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8000 - Miscellaneous Statutes and Regulations
INJUNCTIONS AND PROSECUTION OF OFFENSES
SEC. 20. (a) Whenever it shall appear to the Commission, either
upon complaint or otherwise, that the provisions of this title, or of
any rule or regulation prescribed under authority thereof, have been or
are about to be violated, it may, in its discretion, either require or
permit such person to file with it a statement in writing, under oath,
or otherwise, as to all the facts and circumstances concerning the
subject matter which it believes to be in the public interest to
investigate, and may investigate such facts.
(b) Whenever it shall appear to the Commission that any person is
engaged or about to engage in any acts or practices which constitute or
will constitute a violation of the provisions of this title, or of any
rule or regulation prescribed under authority thereof, the Commission
may, in its discretion, bring an action in any district court of the
United States, or United States court of any Territory, to enjoin such
acts or practices, and upon a proper showing a permanent or temporary
injunction or restraining order shall be granted without bond. The
Commission may transmit such evidence as may be available concerning
such acts or practices to the Attorney General who may, in his
discretion, institute the necessary criminal proceedings under this
title. Any such criminal proceeding may be brought either in the
district wherein the transmittal of the prospectus or security
complained of begins, or in the district wherein such prospectus or
security is received.
(c) Upon application of the Commission, the district courts of the
United States and the United States courts of any Territory shall have
jurisdiction to issue writs of mandamus commanding any person to comply
with the provisions of this title or any order of the Commission made
in pursuance thereof.
(d) MONEY PENALTIES IN CIVIL ACTIONS.--
(1) AUTHORITY OF COMMISSION.--Whenever it shall appear
to the Commission that any person has violated any provision of this
title, the rules or regulations thereunder, or a cease-and-desist order
entered by the Commission pursuant to
section 8A of this title, other
than by committing a violation subject to a penalty pursuant to
section 21A of the Securities
Exchange Act of 1934, the Commission may bring an action in a United
States district court to seek, and the court shall have jurisdiction to
impose, upon a proper showing, a civil penalty to be paid by the person
who committed such violation.
(2) AMOUNT OF PENALTY.--
(A) FIRST TIER.--The amount of the penalty shall be
determined by the court in light of the facts and circumstances. For
each violation, the amount of the penalty shall not exceed the greater
of (i) $5,000 for a natural person or $50,000 for any other person, or
(ii) the gross amount of pecuniary gain to such defendant as a result
of the violation.
(B) SECOND TIER.--Notwithstanding subparagraph (A), the
amount of penalty for each such violation shall not exceed the greater
of (i) $50,000 for a natural person or $250,000 for any other person,
or (ii) the gross amount of pecuniary gain to such defendant as a
result of the violation, if the violation described in paragraph (1)
involved fraud, deceit, manipulation, or deliberate or reckless
disregard of a regulatory requirement.
(C) THIRD TIER.--Notwithstanding subparagraphs (A) and
(B), the amount of penalty for each such violation shall not exceed the
greater of (i) $100,000 for a natural
{{2-29-08 p.8994}}person or $500,000 for any
other person, or (ii) the gross amount of pecuniary gain to such
defendant as a result of the violation, if--
(I) the violation described in paragraph (1) involved fraud,
deceit, manipulation, or deliberate or reckless disregard of a
regulatory requirement; and
(II) such violation directly or indirectly resulted in
substantial losses or created a significant risk of substantial losses
to other persons.
(3) PROCEDURES FOR COLLECTION.--
(A) PAYMENT OF PENALTY TO TREASURY.--A penalty imposed
under this section shall be payable into the Treasury of the United
States, except as otherwise provided in section 308 of the
Sarbanes-Oxley Act of 2002.
(B) COLLECTION OF PENALTIES.--If a person upon whom such
a penalty is imposed shall fail to pay such penalty within the time
prescribed in the court's order, the Commission may refer the matter to
the Attorney General who shall recover such penalty by action in the
appropriate United States district court.
(C) REMEDY NOT EXCLUSIVE.--The actions authorized by
this subsection may be brought in addition to any other action that the
Commission or the Attorney General is entitled to bring.
(D) JURISDICTION AND VENUE.--For purposes of
section 22 of this title,
actions under this section shall be actions to enforce a liability or a
duty created by this title.
(4) Special provisions relating to a violation of a
cease-and-desist order.--In an action to enforce a cease-and-desist
order entered by the Commission pursuant to
section 8A, each separate
violation of such order shall be a separate offense, except that in the
case of a violation through a continuing failure to comply with such an
order, each day of the failure to comply with the order shall be deemed
a separate offense.
