New Bill Seeks to Increase SEC Penalties for Securities Fraud

by Wall Street Fraud on August 3, 2012

Philadelphia securities fraud lawyerIn good news for investors, two U.S. senators have proposed a bill that would allow the Securities and Exchange Commission to levy stiffer fines on individuals and firms that violate securities laws. The Stronger Enforcement of Civil Penalties Act (SEC Penalties Act) of 2012 would also allow the SEC to tie the size of the penalties to the losses suffered by defrauded investors.

The bill, introduced by Sens. Jack Reed and Chuck Grassley, would increase the per-offense financial penalty cap for the most serious securities laws violations to $1 million per violation for individuals, and $10 million per violation for firms. The current limits are $150,000 and $725,000, respectively. The bill would also increase the cap for repeat offenders in an effort to deter firms from viewing fines for securities violations as simply the cost of doing business.

“In order to protect taxpayers and investors, we need tougher anti-fraud laws and forceful oversight of Wall Street. Some of these institutions that are ‘too big to fail’ have also become ‘too big to care,’” said Reed, who chairs the Senate Banking Subcommittee on Securities, Insurance, and Investment.

“If they look at the bottom line and see they can break the law, get caught, pay a nominal fine, and still profit, the cycle of misconduct will continue. The law needs to change to ensure the punishment fits the crime. This bill gives the SEC more tools to demand meaningful accountability from Wall Street. I am pleased to be joined by Senator Grassley in this bipartisan effort to enhance the SEC’s ability to protect investors and crack down on fraud,” he added.

Source: AccountingToday.com

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