Bill Details
HR.216 - 119th Congress
Status
Latest action
2025-01-07 - Referred to the House Committee on Financial Services.
Introduced Date
2025-01-07
Policy Area
Finance and Financial Sector
Committees
View committees (1)
Sponsors
8
0
0
AI Summary This summary was generated by AI from the bill text. AI can get information wrong.
This bill would change how regulators count violations of federal securities laws when deciding penalties. It says that if several acts of noncompliance are really part of the same problem, they should be treated as one violation instead of many. That would apply when the actions come from the same or closely related cause, involve the same false statement or missing information, or are part of an ongoing failure to follow the rules. The bill covers major securities laws that govern public offerings, stock markets, investment companies, and investment advisers.
- It applies to the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Company Act of 1940, and the Investment Advisers Act of 1940.
- For penalty purposes, related acts of noncompliance would be counted as one violation if they come from a common cause or a substantially overlapping cause.
- It also treats repeated problems tied to the same misstatement, omission, or ongoing failure to comply as a single violation.
- The goal is to make penalty counting more consistent and to avoid stacking many penalties on the same underlying mistake or compliance failure.
Official Summaries
Securities Enforcement Clarity Act of 2025 or the SEC Act of 2025
This bill specifies when separate occurrences of securities law violations must be considered as a single violation for purposes of calculating penalties. Specifically, separate occurrences must be counted as a single violation when the acts in question are the result of (1) a common or a substantially overlapping cause, (2) the same misstatement or omission, or (3) a continuing failure to comply.
The bill applies to various violations of securities law, including those involving the registration, offer, and sale of securities; and the conduct of brokers, dealers, and investment advisers.
Current Full Text
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 216 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 216
To amend the Securities Act of 1933, the Securities Exchange Act of
1934, the Investment Company Act of 1940, and the Investment Advisors
Act of 1940 with respect to the determination of violations.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 7, 2025
Mr. Sessions introduced the following bill; which was referred to the
Committee on Financial Services
_______________________________________________________________________
A BILL
To amend the Securities Act of 1933, the Securities Exchange Act of
1934, the Investment Company Act of 1940, and the Investment Advisors
Act of 1940 with respect to the determination of violations.
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 ``Securities Enforcement Clarity Act
of 2025'' or the ``SEC Act of 2025''.
SEC. 2. DETERMINATION OF THE NUMBER OF VIOLATIONS.
(a) Securities Act of 1933.--The Securities Act of 1933 is
amended--
(1) in section 8A(g) (15 U.S.C. 77h-1(g)), by adding at the
end the following:
``(4) Determination of number of violations.--For purposes
of determining the number of violations for which to impose
penalties under paragraph (1), separate acts of noncompliance
are a single violation when the acts are the result of--
``(A) a common or a substantially overlapping
originating cause;
``(B) the same misstatement or omission; or
``(C) a continuing failure to comply.''; and
(2) in section 20(d) (15 U.S.C. 77t(d)), by adding at the
end the following:
``(5) Determination of number of violations.--For purposes
of determining the number of violations for which to impose
penalties under paragraph (1), separate acts of noncompliance
are a single violation when the acts are the result of--
``(A) a common or a substantially overlapping
originating cause;
``(B) the same misstatement or omission; or
``(C) a continuing failure to comply.''.
(b) Securities Exchange Act of 1934.--The Securities Exchange Act
of 1934 is amended--
(1) in section 21(d)(3) (15 U.S.C. 78u(d)(3)), by adding at
the end the following:
``(E) Determination of number of violations.--For purposes
of determining the number of violations for which to impose
penalties under subparagraph (A)(i), separate acts of
noncompliance are a single violation when the acts are the
result of--
``(i) a common or a substantially overlapping
originating cause;
``(ii) the same misstatement or omission; or
``(iii) a continuing failure to comply.'';
(2) in section 21B(a) (15 U.S.C. 78u-2(b)), by adding at
the end the following:
``(3) Determination of number of violations, acts, or
omissions.--For purposes of determining the number of
violations, acts, or omissions for which to impose penalties
under this subsection, separate acts of noncompliance are a
single violation, act, or omission when the acts are the result
of--
``(A) a common or a substantially overlapping
originating cause;
``(B) the same misstatement or omission; or
``(C) a continuing failure to comply.''; and
(3) in section 32 (15 U.S.C. 78ff), by adding at the end
the following:
``(d) Determination of Number of Violations.--For purposes of
determining the number of violations for which to impose penalties
under subsection (c), separate acts of noncompliance are a single
violation when the acts are the result of--
``(1) a common or a substantially overlapping originating
cause;
``(2) the same misstatement or omission; or
``(3) a continuing failure to comply.''.
(c) Investment Company Act of 1940.--The Investment Company Act of
1940 is amended--
(1) in section 9(d) (15 U.S.C. 80a-9(d)), by adding at the
end the following:
``(5) Determination of number of violations, acts, or
omissions.--For purposes of determining the number of
violations, acts, or omissions for which to impose penalties
under paragraph (1), separate acts of noncompliance are a
single violation, act, or omission when the acts are the result
of--
``(A) a common or a substantially overlapping
originating cause;
``(B) the same misstatement or omission; or
``(C) a continuing failure to comply.''; and
(2) in section 42(e) (15 U.S.C. 80a-41(e)), by adding at
the end the following:
``(5) Determination of number of violations.--For purposes
of determining the number of violations for which to impose
penalties under paragraph (1), separate acts of noncompliance
are a single violation when the acts are the result of--
``(A) a common or a substantially overlapping
originating cause;
``(B) the same misstatement or omission; or
``(C) a continuing failure to comply.''.
(d) Investment Advisors Act of 1940.--The Investment Advisers Act
of 1940 is amended--
(1) in section 203(i) (15 U.S.C. 80b-3(i)), by adding at
the end the following:
``(5) Determination of number of violations, acts, or
omissions.--For purposes of determining the number of
violations, acts, or omissions for which to impose penalties
under paragraph (1), separate acts of noncompliance are a
single violation, act, or omission when the acts are the result
of--
``(A) a common or a substantially overlapping
originating cause;
``(B) the same misstatement or omission; or
``(C) a continuing failure to comply.''; and
(2) in section 209(e) (15 U.S.C. 80b-9(e)), by adding at
the end the following:
``(5) Determination of number of violations.--For purposes
of determining the number of violations for which to impose
penalties under paragraph (1), separate acts of noncompliance
are a single violation when the acts are the result of--
``(A) a common or a substantially overlapping
originating cause;
``(B) the same misstatement or omission; or
``(C) a continuing failure to comply.''.
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