No official summary available for this bill.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 2920 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
1st Session
S. 2920
To enhance civil penalties under the Federal securities laws, and for
other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
September 19 (legislative day, September 16), 2025
Mr. Reed (for himself and Mr. Grassley) introduced the following bill;
which was read twice and referred to the Committee on Banking, Housing,
and Urban Affairs
_______________________________________________________________________
A BILL
To enhance civil penalties under the Federal securities laws, and for
other purposes.
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 ``Stronger Enforcement of Civil
Penalties Act of 2025''.
SEC. 2. UPDATED CIVIL MONEY PENALTIES FOR SECURITIES LAWS VIOLATIONS.
(a) Securities Act of 1933.--
(1) Money penalties in administrative actions.--Section
8A(g)(2) of the Securities Act of 1933 (15 U.S.C. 77h-1(g)(2))
is amended--
(A) in subparagraph (A)--
(i) by striking ``$7,500'' and inserting
``$10,000''; and
(ii) by striking ``$75,000'' and inserting
``$100,000'';
(B) in subparagraph (B)--
(i) by striking ``$75,000'' and inserting
``$100,000''; and
(ii) by striking ``$375,000'' and inserting
``$500,000''; and
(C) by striking subparagraph (C) and inserting the
following:
``(C) Third tier.--
``(i) In general.--Notwithstanding
subparagraphs (A) and (B), for a third tier act
or omission, the amount of penalty for each
such act or omission shall not exceed the
greater of--
``(I) $1,000,000 for a natural
person or $10,000,000 for any other
person;
``(II) 3 times the gross amount of
pecuniary gain to the person who
committed the act or omission; or
``(III) the amount of losses
incurred by victims as a result of the
act or omission.
``(ii) Third tier act or omission.--For the
purposes of this subparagraph, the term `third
tier act or omission' means an act or omission
described in paragraph (1) that--
``(I) involved fraud, deceit,
manipulation, or deliberate or reckless
disregard of a regulatory requirement;
and
``(II) directly or indirectly--
``(aa) resulted in
substantial losses to other
persons;
``(bb) created a
significant risk of substantial
losses to other persons; or
``(cc) resulted in
substantial pecuniary gain to
the person who committed the
act or omission.''.
(2) Money penalties in civil actions.--Section 20(d)(2) of
the Securities Act of 1933 (15 U.S.C. 77t(d)(2)) is amended--
(A) in subparagraph (A)--
(i) by striking ``$5,000'' and inserting
``$10,000''; and
(ii) by striking ``$50,000'' and inserting
``$100,000'';
(B) in subparagraph (B)--
(i) by striking ``$50,000'' and inserting
``$100,000''; and
(ii) by striking ``$250,000'' and inserting
``$500,000''; and
(C) by striking subparagraph (C) and inserting the
following:
``(C) Third tier.--
``(i) In general.--Notwithstanding
subparagraphs (A) and (B), for a third tier
violation, the amount of penalty for each such
violation shall not exceed the greater of--
``(I) $1,000,000 for a natural
person or $10,000,000 for any other
person;
``(II) 3 times the gross amount of
pecuniary gain to the person who
committed the violation; or
``(III) the amount of losses
incurred by victims as a result of the
violation.
``(ii) Third tier violation.--For the
purposes of this subparagraph, the term `third
tier violation' means a violation described in
paragraph (1) that--
``(I) involved fraud, deceit,
manipulation, or deliberate or reckless
disregard of a regulatory requirement;
and
``(II) directly or indirectly--
``(aa) resulted in
substantial losses to other
persons;
``(bb) created a
significant risk of substantial
losses to other persons; or
``(cc) resulted in
substantial pecuniary gain to
the person who committed the
violation.''.
(b) Securities Exchange Act of 1934.--
(1) Money penalties in civil actions.--Section 21(d)(3)(B)
of the Securities Exchange Act of 1934 (15 U.S.C. 78u(d)(3)(B))
is amended--
(A) in clause (i)--
(i) by striking ``$5,000'' and inserting
``$10,000''; and
(ii) by striking ``$50,000'' and inserting
``$100,000'';
(B) in clause (ii)--
(i) by striking ``$50,000'' and inserting
``$100,000''; and
(ii) by striking ``$250,000'' and inserting
``$500,000''; and
(C) by striking clause (iii) and inserting the
following:
``(iii) Third tier.--
``(I) In general.--Notwithstanding
clauses (i) and (ii), for a third tier
violation, the amount of penalty for
each such violation shall not exceed
the greater of--
``(aa) $1,000,000 for a
natural person or $10,000,000
for any other person;
``(bb) 3 times the gross
amount of pecuniary gain to the
person who committed the
violation; or
``(cc) the amount of losses
incurred by victims as a result
of the violation.