(e) Authority of a Court To Prohibit Persons From Serving as
Officers and Directors.--In any proceeding under subsection (b),
the court may prohibit, conditionally or unconditionally, and
permanently or for such period of time as it shall determine, any
person who violated section 17(a)(1) of this title from acting as an
officer or director of any issuer that has a class of securities
registered pursuant to section 12 of the Securities Exchange Act of
1934 or that is required to file reports pursuant to
section 15(d) of such Act if
the person's conduct demonstrates unfitness to serve as an officer or
director of any such issuer.
(f) Prohibition of Attorneys' Fees Paid From Commission
Disgorgement Funds.--Except as otherwise ordered by the court upon
motion by the Commission, or, in the case of an administrative action,
as otherwise ordered by the Commission, funds disgorged as the result
of an action brought by the Commission in Federal court, or as a result
of any Commission administrative action, shall not be distributed as
payment for attorneys' fees or expenses incurred by private parties
seeking distribution of the disgorged funds.
(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.
[Codified to 15 U.S.C. 77t]
{{8-30-02 p.8994.01}}
[Source: Section 20 of title I of the Act of May 27, 1933
(Pub. L. No. 22; 48 Stat. 86), effective May 27, 1933, as amended by
the Act of June 25, 1936 (Pub. L. No. 796; 49 Stat. 1921), effective
June 25, 1936; section 32(b) of the Act of June 25, 1948 (Pub. L. No.
773; 62 Stat. 991), effective September 1, 1948; section 127 of the Act
of May 24, 1949 (Pub. L. No. 72; 63 Stat. 107), effective September 1,
1948; section 208 of title II of the Act of December 4, 1987 (Pub. L.
No. 100--181; 101 Stat. 1253), effective December 4, 1987; section 101
of title I of the Act of October 15, 1990 (Pub. L. No. 101--429; 104
Stat. 932), effective October 15, 1990; section 103(b)(1) of title I of
the Act of December 22, 1995 (Pub. L. No. 104--67; 109 Stat. 756,
effective December 22, 1995; sections 305(a)(2) and 308(d)(3) of title
III and section 603(b) of title VI of the Act of July 30, 2002 (Pub. L.
No. 107--204; 116 Stat. 779, 785, and 795, respectively), effective
July 30, 2002]
HEARINGS BY COMMISSION
SEC. 21. All hearings shall be public and may be held before the
Commission or an officer or officers of the Commission designated by
it, and appropriate records thereof shall be kept.
[Codified to 15 U.S.C. 77u]
[Source: Section 21 of title I of the Act of May 27, 1933 (Pub. L.
No. 22; 48 Stat. 86), effective May 27, 1933]
JURISDICTION OF OFFENSES AND SUITS
SEC. 22. (a) The district courts of the United States, and
United States courts of any Territory, shall have jurisdiction of
offenses and violations under this title and under the rules and
regulations promulgated by the Commission in respect thereto, and,
concurrent with State and Territorial courts, except as provided in
section 16 with respect to
covered class actions, of all suits in equity and actions at law bought
to enforce any liability or duty created by this title. Any such suit
or action may be brought in the district wherein the defendant is found
or is an inhabitant or transacts business, or in the district where the
offer or sale took place, if the defendant participated therein, and
process in such cases may be served in any other district of which the
defendant is an inhabitant or wherever the defendant may be found.
Judgments and decrees so rendered shall be subject to review as
provided in sections 1254, 1291, 1292, and 1294 of title 28, United
States Code. Except as provided in section 16(c), no case arising under
this title and brought in any State court of competent jurisdiction
shall be removed to any court of the United States. No costs shall be
assessed for or against the Commission in any proceeding under this
title brought by or against it in the Supreme Court or such other
courts.
(b) In case of contumacy or refusal to obey a subpoena issued to
any person, any of the said United States courts, within the
jurisdiction of which said person guilty of contumacy or refusal to
obey is found or resides, upon application by the Commission may issue
to such person an order requiring such person to appear before the
Commission, or one of its examiners designated by it, there to produce
documentary evidence if so ordered, or there to give evidence touching
the matter in question; and any failure to obey such order of the court
may be punished by said court as a contempt thereof.
