Sarbanes Oxley Act Section 603

 

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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