``(II) Third tier violation.--For
the purposes of this clause, the term
`third tier violation' means a
violation described in subparagraph (A)
that--
``(aa) involved fraud,
deceit, manipulation, or
deliberate or reckless
disregard of a regulatory
requirement; and
``(bb) directly or
indirectly--
``(AA) resulted in
substantial losses to
other persons;
``(BB) created a
significant risk of
substantial losses to
other persons; or
``(CC) resulted in
substantial pecuniary
gain to the person who
committed the
violation.''.
(2) Money penalties in administrative actions.--Section
21B(b) of the Securities Exchange Act of 1934 (15 U.S.C. 78u-
2(b)) is amended--
(A) in paragraph (1)--
(i) by striking ``$5,000'' and inserting
``$10,000''; and
(ii) by striking ``$50,000'' and inserting
``$100,000'';
(B) in paragraph (2)--
(i) by striking ``$50,000'' and inserting
``$100,000''; and
(ii) by striking ``$250,000'' and inserting
``$500,000''; and
(C) by striking paragraph (3) and inserting the
following:
``(3) Third tier.--
``(A) In general.--Notwithstanding paragraphs (1)
and (2), for a third tier act or omission, the amount
of penalty for each such act or omission shall not
exceed the greater of--
``(i) $1,000,000 for a natural person or
$10,000,000 for any other person;
``(ii) 3 times the gross amount of
pecuniary gain to the person who committed the
act or omission; or
``(iii) the amount of losses incurred by
victims as a result of the act or omission.
``(B) Third tier act or omission.--For the purposes
of this paragraph, the term `third tier act or
omission' means an act or omission described in
paragraph (1) that--
``(i) involved fraud, deceit, manipulation,
or deliberate or reckless disregard of a
regulatory requirement; and
``(ii) directly or indirectly--
``(I) resulted in substantial
losses to other persons;
``(II) created a significant risk
of substantial losses to other persons;
or
``(III) resulted in substantial
pecuniary gain to the person who
committed the act or omission.''.
(c) Investment Company Act of 1940.--
(1) Money penalties in administrative actions.--Section
9(d)(2) of the Investment Company Act of 1940 (15 U.S.C. 80a-
9(d)(2)) is amended--
(A) in subparagraph (A)--
(i) by striking ``$5,000'' and inserting
``$10,000''; and
(ii) by striking ``$50,000'' and inserting
``$100,000'';
(B) in subparagraph (B)--
(i) by striking ``$50,000'' and inserting
``$100,000''; and
(ii) by striking ``$250,000'' and inserting
``$500,000''; and
(C) by striking subparagraph (C) and inserting the
following:
``(C) Third tier.--
``(i) In general.--Notwithstanding
subparagraphs (A) and (B), for a third tier act
or omission, the amount of penalty for each
such act or omission shall not exceed the
greater of--
``(I) $1,000,000 for a natural
person or $10,000,000 for any other
person;
``(II) 3 times the gross amount of
pecuniary gain to the person who
committed the act or omission; or
``(III) the amount of losses
incurred by victims as a result of the
act or omission.
``(ii) Third tier act or omission.--For the
purposes of this subparagraph, the term `third
tier act or omission' means an act or omission
described in paragraph (1) that--
``(I) involved fraud, deceit,
manipulation, or deliberate or reckless
disregard of a regulatory requirement;
and
``(II) directly or indirectly--
``(aa) resulted in
substantial losses to other
persons;
``(bb) created a
significant risk of substantial
losses to other persons; or
``(cc) resulted in
substantial pecuniary gain to
the person who committed the
act or omission.''.
(2) Money penalties in civil actions.--Section 42(e)(2) of
the Investment Company Act of 1940 (15 U.S.C. 80a-41(e)(2)) is
amended--
(A) in subparagraph (A)--
(i) by striking ``$5,000'' and inserting
``$10,000''; and
(ii) by striking ``$50,000'' and inserting
``$100,000'';
(B) in subparagraph (B)--
(i) by striking ``$50,000'' and inserting
``$100,000''; and
(ii) by striking ``$250,000'' and inserting
``$500,000''; and
(C) by striking subparagraph (C) and inserting the
following:
``(C) Third tier.--
``(i) In general.--Notwithstanding
subparagraphs (A) and (B), for a third tier
violation, the amount of penalty for each such
violation shall not exceed the greater of--
``(I) $1,000,000 for a natural
person or $10,000,000 for any other
person;
``(II) 3 times the gross amount of
pecuniary gain to the person who
committed the violation; or
``(III) the amount of losses
incurred by victims as a result of the
violation.
