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SEC. 603.
FEDERAL COURT AUTHORITY TO IMPOSE
PENNY STOCK
BARS.
(a) SECURITIES
EXCHANGE ACT OF 1934.Section 21(d)
of the
Securities
Exchange Act of 1934 (15 U.S.C. 78u(d)), as
amended
by this Act,
is amended by adding at the end the following:
(6) AUTHORITY OF A COURT TO PROHIBIT PERSONS
FROM PARTICIPATING
IN AN OFFERING OF PENNY STOCK.
(A) IN GENERAL.In
any proceeding under paragraph (1)
against any
person participating in, or, at the time of
the
alleged
misconduct who was participating in, an
offering of
penny stock,
the court may prohibit that person from
participating
in an
offering of penny stock, conditionally or
unconditionally,
and
permanently or for such period of time as the
court shall
determine.
(B) DEFINITION.For
purposes of this paragraph, the term
person
participating in an offering of penny stock
includes
any person
engaging in activities with a broker, dealer,
or
issuer for
purposes of issuing, trading, or inducing or
attempting to
induce the purchase or sale of, any penny
stock.
The
Commission may, by rule or regulation, define
such term
to include
other activities, and may, by rule,
regulation, or
order, exempt
any person or class of persons, in whole or
in part,
conditionally or unconditionally, from
inclusion in such
term..
(b) SECURITIES ACT OF
1933.Section 20 of the Securities
Act
of 1933 (15
U.S.C. 77t) is amended by adding at the end
the
following:
(g) AUTHORITY OF A COURT TO PROHIBIT PERSONS
FROM
PARTICIPATING IN AN OFFERING OF PENNY STOCK.
(1) IN GENERAL.In
any proceeding under subsection (a)
against any
person participating in, or, at the time of
the
alleged
misconduct, who was participating in, an
offering of
penny stock,
the court may prohibit that person from
participating
in an
offering of penny stock, conditionally or
unconditionally,
and
permanently or for such period of time as the
court shall
determine.
(2) DEFINITION.For
purposes of this subsection, the term
person
participating in an offering of penny stock
includes
any person
engaging in activities with a broker, dealer,
or
issuer for
purposes of issuing, trading, or inducing or
attempting to
induce the purchase or sale of, any penny
stock.
The
Commission may, by rule or regulation, define
such term
to include
other activities, and may, by rule,
regulation, or
order, exempt
any person or class of persons, in whole or
in part,
conditionally or unconditionally, from
inclusion in such
term..
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