[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 799 Introduced in Senate (IS)]
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116th CONGRESS
1st Session
S. 799
To amend the Securities Exchange Act of 1934 to clarify that the
Securities and Exchange Commission may seek disgorgement and
restitution as a result of a violation of the securities laws, to
establish the statute of limitations for disgorgement and equitable
actions brought by the Commission, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
March 14, 2019
Mr. Warner (for himself and Mr. Kennedy) introduced the following bill;
which was read twice and referred to the Committee on Banking, Housing,
and Urban Affairs
_______________________________________________________________________
A BILL
To amend the Securities Exchange Act of 1934 to clarify that the
Securities and Exchange Commission may seek disgorgement and
restitution as a result of a violation of the securities laws, to
establish the statute of limitations for disgorgement and equitable
actions brought by the Commission, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Securities Fraud Enforcement and
Investor Compensation Act of 2019''.
SEC. 2. INVESTIGATIONS AND PROSECUTION OF OFFENSES FOR VIOLATIONS OF
THE SECURITIES LAWS.
(a) In General.--Section 21(d) of the Securities Exchange Act of
1934 (15 U.S.C. 78u(d)) is amended--
(1) in paragraph (3)--
(A) in the paragraph heading--
(i) by inserting ``Civil'' before ``Money
penalties''; and
(ii) by striking ``in civil actions'' and
inserting ``and authority to seek
disgorgement'';
(B) in subparagraph (A), by striking ``jurisdiction
to impose'' and all that follows through the period at
the end and inserting the following: ``jurisdiction
to--
``(i) impose, upon a proper showing, a civil
penalty to be paid by the person who committed such
violation; and
``(ii) require disgorgement under paragraph (7) by
the person who received any unjust enrichment as a
result of such violation.''; and
(C) in subparagraph (B)--
(i) in clause (i), in the first sentence,
by striking ``the penalty'' and inserting ``a
civil penalty imposed under subparagraph
(A)(i)'';
(ii) in clause (ii), by striking ``amount
of penalty'' and inserting ``amount of a civil
penalty imposed under subparagraph (A)(i)'';
and
(iii) in clause (iii), in the matter
preceding item (aa), by striking ``amount of
penalty for each such violation'' and inserting
``amount of a civil penalty imposed under
subparagraph (A)(i) for each violation
described in that subparagraph'';
(2) in paragraph (4), by inserting ``under paragraph (7)''
after ``funds disgorged''; and
(3) by adding at the end the following:
``(7) Disgorgement.--
``(A) In general.--In any action or proceeding brought by
the Commission under any provision of the securities laws, the
Commission may seek, and any Federal court may order,
disgorgement of any unjust enrichment that a person obtained as
a result of a violation of that provision.
``(B) Calculation.--Any disgorgement that is ordered with
respect to a person under subparagraph (A) shall be offset by
any amount of restitution that the person is ordered to pay
under paragraph (8).
``(8) Restitution.--In any proceeding brought or instituted by the
Commission under any provision of the securities laws, the Commission
may seek, and any Federal court, or, with respect to a proceeding
instituted by the Commission, the Commission, may order restitution to
an investor in the amount of the loss that the investor sustained as a
result of a violation of that provision by a person that is--
``(A) registered as, or required to be registered as, a
broker, dealer, investment adviser, municipal securities
dealer, municipal advisor, or transfer agent; or
``(B) associated with or, as of the date on which the
violation occurs, seeking to become associated with, an entity
described in subparagraph (A).
``(9) Limitations Periods.--
``(A) Disgorgement.--The Commission may bring a claim for
disgorgement under paragraph (7) not later than 5 years after
the date on which the person against which the claim is brought
receives any unjust enrichment as a result of the violation
that gives rise to the action or proceeding in which the
Commission seeks the claim.
``(B) Equitable remedies.--The Commission may seek a claim
for any equitable remedy, including for restitution under
paragraph (8), an injunction, or a bar, suspension, or cease
and desist order, not later than 10 years after the latest date
on which a violation that gives rise to the claim occurs.
``(C) Calculation.--For the purposes of calculating any
limitations period under this paragraph with respect to an
action or claim, any time in which the person against which the
action or claim, as applicable, is brought is outside of the
United States shall not count towards the accrual of that
period.
``(10) Rule of Construction.--Nothing in paragraph (7) or (8) may
be construed as altering any right that any private party may have to
maintain a suit for a violation of this Act.''.
(b) Applicability.--The amendments made by subsection (a) shall
apply with respect to any action or proceeding that is commenced on or
after the date of enactment of this Act.
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