``(ii) Third tier violation.--For the
purposes of this subparagraph, the term `third
tier violation' means a violation described in
paragraph (1) that--
``(I) involved fraud, deceit,
manipulation, or deliberate or reckless
disregard of a regulatory requirement;
and
``(II) directly or indirectly--
``(aa) resulted in
substantial losses to other
persons;
``(bb) created a
significant risk of substantial
losses to other persons; or
``(cc) resulted in
substantial pecuniary gain to
the person who committed the
violation.''.
(d) Investment Advisers Act of 1940.--
(1) Money penalties in administrative actions.--Section
203(i)(2) of the Investment Advisers Act of 1940 (15 U.S.C.
80b-3(i)(2)) is amended--
(A) in subparagraph (A)--
(i) by striking ``$5,000'' and inserting
``$10,000''; and
(ii) by striking ``$50,000'' and inserting
``$100,000'';
(B) in subparagraph (B)--
(i) by striking ``$50,000'' and inserting
``$100,000''; and
(ii) by striking ``$250,000'' and inserting
``$500,000''; and
(C) by striking subparagraph (C) and inserting the
following:
``(C) Third tier.--
``(i) In general.--Notwithstanding
subparagraphs (A) and (B), for a third tier act
or omission, the amount of penalty for each
such act or omission shall not exceed the
greater of--
``(I) $1,000,000 for a natural
person or $10,000,000 for any other
person;
``(II) 3 times the gross amount of
pecuniary gain to the person who
committed the act or omission; or
``(III) the amount of losses
incurred by victims as a result of the
act or omission.
``(ii) Third tier act or omission.--For the
purposes of this subparagraph, the term `third
tier act or omission' means an act or omission
described in paragraph (1) that--
``(I) involved fraud, deceit,
manipulation, or deliberate or reckless
disregard of a regulatory requirement;
and
``(II) directly or indirectly--
``(aa) resulted in
substantial losses to other
persons;
``(bb) created a
significant risk of substantial
losses to other persons; or
``(cc) resulted in
substantial pecuniary gain to
the person who committed the
act or omission.''.
(2) Money penalties in civil actions.--Section 209(e)(2) of
the Investment Advisers Act of 1940 (15 U.S.C. 80b-9(e)(2)) is
amended--
(A) in subparagraph (A)--
(i) by striking ``$5,000'' and inserting
``$10,000''; and
(ii) by striking ``$50,000'' and inserting
``$100,000'';
(B) in subparagraph (B)--
(i) by striking ``$50,000'' and inserting
``$100,000''; and
(ii) by striking ``$250,000'' and inserting
``$500,000''; and
(C) by striking subparagraph (C) and inserting the
following:
``(C) Third tier.--
``(i) In general.--Notwithstanding
subparagraphs (A) and (B), for a third tier
violation, the amount of penalty for each such
violation shall not exceed the greater of--
``(I) $1,000,000 for a natural
person or $10,000,000 for any other
person;
``(II) 3 times the gross amount of
pecuniary gain to the person who
committed the violation; or
``(III) the amount of losses
incurred by victims as a result of the
violation.
``(ii) Third tier violation.--For the
purposes of this subparagraph, the term `third
tier violation' means a violation described in
paragraph (1) that--
``(I) involved fraud, deceit,
manipulation, or deliberate or reckless
disregard of a regulatory requirement;
and
``(II) directly or indirectly--
``(aa) resulted in
substantial losses to other
persons;
``(bb) created a
significant risk of substantial
losses to other persons; or
``(cc) resulted in
substantial pecuniary gain to
the person who committed the
violation.''.
SEC. 3. PENALTIES FOR RECIDIVISTS.
(a) Securities Act of 1933.--
(1) Cease-and-desist proceedings.--Section 8A(g)(2) of the
Securities Act of 1933 (15 U.S.C. 77h-1(g)(2)) is amended by
adding at the end the following:
``(D) Fourth tier.--Notwithstanding subparagraphs
(A), (B), and (C), the maximum amount of penalty for
each such act or omission shall be 3 times the
otherwise applicable amount in such subparagraphs if,
within the 5-year period preceding such act or
omission, the person who committed the act or omission
was criminally convicted for securities fraud or became
subject to a judgment or order imposing monetary,
equitable, or administrative relief in any Commission
action alleging fraud by that person.''.
