§ 80a–41. Enforcement of subchapter

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The Commission may make such investigations as it deems necessary to determine whether any person has violated or is about to violate any provision of this subchapter or of any rule, regulation, or order hereunder, or to determine whether any action in any court or any proceeding before the Commission shall be instituted under this subchapter against a particular person or persons, or with respect to a particular transaction or transactions. The Commission shall permit any person to file with it a statement in writing, under oath or otherwise as the Commission shall determine, as to all the facts and circumstances concerning the matter to be investigated.

For the purpose of any investigation or any other 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.

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; 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.

Whenever it shall appear to the Commission that any person has 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, 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 or is about to engage in any such act or practice, a permanent or temporary injunction or decree or restraining order shall be granted without bond. In any proceeding under this subsection to enforce compliance with section 80a–7 of this title , the court as a court of equity may, to the extent it deems necessary or appropriate, take exclusive jurisdiction and possession of the investment company or companies involved and the books, records, and assets thereof, wherever located; and the court shall have jurisdiction to appoint a trustee, who with the approval of the court shall have power to dispose of any or all of such assets, subject to such terms and conditions as the court may prescribe.

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. 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 80a–9(f) 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.

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. 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. 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— the violation described in paragraph

(1)involved fraud, deceit, manipulation, or deliberate or reckless disregard of a regulatory requirement; and such violation directly or indirectly resulted in substantial losses or created a significant risk of substantial losses to other persons. 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 and section 78u–6 of this title . 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. 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. For purposes of section 80a–43 of this title , actions under this paragraph shall be actions to enforce a liability or a duty created by this subchapter. In an action to enforce a cease-and-desist order entered by the Commission pursuant to section 80a–9(f) 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. ( Aug. 22, 1940, ch. 686 , title I, § 42, 54 Stat. 842 ; Pub. L. 91–452, title II, § 215 , Oct. 15, 1970 , 84 Stat. 929 ; Pub. L. 100–181, title VI, § 623 , Dec. 4, 1987 , 101 Stat. 1262 ; Pub. L. 101–429, title III, § 302 , Oct. 15, 1990 , 104 Stat. 945 ; Pub. L. 107–204, title III, § 308(d)(4) , July 30, 2002 , 116 Stat. 785 ; Pub. L. 111–203, title IX, § 923(a)(2) , July 21, 2010 , 124 Stat. 1849 .)

Connections39 cite this

Cited by 39 sections · top 25

U.S. Code

§ 78u
Investigations and actions

CFR

statutes-at-large

Public Law 107–204
To protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws, and for other purposes

12 references not yet in our index

54 Stat. 842
Pub. L. 91-452
84 Stat. 929
Pub. L. 100-181
101 Stat. 1262
Pub. L. 101-429
104 Stat. 945
Pub. L. 107-204
116 Stat. 785
Pub. L. 111-203
124 Stat. 1849
64 Stat. 1265

Citation graph

cites case law

§ 80a–41

Enforcement of subchapter

Fed. Reg.×29

C.F.R.×8

Stat.×1

U.S.C.×1

Stat.54 Stat. 842

Pub. L.Pub. L. 91-452

Stat.84 Stat. 929

Pub. L.Pub. L. 100-181

Stat.101 Stat. 1262

Cites 12 · showing 5Cited by 39 across 4 sources