[Codified to 15 U.S.C. 77v]
[Source: Section 22 of title I of the Act of May 27, 1933
(Pub. L. No. 22; 48 Stat. 86), effective May 27, 1933, as amended by
the Act of June 25, 1936 (Pub. L. No. 796; 49 Stat. 1921), effective
June 25, 1936; section 32(b) of the Act of June 25, 1948 (Pub. L. No.
773; 62 Stat. 991), effective September 1, 1948; section 127 of the Act
of May 24, 1949 (Pub. L. No. 72; 63 Stat. 107), effective September 1,
1948; section 11 of title I of the Act of August 10, 1954 (Pub. L. No.
577; 68 Stat. 686), effective October 8, 1954; section 213 of title II
of the Act of October 15, 1970 (Pub. L. No. 91--452; 84 Stat. 929),
effective December 13, 1970; and section 209 of title II of the Act of
December 4, 1987 (Pub. L. No. 100--181; 101 Stat. 1253), effective
December 4, 1987; section 101(a)(3) of title I of the Act of November
3, 1998 (Pub. L. No. 105--353; 112 Stat. 3230), effective November 3,
1998]
{{8-30-02 p.8994.02}}
UNLAWFUL REPRESENTATIONS
SEC. 23. Neither the fact that the registration statement
for a security has been filed or is in effect nor the fact that a stop
order is not in effect with respect thereto shall be deemed a finding
by the Commission that the registration statement is true and accurate
on its face or that it does not contain an untrue statement of fact or
omit to state a material fact, or be held to mean that the Commission
has in any way passed upon the merits of, or given approval to, such
security. It shall be unlawful to make, or cause to be made, to any
prospective purchaser any representation contrary to the foregoing
provisions of this section.
[Codified to 15 U.S.C. 77w]
[Source: Section 23 of title I of the Act of May 27, 1933
(Pub. L. No. 22; 48 Stat. 87), effective May 27, 1933]
PENALTIES
SEC. 24. Any person who willfully violates any of the
provisions of this title, or the rules and regulations promulgated by
the Commission under authority thereof, or any person who willfully, in
a registration statement filed under this title, makes any untrue
statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, shall upon conviction be fined not more than
$10,000 or imprisoned not more than five years, or both.
[Codified to 15 U.S.C. 77x]
[Source: Section 24 of title I of the Act of May 27, 1933 (Pub. L.
No. 22; 48 Stat. 87), effective May 27, 1933, as amended by section
27(a) of the Act of June 4, 1975 (Pub. L. No. 94--29; 89 Stat. 163),
effective June 4, 1975]
JURISDICTION OF OTHER GOVERNMENT AGENCIES OVER
SECURITIES
SEC. 25. Nothing in this title shall relieve any person
from submitting to the respective supervisory units of the Government
of the United States information, reports, or other documents that are
now or may hereafter be required by any provision of law.
[Codified to 15 U.S.C. 77y]
[Source: Section 25 of title I of the Act of May 27, 1933 (Pub. L.
No. 22; 48 Stat. 87), effective May 27, 1933]
SEPARABILITY OF PROVISIONS
SEC. 26. If any provision of this Act, or the application
of such provision to any person or circumstance, shall be held invalid,
the remainder of this Act, or the application of such provision to
persons or circumstances other than those as to which it is held
invalid, shall not be affected thereby.
[Codified to 15 U.S.C. 77z]
[Source: Section 26 of title I of the Act of May 27, 1933 (Pub. L.
No. 22; 48 Stat. 88), effective May 27, 1933]
PRIVATE SECURITIES LITIGATION.
SEC. 27. (a) PRIVATE CLASS ACTIONS.--
(1) IN GENERAL.--The provisions of this subsection shall
apply to each private action arising under this title that is brought
as a plaintiff class action pursuant to the Federal Rules of Civil
Procedure.
{{8-30-02 p.8994.02-A}}
(2) CERTIFICATION FILED WITH COMPLAINT.--
(A) IN GENERAL.--Each plaintiff seeking to serve as a
representative party on behalf of a class shall provide a sworn
certification, which shall be personally signed by such plaintiff and
filed with the complaint, that--
(i) states that the plaintiff has reviewed the complaint and
authorized its filing;
(ii) states that the plaintiff did not purchase the security that
is the subject of the complaint at the direction of plaintiff's counsel
or in order to participate in any private action arising under this
title;
(iii) states that the plaintiff is willing to serve as a
representative party on behalf of a class, including providing
testimony at deposition and trial, if necessary;
(iv) sets forth all of the transactions of the plaintiff in the
security that is the subject of the complaint during the class period
specified in the complaint;
(v) identifies any other action under this title, filed during
the 3-year period preceding the date on which the certification is
signed by the plaintiff, in which the plaintiff has sought to serve, or
served, as a representative party on behalf of a class;
and
{{2-29-96 p.8994.03}}
(vi) states that the plaintiff will not accept any payment for
serving as a representative party on behalf of a class beyond the
plaintiff's pro rata share of any recovery, except as ordered or
approved by the court in accordance with paragraph (4).
