15 U.S.C. § 77t : US Code - Section 77T: Injunctions and prosecution of offenses

Search 15 U.S.C. § 77t : US Code - Section 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, except as otherwise provided
in section 7246 of this title.
(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 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.
(g) Authority of a court to prohibit persons from participating in
an offering of penny stock
(1) In general
In any proceeding under subsection (a) of this section against
any person participating in, or, at the time of the alleged
misconduct, who was participating in, an offering of penny stock,
the court may prohibit that person from participating in an
offering of penny stock, conditionally or unconditionally, and
permanently or for such period of time as the court shall
determine.
(2) Definition
For purposes of this subsection, the term "person participating
in an offering of penny stock" includes any person engaging in
activities with a broker, dealer, or issuer for purposes of
issuing, trading, or inducing or attempting to induce the
purchase or sale of, any penny stock. The Commission may, by rule
or regulation, define such term to include other activities, and
may, by rule, regulation, or order, exempt any person or class of
persons, in whole or in part, conditionally or unconditionally,
from inclusion in such term.