Page:United States Statutes at Large Volume 102 Part 5.djvu/671

 PUBLIC LAW 100-704—NOV. 19, 1988

102 STAT. 4677

Public Law 100-•704 100th Congress An Act To improve the procedures and remedies for the prevention of insider trading, 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 "Insider Trading and Securities Fraud Enforcement Act of 1988". SEC. 2. FINDINGS.

The Congress finds that— (1) the rules and r^ulations of the Securities and Exchange Commission under the Securities Exchange Act of 1934 governing trading while in possession of material, nonpublic information are, as required by such Act, necessary and appropriate in the public interest and for the protection of investors; (2) the Commission has, within the limits of accepted administrative and judicial construction of such rules and regulations, enforced such rules and regulations vigorously, effectively, and fairly; and (3) nonetheless, additional methods are appropriate to deter and prosecute violations of such rules and regulations.

Nov. 19, 1988 [H.R. 5133] Insider Trading and Securities Fraud Enforcement Act of 1988. 15 USC 78a note. 15 USC 78u-l note.

SEC. 3. CIVIL PENALTIES OF CONTROLLING PERSONS FOR ILLEGAL INSIDER TRADING BY CONTROLLED PERSONS.

(a) AMENDMENT.—The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended— (1) in section 21(d)— (A) by striking out paragraph (2); and (B) by redesignating subsection (d)(1) as subsection (d); and (2) by inserting after section 21 the following new section:

15 USC 78u.

" C IV I L PENALTIES

"SEC. 21A. (a) AUTHORITY TO IMPOSE CIVIL PENALTIES.— "(1) JUDICIAL ACTIONS BY COMMISSION AUTHORIZED.—Whenever

it shall appear to the Commission that any person has violated any provision of this title or the rules or regulations thereunder by purchasing or selling a security while in possession of material, nonpublic information in, or has violated any such provision by communicating such information in connection with, a transaction on or through the facilities of a national securities exchange or from or through a broker or dealer, and which is not part of a public offering by an issuer of securities other than standardized options, the (Commission— "(A) may bring an action in a United States district court to seek, and the court shall have jurisdiction to impose, a

15 USC 78u-l.

eourts, U.S.

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