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Bipartisan bill would increase SEC penalties

Joe Mont | April 5, 2017

A bipartisan legislative proposal aims to strengthen the Securities and Exchange Commission’s ability to crack down on violations of securities laws.

The Stronger Enforcement of Civil Penalties Act (SEC Penalties Act) of 2017 would update and strengthen the SEC’s civil penalties statute by increasing the statutory limits on civil monetary penalties, directly linking the size of these penalties to the scope of harm and associated investor losses, and substantially raising the financial stakes for repeat securities law violators. 

The legislation is sponsored by U.S. Senators Jack Reed (D-R.I.), Chuck Grassley (R-Iowa), Patrick Leahy (D-V.T.), and Heidi Heitkamp (D-N.D.).

Under existing law, the SEC is constrained to penalizing violators in some cases to a maximum of $181,071  per offense and institutions to $905,353. In other cases, it may calculate penalties to equal the gross amount of ill-gotten gain, but only if the matter goes to federal court, not when the...

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