
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 15USC77t]

 
                      TITLE 15--COMMERCE AND TRADE
 
               CHAPTER 2A--SECURITIES AND TRUST INDENTURES
 
                    SUBCHAPTER I--DOMESTIC SECURITIES
 
Sec. 77t. Injunctions and prosecution of offenses


(a) Investigation of violations

    Whenever it shall appear to the Commission, either upon complaint or 
otherwise, that the provisions of this subchapter, or of any rule or 
regulation prescribed under authority thereof, have been or are about to 
be violated, it may, in its discretion, either require or permit such 
person to file with it a statement in writing, under oath, or otherwise, 
as to all the facts and circumstances concerning the subject matter 
which it believes to be in the public interest to investigate, and may 
investigate such facts.

(b) Action for injunction or criminal prosecution in district court

    Whenever it shall appear to the Commission that any person is 
engaged or about to engage in any acts or practices which constitute or 
will constitute a violation of the provisions of this subchapter, or of 
any rule or regulation prescribed under authority thereof, the 
Commission may, in its discretion, bring an action in any district court 
of the United States, or United States court of any Territory, to enjoin 
such acts or practices, and upon a proper showing, a permanent or 
temporary injunction or restraining order shall be granted without bond. 
The Commission may transmit such evidence as may be available concerning 
such acts or practices to the Attorney General who may, in his 
discretion, institute the necessary criminal proceedings under this 
subchapter. Any such criminal proceeding may be brought either in the 
district wherein the transmittal of the prospectus or security 
complained of begins, or in the district wherein such prospectus or 
security is received.

(c) Writ of mandamus

    Upon application of the Commission, the district courts of the 
United States and the United States courts of any Territory shall have 
jurisdiction to issue writs of mandamus commanding any person to comply 
with the provisions of this subchapter or any order of the Commission 
made in pursuance thereof.

(d) Money penalties in civil actions

                     (1) Authority of Commission

        Whenever it shall appear to the Commission that any person has 
    violated any provision of this subchapter, the rules or regulations 
    thereunder, or a cease-and-desist order entered by the Commission 
    pursuant to section 77h-1 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.

                        (2) Amount of penalty

        (A) First tier

            The amount of the penalty shall be determined by the court 
        in light of the facts and circumstances. For each violation, the 
        amount of the penalty shall not exceed the greater of (i) $5,000 
        for a natural person or $50,000 for any other person, or (ii) 
        the gross amount of pecuniary gain to such defendant as a result 
        of the violation.

        (B) Second tier

            Notwithstanding subparagraph (A), the amount of penalty for 
        each such violation shall not exceed the greater of (i) $50,000 
        for a natural person or $250,000 for any other person, or (ii) 
        the gross amount of pecuniary gain to such defendant as a result 
        of the violation, if the violation described in paragraph (1) 
        involved fraud, deceit, manipulation, or deliberate or reckless 
        disregard of a regulatory requirement.

        (C) Third tier

            Notwithstanding subparagraphs (A) and (B), the amount of 
        penalty for each such violation shall not exceed the greater of 
        (i) $100,000 for a natural person or $500,000 for any other 
        person, or (ii) the gross amount of pecuniary gain to such 
        defendant as a result of the violation, if--
                (I) the violation described in paragraph (1) involved 
            fraud, deceit, manipulation, or deliberate or reckless 
            disregard of a regulatory requirement; and
                (II) such violation directly or indirectly resulted in 
            substantial losses or created a significant risk of 
            substantial losses to other persons.

                    (3) Procedures for collection

        (A) Payment of penalty to Treasury

            A penalty imposed under this section shall be payable into 
        the Treasury of the United States.

        (B) Collection of penalties

            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 may refer the matter to the Attorney 
        General who shall recover such penalty by action in the 
        appropriate United States district court.

        (C) Remedy not exclusive

            The actions authorized by this subsection may be brought in 
        addition to any other action that the Commission or the Attorney 
        General is entitled to bring.

        (D) Jurisdiction and venue

            For purposes of section 77v of this title, actions under 
        this section shall be actions to enforce a liability or a duty 
        created by this subchapter.

     (4) 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 77h-1 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 
    such an order, each day of the failure to comply with the order 
    shall be deemed a separate offense.

(e) Authority of court to prohibit persons from serving as officers and 
        directors

    In any proceeding under subsection (b) of this section, the court 
may prohibit, conditionally or unconditionally, and permanently or for 
such period of time as it shall determine, any person who violated 
section 77q(a)(1) of this title from acting as an officer or director of 
any issuer that has a class of securities registered pursuant to section 
78l of this title or that is required to file reports pursuant to 
section 78o(d) of this title if the person's conduct demonstrates 
substantial unfitness to serve as an officer or director of any such 
issuer.

(f) Prohibition of attorneys' fees paid from Commission disgorgement 
        funds

    Except as otherwise ordered by the court upon motion by the 
Commission, or, in the case of an administrative action, as otherwise 
ordered by the Commission, funds disgorged as the result of an action 
brought by the Commission in Federal court, or as a result of any 
Commission administrative action, shall not be distributed as payment 
for attorneys' fees or expenses incurred by private parties seeking 
distribution of the disgorged funds.

(May 27, 1933, ch. 38, title I, Sec. 20, 48 Stat. 86; Pub. L. 100-181, 
title II, Sec. 208, Dec. 4, 1987, 101 Stat. 1253; Pub. L. 101-429, title 
I, Sec. 101, Oct. 15, 1990, 104 Stat. 932; Pub. L. 104-67, title I, 
Sec. 103(b)(1), Dec. 22, 1995, 109 Stat. 756.)


                               Amendments

    1995--Subsec. (f). Pub. L. 104-67 added subsec. (f).
    1990--Subsecs. (d), (e). Pub. L. 101-429 added subsecs. (d) and (e).
    1987--Subsec. (b). Pub. L. 100-181, Sec. 208(a), inserted first 
sentence and struck out former first sentence containing similar 
provisions.
    Subsec. (c). Pub. L. 100-181, Sec. 208(b), amended subsec. (c) 
generally.


                    Effective Date of 1995 Amendment

    Amendment by Pub. L. 104-67 not to affect or apply to any private 
action arising under this subchapter or title I of the Securities 
Exchange Act of 1934 (15 U.S.C. 78a 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) and (2) of Pub. L. 101-429, set out in a note under 
section 77g of this title.


                     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 Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.), see 
section 203 of Pub. L. 104-67, set out as a Construction note under 
section 78j-1 of this title.

                          Transfer of Functions

    For transfer of functions of Securities and Exchange Commission, 
with certain exceptions, to Chairman of such Commission, see Reorg. Plan 
No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175, 64 Stat. 
1265, set out under section 78d of this title.

                  Section Referred to in Other Sections

    This section is referred to in section 77uuu of this title.
