Sens. Jack Reed, D-Rhode Island, and Chuck Grassley, R-Iowa, introduced legislation Thursday that gives the Securities and Exchange Commission the “firepower it needs” to crack down on Wall Street fraud and punish repeat offenders by levying heftier penalities.
The Stronger Enforcement of Civil Penalties Act (SEC Penalties Act) of 2015 increases the statutory limits on civil monetary penalties, directly linking the size of these penalties to the scope of harm and associated investor losses, and substantially raising the financial stakes for repeat securities law violators.
Under existing law, the SEC in some cases can only penalize individual violators a maximum of $160,000 per offense and institutions $775,000.
In other cases, the SEC may calculate penalties to equal the gross amount of ill-gotten gain, but only if the matter goes to federal court, not when the SEC handles a case administratively.
The SEC Penalties Act increases the per-violation cap applicable to the most serious securities laws violations to $1 million per violation for individuals and $10 million per violation for entities.