(2) Injunctions and prosecution of offenses.--Section
20(d)(2) of the Securities Act of 1933 (15 U.S.C. 77t(d)(2)) is
amended by adding at the end the following:
``(D) Fourth tier.--Notwithstanding subparagraphs
(A), (B), and (C), the maximum amount of penalty for
each such violation shall be 3 times the otherwise
applicable amount in such subparagraphs if, within the
5-year period preceding such violation, the defendant
was criminally convicted for securities fraud or became
subject to a judgment or order imposing monetary,
equitable, or administrative relief in any Commission
action alleging fraud by that defendant.''.
(b) Securities Exchange Act of 1934.--
(1) Civil actions.--Section 21(d)(3)(B) of the Securities
Exchange Act of 1934 (15 U.S.C. 78u(d)(3)(B)) is amended by
adding at the end the following:
``(iv) Fourth tier.--Notwithstanding clauses (i),
(ii), and (iii), the maximum amount of penalty for each
such violation shall be 3 times the otherwise
applicable amount in such clauses if, within the 5-year
period preceding such violation, the defendant was
criminally convicted for securities fraud or became
subject to a judgment or order imposing monetary,
equitable, or administrative relief in any Commission
action alleging fraud by that defendant.''.
(2) Administrative proceedings.--Section 21B(b) of the
Securities Exchange Act of 1934 (15 U.S.C. 78u-2(b)) is amended
by adding at the end the following:
``(4) Fourth tier.--Notwithstanding paragraphs (1), (2),
and (3), the maximum amount of penalty for each such act or
omission shall be 3 times the otherwise applicable amount in
such paragraphs if, within the 5-year period preceding such act
or omission, the person who committed the act or omission was
criminally convicted for securities fraud or became subject to
a judgment or order imposing monetary, equitable, or
administrative relief in any Commission action alleging fraud
by that person.''.
(c) Investment Company Act of 1940.--
(1) Ineligibility of certain underwriters and affiliates.--
Section 9(d)(2) of the Investment Company Act of 1940 (15
U.S.C. 80a-9(d)(2)) is amended by adding at the end the
following:
``(D) Fourth tier.--Notwithstanding subparagraphs
(A), (B), and (C), the maximum amount of penalty for
each such act or omission shall be 3 times the
otherwise applicable amount in such subparagraphs if,
within the 5-year period preceding such act or
omission, the person who committed the act or omission
was criminally convicted for securities fraud or became
subject to a judgment or order imposing monetary,
equitable, or administrative relief in any Commission
action alleging fraud by that person.''.
(2) Enforcement.--Section 42(e)(2) of the Investment
Company Act of 1940 (15 U.S.C. 80a-41(e)(2)) is amended by
adding at the end the following:
``(D) Fourth tier.--Notwithstanding subparagraphs
(A), (B), and (C), the maximum amount of penalty for
each such violation shall be 3 times the otherwise
applicable amount in such subparagraphs if, within the
5-year period preceding such violation, the defendant
was criminally convicted for securities fraud or became
subject to a judgment or order imposing monetary,
equitable, or administrative relief in any Commission
action alleging fraud by that defendant.''.
(d) Investment Advisers Act of 1940.--The Investment Advisers Act
of 1940 (15 U.S.C. 80b-1 et seq.) is amended--
(1) in section 203(i)(2) (15 U.S.C. 80b-3(i)(2)), by adding
at the end the following:
``(D) Fourth tier.--Notwithstanding subparagraphs
(A), (B), and (C), the maximum amount of penalty for
each such act or omission shall be 3 times the
otherwise applicable amount in such subparagraphs if,
within the 5-year period preceding such act or
omission, the person who committed the act or omission
was criminally convicted for securities fraud or became
subject to a judgment or order imposing monetary,
equitable, or administrative relief in any Commission
action alleging fraud by that person.''; and
(2) in section 209(e)(2) (15 U.S.C. 80b-9(e)(2)) by adding
at the end the following:
``(D) Fourth tier.--Notwithstanding subparagraphs
(A), (B), and (C), the maximum amount of penalty for
each such violation shall be 3 times the otherwise
applicable amount in such subparagraphs if, within the
5-year period preceding such violation, the defendant
was criminally convicted for securities fraud or became
subject to a judgment or order imposing monetary,
equitable, or administrative relief in any Commission
action alleging fraud by that defendant.''.
SEC. 4. VIOLATIONS OF INJUNCTIONS AND BARS.
