U.S. Code
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Title 15
» Chapter CHAPTER 98— PUBLIC COMPANY ACCOUNTING REFORM AND CORPORATE RESPONSIBILITY › Subchapter SUBCHAPTER III— CORPORATE RESPONSIBILITY
15 U.S.C. § 7246
Fair funds for investors
(a) Civil penalties to be used for the relief of victimsIf, in any judicial or administrative action brought by the Commission under the securities laws, the Commission obtains a civil penalty against any person for a violation of such laws, or such person agrees, in settlement of any such action, to such civil penalty, the amount of such civil penalty shall, on the motion or at the direction of the Commission, be added to and become part of a disgorgement fund or other fund established for the benefit of the victims of such violation.
(b) Acceptance of additional donationsThe Commission is authorized to accept, hold, administer, and utilize gifts, bequests and devises of property, both real and personal, to the United States for a disgorgement fund or other fund described in subsection (a). Such gifts, bequests, and devises of money and proceeds from sales of other property received as gifts, bequests, or devises shall be deposited in such fund and shall be available for allocation in accordance with subsection (a).
(c) Study required(1) Subject of studyThe Commission shall review and analyze—(A) enforcement actions by the Commission over the five years preceding July 30, 2002, that have included proceedings to obtain civil penalties or disgorgements to identify areas where such proceedings may be utilized to efficiently, effectively, and fairly provide restitution for injured investors; and(B) other methods to more efficiently, effectively, and fairly provide restitution to injured investors, including methods to improve the collection rates for civil penalties and disgorgements.(2) Report requiredThe Commission shall report its findings to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate within 180 days after of 11 So in original. The word “of” probably should not appear. July 30, 2002, and shall use such findings to revise its rules and regulations as necessary. The report shall include a discussion of regulatory or legislative actions that are recommended or that may be necessary to address concerns identified in the study.
(Pub. L. 107–204, title III, § 308, July 30, 2002, 116 Stat. 784; Pub. L. 111–203, title IX, § 929B, July 21, 2010, 124 Stat. 1852.)Editorial NotesCodificationSection is comprised of section 308 of Pub. L. 107–204. Subsec. (d) of section 308 of Pub. L. 107–204 amended sections 77t, 78u, 78u–1, 80a–41, and 80b–9 of this title.
Amendments2010—Subsec. (a). Pub. L. 111–203, § 929B(1), added subsec. (a) and struck out former subsec. (a). Prior to amendment, text read as follows: “If in any judicial or administrative action brought by the Commission under the securities laws (as such term is defined in section 78c(a)(47) of this title) the Commission obtains an order requiring disgorgement against any person for a violation of such laws or the rules or regulations thereunder, or such person agrees in settlement of any such action to such disgorgement, and the Commission also obtains pursuant to such laws a civil penalty against such person, the amount of such civil penalty shall, on the motion or at the direction of the Commission, be added to and become part of the disgorgement fund for the benefit of the victims of such violation.”
Subsec. (b). Pub. L. 111–203, § 929B(2), substituted “for a disgorgement fund or other fund described in subsection (a)” for “for a disgorgement fund described in subsection (a)” and “in such fund” for “in the disgorgement fund”.
Subsec. (e). Pub. L. 111–203, § 929B(3), struck out subsec. (e). Text read as follows: “As used in this section, the term ‘disgorgement fund’ means a fund established in any administrative or judicial proceeding described in subsection (a) of this section.”
Statutory Notes and Related SubsidiariesEffective Date of 2010 AmendmentAmendment by Pub. L. 111–203 effective 1 day after July 21, 2010, except as otherwise provided, see section 4 of Pub. L. 111–203, set out as an Effective Date note under section 5301 of Title 12, Banks and Banking.
Notes of Decisions
Marilyn Keepseagle v. Sonny Perdue, 856 F.3d 1039 (D.C. Cir. 2017).
· cites it 2× “§ 5219a (Home Affordable Modification Program, created by the Emergency Economic Stabilization Act of 2008 in response to the subprime mortgage crisis); 15 U.S.C. § 7246 (a) (creating the “Fair Fund” established by the Sarbanes-Oxley Act of 2002 to distribute disgorgement…”
SEC v. Jarkesy, 603 U.S. 109 (2024).
“Although the SEC can choose to compensate in- jured shareholders from the civil penalties it collects, see 15 U. S. C. § 7246 (a), it admits that it is not required to do so, see App.”
SEC v. GenAudio Inc., 32 F.4th 902 (10th Cir. 2022).
“The district court also established a Fair Fund pursuant to 15 U.S.C. § 7246 (a). Further, the district court enjoined Appellants from further violations of the securities laws, and permanently barred Mr.”
Sec. & Exch. Comm'n v. DiBella, 409 F. Supp. 2d 122 (D. Conn. 2006).
· cites it 2× “15 U.S.C. § 7246 (a). Also in section 308, Congress requires the SEC to conduct a study of SEC enforcement actions brought during the five years preceding the enactment of the Sarbanes-Oxley Act where civil penalties and/or disgorgement orders were sought to determine the…”
Sec. & Exch. Comm'n v. Byers, 637 F. Supp. 2d 166 (S.D.N.Y. 2009).
“745 , 784 (2002) (codified at 15 U.S.C. § 7246 (a)). The Second Circuit held, however, that the same "fair and reasonable” standard applies to SEC-proposed distribution plans as to receivership cases, and the court cited receivership cases in its decision.”
United States Sec. & Exch. Comm'n v. Henke, 275 F. Supp. 2d 1075 (N.D. Cal. 2003).
· cites it 2× “35 Pursuant to Section 308 of the Sar-banes-Oxley Act of 2002, Pub L No 107-204, 116 Stat 745 (2002), codified at 15 USC § 7246 , the court ORDERS that the civil penalties imposed herein totaling $1,381,424.”
Sec. & Exch. Comm'n v. Lybrand, 281 F. Supp. 2d 726 (S.D.N.Y. 2003).
“, and Canyon Vista Corporation are also permanently enjoined from violating Section 5 of the Securities Act and, pursuant to Section 308 of the Sarbanes-Oxley Act of 2002, 15 U.S.C. § 7246 (a), their monetary penalties shall be added to the disgorgement amount.”
SEC v. Jarkesy, 603 U.S. 109 (2024).
“Although the SEC can choose to compen- sate injured shareholders from the civil penalties it collects, see 15 U. S. C. §7246 (a), it admits that it is not required to do so, see App.”
Sec. & Exch. Comm'n v. Marker, 427 F. Supp. 2d 583 (M.D.N.C. 2006).
“Therefore, the Court points the Commission to 15 U.S.C. § 7246 (a). 5 Section 7246(a) authorizes the Commission to move for the addition of any civil penalties to the disgorgement fund for the benefit of the victims of the securities violations.”
U.S. Sec. & Exch. Comm'n v. E-Smart Tech., Inc., 139 F. Supp. 3d 170 (D.D.C. 2015).
“See 15 U.S.C. § 7246 (a). Having determined that civil penalties will be awarded — albeit with the precise sum in flux as to Defendant Grace — the SEC -will be permitted to make such a motion in the fu *193 ture.”
Cont'l Cas. Co. v. Duckson, 826 F. Supp. 2d 1086 (N.D. Ill. 2011).
· cites it 2× “Duckson asserts that under the Fair Fund Provision, 15 U.S.C. § 7246 , the SEC may place sums received as civil penalties and disgorgement of ill-gotten gains in a fund to be used to compensate victims.”
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