section 15 of this title or any rule or 
15 USC 78/, 
regulation thereunder has failed to comply with any such provision, 78111-780. 
rule, or regulation in any material respect, the Commission may 
publish its findings and issue an order requiring such person, and 
any person who was a cause of the failure to comply due to an act or 
omission the person knew or should have known would contribute to 
the failure to comply, to comply, or to take steps to effect compli-
ance, with such provision or such rule or regulation thereunder 
upon such terms and conditions and within such time as the Com-
mission may specify in such order.". 
SEC. 5. Section 20 of the Securities Exchange Act of 1934 is i5USC78t. 
amended by adding at the end thereof the following: 
"(d) Wherever communicating, or purchasing or selling a security 
while in possession of, material nonpublic information would vio-
late, or result in liability to any purchaser or seller of the security 
under any provision of this title, or any rule or regulation thereun-
der, such conduct in connection with a purchase or sale of a put, 
call, straddle, option, or privilege with respect to such security or 
with respect to a group or index of securities including such secu-
rity, shall also violate and result in comparable liability to any 
purchaser or seller of that security under such provision, rule, or 
regulation.". 
SEC. 6. (a) Section 3(a)(39) of the Securities Exchange Act of 1934 
(15 U.S.C. 78c(a)(39)) is amended— 
(1) by inserting before the semicolon at the end of subpara-
graph (A) the following: ", contract market designated pursuant 
to section 5 of the Commodity Exchange Act (7 U.S.C. 7), or 
futures association registered under section 17 of such Act (7 
U.S.C. 21), or has been and is denied trading privileges on any 
such contract market"; 
(2) by inserting before the semicolon at the end of subpara-
graph (B) the following: ", or is subject to an order of the 
Commodity Futures Trading Commission denying, suspending, 
or revoking his registration under the Commodity Exchange 
Act (7 U.S.C. 1 et seq.)"; and 
(3) by inserting after "municipal securities dealer," in sub-
paragraph (C) the following: "or while associated with an entity 
or person required to be registered under the Commodity 
Exchange Act,". 
(b) Section 15(b)(4) of such Act (15 U.S.C. 78o(b)(4)) is amended— i5USC78o. 
(1) by striking out "or fiduciary" in subparagraph (B)(ii) and 
inserting in lieu thereof "fiduciary, or any entity or person 
98 STAT. 1266 
PUBLIC LAW 98-376—AUG. 10, 1984 
required to be registered under the Commodity Exchange Act (7 
U.S.C. 1 et seq.)"; 
(2) in subparagraph (C)— 
(A) by inserting "entity or person required to be regis-
tered under the Commodity Exchange Act," before "or 
municipal securities dealer"; and 
(B) by inserting "entity or person required to be regis-
tered under such Act," before "or insurance company"; and 
(3) by inserting "the Commodity Exchange Act," after "In-
vestment Company Act of 1940," each place it appears in 
subparagraphs (D) and (E). 
Effective date. 
SEC. 7. The amendments made by this Act shall become effective 
1
5 use 78c note, immediately upon enactment of this Act. 
Approved August 10, 1984. 
LEGISLATIVE HISTORY—H.R. 559 (S. 910): 
HOUSE REPORT No. 98-355 (Comm. oh Energy and Commerce). 
CONGRESSIONAL RECORD: 
Vol. 129 (1983): Sept. 19, considered and passed House. 
Vol. 130 (1984): June 29, considered and passed Senate, amended, in lieu of 
S. 910. 
July 25, House concurred in Senate amendment. 
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 20, No. 33 (1984): 
Aug. 11, Presidential statement.