CITE

    15 USC Sec. 80b-9                                           01/05/2009

EXPCITE

    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2D - INVESTMENT COMPANIES AND ADVISERS
    SUBCHAPTER II - INVESTMENT ADVISERS

HEAD

    Sec. 80b-9. Enforcement of subchapter

STATUTE

    (a) Investigation
      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 the authority thereof, have been or
    are about to be violated by any person, it may in its discretion
    require, and in any event shall permit, such person to file with it
    a statement in writing, under oath or otherwise, as to all the
    facts and circumstances relevant to such violation, and may
    otherwise investigate all such facts and circumstances.
    (b) Administration of oaths and affirmations, subpena of witnesses,
      etc.
      For the purposes of any investigation or any proceeding under
    this subchapter, any member of the Commission or any officer
    thereof designated by it is empowered to administer oaths and
    affirmations, subpena witnesses, compel their attendance, take
    evidence, and require the production of any books, papers,
    correspondence, memoranda, contracts, agreements, or other records
    which are relevant or material to the inquiry. Such attendance of
    witnesses and the production of any such records may be required
    from any place in any State or in any Territory or other place
    subject to the jurisdiction of the United States at any designated
    place of hearing.
    (c) Jurisdiction of courts of United States
      In case of contumacy by, or refusal to obey a subpena issued to,
    any person, the Commission may invoke the aid of any court of the
    United States within the jurisdiction of which such investigation
    or proceeding is carried on, or where such person resides or
    carries on business, in requiring the attendance and testimony of
    witnesses and the production of books, papers, correspondence,
    memoranda, contracts, agreements, and other records. And such court
    may issue an order requiring such person to appear before the
    Commission or member or officer designated by the Commission, there
    to produce records, if so ordered, or to give testimony touching
    the matter under investigation or in question; and any failure to
    obey such order of the court may be punished by such court as a
    contempt thereof. All process in any such case may be served in the
    judicial district whereof such person is an inhabitant or wherever
    he may be found. Any person who without just cause shall fail or
    refuse to attend and testify or to answer any lawful inquiry or to
    produce books, papers, correspondence, memoranda, contracts,
    agreements, or other records, if in his or its power so to do, in
    obedience to the subpena of the Commission, shall be guilty of a
    misdemeanor, and upon conviction shall be subject to a fine of not
    more than $1,000 or to imprisonment for a term of not more than one
    year, or both.
    (d) Action for injunction
      Whenever it shall appear to the Commission that any person has
    engaged, is engaged, or is about to engage in any act or practice
    constituting a violation of any provision of this subchapter, or of
    any rule, regulation, or order hereunder, or that any person has
    aided, abetted, counseled, commanded, induced, or procured, is
    aiding, abetting, counseling, commanding, inducing, or procuring,
    or is about to aid, abet, counsel, command, induce, or procure such
    a violation, it may in its discretion bring an action in the proper
    district court of the United States, or the proper United States
    court of any Territory or other place subject to the jurisdiction
    of the United States, to enjoin such acts or practices and to
    enforce compliance with this subchapter or any rule, regulation, or
    order hereunder. Upon a showing that such person has engaged, is
    engaged, or is about to engage in any such act or practice, or in
    aiding, abetting, counseling, commanding, inducing, or procuring
    any such act or practice, a permanent or temporary injunction or
    decree or restraining order shall be granted without bond. The
    Commission may transmit such evidence as may be available
    concerning any violation of the provisions of this subchapter, or
    of any rule, regulation, or order thereunder, to the Attorney
    General, who, in his discretion, may institute the appropriate
    criminal proceedings under this subchapter.
    (e) 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 80b-3(k) 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 80b-14 of this title, actions under
        this paragraph shall be actions to enforce a liability or a
        duty created by this subchapter.
      (4) Special provisions relating to violation of cease-and-desist
        order
        In an action to enforce a cease-and-desist order entered by the
      Commission pursuant to section 80b-3(k) 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.

SOURCE

    (Aug. 22, 1940, ch. 686, title II, Sec. 209, 54 Stat. 853; Pub. L.
    86-750, Sec. 12, Sept. 13, 1960, 74 Stat. 887; Pub. L. 91-452,
    title II, Sec. 216, Oct. 15, 1970, 84 Stat. 929; Pub. L. 100-181,
    title VII, Sec. 704, Dec. 4, 1987, 101 Stat. 1264; Pub. L. 101-429,
    title IV, Sec. 402, Oct. 15, 1990, 104 Stat. 949; Pub. L. 107-204,
    title III, Sec. 308(d)(5), July 30, 2002, 116 Stat. 785.)

AMENDMENTS

      2002 - Subsec. (e)(3)(A). Pub. L. 107-204 inserted ", except as
    otherwise provided in section 7246 of this title" before period at
    end.
      1990 - Subsec. (e). Pub. L. 101-429 added subsec. (e).
      1987 - Subsecs. (d), (e). Pub. L. 100-181 redesignated subsec.
    (e) as (d).
      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.
      1960 - Subsec. (e). Pub. L. 86-750 inserted ", is engaged," after
    "has engaged" wherever appearing, and inserted provisions relating
    to aiders and abettors.
                     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 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 PROVISION
      Amendment 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.

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.