Page:United States Statutes at Large Volume 104 Part 1.djvu/987

 PUBLIC LAW 101-429—OCT. 15, 1990 104 STAT. 953 limitations, suspension, or bar is in the public interest and that such person— "(i) has committed or omitted any act or omission enumerated in subparagraph (A), (D), or (E) of paragraph (4) of this subsection; "(ii) has been convicted of any offense specified in subparagraph (B) of such paragraph (4) within 10 years of the commencement of the proceedings under this paragraph; or "(iii) is enjoined from any action, conduct, or practice specified in subparagraph (C) of such paragraph (4). "(B) It shall be unlawful— "(i) for any person as to whom an order under subparagraph (A) is in effect, without the consent of the Commission, willfully to become, or to be, associated with a broker or dealer in contravention of such order, or to participate in an offering of penny stock in contravention of such order; "(ii) for any broker or dealer to permit such a person, without the consent of the Commission, to become or remain, a person Eissociated with the broker or dealer in contravention of such order, if such broker or dealer knew, or in the exercise of reasonable care should have known, of such order; or "(iii) for any broker or dealer to permit such a person, without the consent of the Commission, to participate in an offering of penny stock in contravention of such order, if such broker or dealer knew, or in the exercise of reasonable care should have known, of such order and of such participation. "(C) For purposes of this paragraph, the term 'person participating in an offering of penny stock includes any person acting as any promoter, finder, consultant, agent, or other person who engages in activities with a broker, dealer, or issuer for purposes of the issuance or trading in any penny stock, or inducing or attempting to induce the purchase or sale of any penny stock. The Commission may, by rule or regulation, define such term to include other activities, and may, by rule, regulation, or order, exempt any person or class of persons, in whole or in part, conditionally or unconditionally, from such term.". (b) RECOMMENDATIONS. —Within 6 months gifter the date of enact- 15 USC 78o note, ment of this Act, the Securities and Exchange Commission shall submit to each House of the Congress such recommendations as the Commission considers appropriate with respect to further revision of section 15(b)(6) of the Securities Exchange Act of 1934 (15 U.S.C. 78o(b)(6)). In preparing such recommendations, the Commission shall consider the desirability and effect of expanding the applicability of such section to any promoter, finder, consultant, agent or other person who engages in activities with a broker, dealer, or issuer for purposes of the issuance of or trading in, or inducing or attempting to induce the purchase or sale of, any security (and not just penny stock). SEC. 505. REQUIREMENTS FOR BROKERS AND DEALERS OF PENNY STOCKS. Section 15 of the Securities Exchange Act of 1934 (15 U.S.C. 78o) is amended by adding at the end thereof the following new subsection: " (g) REQUIREMENTS FOR TRANSACTIONS IN PENNY STOCKS. — "(1) IN GENERAL. — No broker or dealer shall make use of the -^ mails or any means or instrumentality of interstate commerce to effect any transaction in, or to induce or attempt to induce

