Page:United States Statutes at Large Volume 94 Part 2.djvu/578

 94 STAT. 1856

Ex parte order granting delay.

Delay, extension.

12 USC 3409. Subpena.

Notice.

Ante, p. 1855. Proceedings and records.

Annual tabulation; report to Congress. 12 USC 3401 note.

PUBLIC LAW 96-433—OCT. 10, 1980

"(ii) destruction of or tampering with evidence; "(iii) transfer of assets or records outside the territorial limits of the United States; "(iv) improper conversion of investor assets; or "(v) impeding the ability of the Commission to identify or trace the source or disposition of funds involved in any securities transaction; "(B) such financial records are necessary to identify or trace the record or beneficial ownership interest in any security; "(C) the acts, practices or course of conduct under investigation involve— "(i) the dissemination of materially false or misleading information concerning any security, issuer, or market, or the failure to make disclosures required under the securities laws, which remain uncorrected; or "(ii) a financial loss to investors or other persons protected under the securities laws which remains substantially uncompensated; or "(D) the acts, practices or course of conduct under investigation— "(i) involve significant financial speculation in securities; or "(ii) endanger the stability of any financial or investment intermediary. "(3) Any application under paragraph (2) for a delay in notice shall be made with reasonable specificity. "(4)(A) Upon a showing described in paragraph (2), the presiding judge or magistrate shall enter an ex parte order granting the requested delay for a period not to exceed ninety days and an order prohibiting the financial institution involved from disclosing that records have been obtained or that a request for records has been made. "(B) Extensions of the period of delay of notice provided in subparagraph (A) of up to ninety days each may be granted by the court upon application, but only in accordance with this subsection or section 1109(a), (b)(1), or (b)(2) of the Right to Financial Privacy Act of 1978. "(C) Upon expiration of the period of delay of notification ordered under subparagraph (A) or (B), the customer shall be served with or mailed a copy of the subpena insofar as it applies to the customer together with the following notice which shall describe with reasonable specificity the nature of the investigation for which the Commission sought the financial records: " 'Records or information concerning your transactions which are held by the financial institution named in the attached subpena were supplied to the Securities and Exchange Commission on (date). Notification was withheld pursuant to a determination by the (title of court so ordering) under section 21(h) of the Securities Exchange Act of 1934 that (state reason). The purpose of the investigation or official proceeding was (state purpose).'. "(5) Upon application by the Commission, all proceedings pursuant to paragraphs (2) and (4) shall be held in camera and the records thereof sealed until expiration of the period of delay or such other date as the presiding judge or magistrate may permit. "(6) The Commission shall compile an annual tabulation of the occasions on which the Commission used each separate subparagraph or clause of paragraph (2) of this subsection or the provisions of the Right to Financial Privacy Act of 1978 to obtain access to financial records of a customer and include it in its annual report to the

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