EHF19167 S.L.C.
116
TH
CONGRESS 1
ST
S
ESSION
S.
ll
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
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Mr. W
ARNER
(for himself and Mr. K
ENNEDY
) introduced the following bill; which was read twice and referred to the Committee on
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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 limita-tions for disgorgement and equitable actions brought by the Commission, and for other purposes.
Be it enacted by the Senate and House of Representa-
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tives of the United States of America in Congress assembled,
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SECTION 1. SHORT TITLE.
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This Act may be cited as the ‘‘Securities Fraud En-
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forcement and Investor Compensation Act of 2019’’.
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EHF19167 S.L.C.
SEC. 2. INVESTIGATIONS AND PROSECUTION OF OFFENSES
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FOR VIOLATIONS OF THE SECURITIES LAWS.
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(a) I
N
G
ENERAL
.—Section 21(d) of the Securities
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Exchange Act of 1934 (15 U.S.C. 78u(d)) is amended—
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(1) in paragraph (3)—
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(A) in the paragraph heading—
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(i) by inserting ‘‘C
IVIL
’’ before
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‘‘M
ONEY PENALTIES
’’; and
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(ii) by striking ‘‘
IN CIVIL ACTIONS
’’
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and inserting ‘‘
AND AUTHORITY TO SEEK
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DISGORGEMENT
’’;
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(B) in subparagraph (A), by striking ‘‘ju-
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risdiction to impose’’ and all that follows
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through the period at the end and inserting the
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following: ‘‘jurisdiction to—
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‘‘(i) impose, upon a proper showing, a civil
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penalty to be paid by the person who committed
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such violation; and
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‘‘(ii) require disgorgement under para-
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graph (7) by the person who received any un-
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just enrichment as a result of such violation.’’;
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and
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(C) in subparagraph (B)—
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(i) in clause (i), in the first sentence,
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by striking ‘‘the penalty’’ and inserting ‘‘a
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EHF19167 S.L.C.
civil penalty imposed under subparagraph
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(A)(i)’’;
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(ii) in clause (ii), by striking ‘‘amount
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of penalty’’ and inserting ‘‘amount of a
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civil penalty imposed under subparagraph
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(A)(i)’’; and
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(iii) in clause (iii), in the matter pre-
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ceding item (aa), by striking ‘‘amount of
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penalty for each such violation’’ and insert-
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ing ‘‘amount of a civil penalty imposed
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under subparagraph (A)(i) for each viola-
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tion described in that subparagraph’’;
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(2) in paragraph (4), by inserting ‘‘under para-
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graph (7)’’ after ‘‘funds disgorged’’; and
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(3) by adding at the end the following:
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‘‘(7) D
ISGORGEMENT
.—
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‘‘(A) I
N GENERAL
.—In any action or pro-
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ceeding brought by the Commission under any provi-
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sion of the securities laws, the Commission may
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seek, and any Federal court may order,
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disgorgement of any unjust enrichment that a per-
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son obtained as a result of a violation of that provi-
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sion.
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‘‘(B) C
ALCULATION
.—Any disgorgement that is
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ordered with respect to a person under subpara-
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