(a) Securities Act of 1933.--Section 20(d) of the Securities Act of
1933 (15 U.S.C. 77t(d)) is amended--
(1) in paragraph (1), by inserting after ``the rules or
regulations thereunder,'' the following: ``a Federal court
injunction or a bar obtained or entered by the Commission under
this title,''; and
(2) by striking paragraph (4) and inserting the following:
``(4) Special provisions relating to a violation of an
injunction or certain orders.--
``(A) In general.--Each separate violation of an
injunction or order described in subparagraph (B) shall
be a separate offense, except that in the case of a
violation through a continuing failure to comply with
such injunction or order, each day of the failure to
comply with the injunction or order shall be deemed a
separate offense.
``(B) Injunctions and orders.--Subparagraph (A)
shall apply with respect to any action to enforce--
``(i) a Federal court injunction obtained
pursuant to this title;
``(ii) an order entered or obtained by the
Commission pursuant to this title that bars,
suspends, places limitations on the activities
or functions of, or prohibits the activities of
a person; or
``(iii) a cease-and-desist order entered by
the Commission pursuant to section 8A.''.
(b) Securities Exchange Act of 1934.--Section 21(d)(3) of the
Securities Exchange Act of 1934 (15 U.S.C. 78u(d)(3)) is amended--
(1) in subparagraph (A), by inserting after ``the rules or
regulations thereunder,'' the following: ``a Federal court
injunction or a bar obtained or entered by the Commission under
this title,''; and
(2) by striking subparagraph (D) and inserting the
following:
``(D) Special provisions relating to a violation of an
injunction or certain orders.--
``(i) In general.--Each separate violation of an
injunction or order described in clause (ii) shall be a
separate offense, except that in the case of a
violation through a continuing failure to comply with
such injunction or order, each day of the failure to
comply with the injunction or order shall be deemed a
separate offense.
``(ii) Injunctions and orders.--Clause (i) shall
apply with respect to an action to enforce--
``(I) a Federal court injunction obtained
pursuant to this title;
``(II) an order entered or obtained by the
Commission pursuant to this title that bars,
suspends, places limitations on the activities
or functions of, or prohibits the activities of
a person; or
``(III) a cease-and-desist order entered by
the Commission pursuant to section 21C.''.
(c) Investment Company Act of 1940.--Section 42(e) of the
Investment Company Act of 1940 (15 U.S.C. 80a-41(e)) is amended--
(1) in paragraph (1), by inserting after ``the rules or
regulations thereunder,'' the following: ``a Federal court
injunction or a bar obtained or entered by the Commission under
this title,''; and
(2) by striking paragraph (4) and inserting the following:
``(4) Special provisions relating to a violation of an
injunction or certain orders.--
``(A) In general.--Each separate violation of an
injunction or order described in subparagraph (B) shall
be a separate offense, except that in the case of a
violation through a continuing failure to comply with
such injunction or order, each day of the failure to
comply with the injunction or order shall be deemed a
separate offense.
``(B) Injunctions and orders.--Subparagraph (A)
shall apply with respect to any action to enforce--
``(i) a Federal court injunction obtained
pursuant to this title;
``(ii) an order entered or obtained by the
Commission pursuant to this title that bars,
suspends, places limitations on the activities
or functions of, or prohibits the activities of
a person; or
``(iii) a cease-and-desist order entered by
the Commission pursuant to section 9(f).''.
(d) Investment Advisers Act of 1940.--Section 209(e) of the
Investment Advisers Act of 1940 (15 U.S.C. 80b-9(e)) is amended--
(1) in paragraph (1), by inserting after ``the rules or
regulations thereunder,'' the following: ``a Federal court
injunction or a bar obtained or entered by the Commission under
this title,''; and
(2) by striking paragraph (4) and inserting the following:
``(4) Special provisions relating to a violation of an
injunction or certain orders.--
``(A) In general.--Each separate violation of an
injunction or order described in subparagraph (B) shall
be a separate offense, except that in the case of a
violation through a continuing failure to comply with
such injunction or order, each day of the failure to
comply with the injunction or order shall be deemed a
separate offense.
``(B) Injunctions and orders.--Subparagraph (A)
shall apply with respect to any action to enforce--
``(i) a Federal court injunction obtained
pursuant to this title;
``(ii) an order entered or obtained by the
Commission pursuant to this title that bars,
suspends, places limitations on the activities
or functions of, or prohibits the activities of
a person; or
``(iii) a cease-and-desist order entered by
the Commission pursuant to section 203(k).''.
<all>
Introduced in Senate
Read twice and referred to the Committee on Banking, Housing, and Urban Affairs. (Sponsor introductory remarks on measure: CR S6793-6794)
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