(B) NONWAIVER OF ATTORNEY-CLIENT PRIVILEGE.--The
certification filed pursuant to subparagraph (A) shall not be construed
to be a waiver of the attorney-client privilege.
(3) APPOINTMENT OF LEAD PLAINTIFF.--
(A) EARLY NOTICE TO CLASS MEMBERS.--
(i) IN GENERAL.--Not later than 20 days after the date
on which the complaint is filed, the plaintiff or plaintiffs shall
cause to be published, in a widely circulated national
business-oriented publication or wire service, a notice advising
members of the purported plaintiff class--
(I) of the pendency of the action, the claims asserted therein,
and the purported class period; and
(II) that, not later than 60 days after the date on which the
notice is published, any member of the purported class may move the
court to serve as lead plaintiff of the purported class.
(ii) MULTIPLE ACTIONS.--If more than one action on
behalf of a class asserting substantially the same claim or claims
arising under this title is filed, only the plaintiff or plaintiffs in
the first filed action shall be required to cause notice to be
published in accordance with clause (i).
(iii) Additional notices may be required under federal
rules.--Notice required under clause (i) shall be in addition to
any notice required pursuant to the Federal Rules of Civil Procedure.
(B) APPOINTMENT OF LEAD PLAINTIFF.--
(i) IN GENERAL.--Not later than 90 days after the date
on which a notice is published under subparagraph (A)(i), the court
shall consider any motion made by a purported class member in response
to the notice, including any motion by a class member who is not
individually named as a plaintiff in the complaint or complaints, and
shall appoint as lead plaintiff the member or members of the purported
plaintiff class that the court determines to be most capable of
adequately representing the interests of class members (hereafter in
this paragraph referred to as the "most adequate plaintiff") in
accordance with this subparagraph.
(ii) CONSOLIDATED ACTIONS.--If more than one action on
behalf of a class asserting substantially the same claim or claims
arising under this title has been filed, and any party has sought to
consolidate those actions for pretrial purposes or for trial, the court
shall not make the determination required by clause (i) until after the
decision on the motion to consolidate is rendered. As soon as
practicable after such decision is rendered, the court shall appoint
the most adequate plaintiff as lead plaintiff for the consolidated
actions in accordance with this subparagraph.
(iii) REBUTTABLE PRESUMPTION.--
(I) IN GENERAL.--Subject to subclause (II), for purposes
of clause (i), the court shall adopt a presumption that the most
adequate plaintiff in any private action arising under this title is
the person or group of persons that--
(aa) has either filed the complaint or made a motion in response
to a notice under subparagraph (A)(i);
(bb) in the determination of the court, has the largest financial
interest in the relief sought by the class; and
(cc) otherwise satisfies the requirements of Rule 23 of the
Federal Rules of Civil Procedure.
(II) REBUTTAL EVIDENCE.--The presumption described in
subclause (I) may be rebutted only upon proof by a member of the
purported plaintiff class that the presumptively most adequate
plaintiff--
(aa) will not fairly and adequately protect the interests of the
class; or
{{2-29-96 p.8994.04}}
(bb) is subject to unique defenses that render such plaintiff
incapable of adequately representing the class.
(iv) DISCOVERY.--For purposes of this subparagraph,
discovery relating to whether a member or members of the purported
plaintiff class is the most adequate plaintiff may be conducted by a
plaintiff only if the plaintiff first demonstrates a reasonable basis
for a finding that the presumptively most adequate plaintiff is
incapable of adequately representing the class.
(v) SELECTION OF LEAD COUNSEL.--The most adequate
plaintiff shall, subject to the approval of the court, select and
retain counsel to represent the class.
(vi) RESTRICTIONS ON PROFESSIONAL PLAINTIFFS.-- Except
as the court may otherwise permit, consistent with the purposes of this
section, a person may be a lead plaintiff, or an officer, director, or
fiduciary of a lead plaintiff, in no more than 5 securities class
actions brought as plaintiff class actions pursuant to the Federal
Rules of Civil Procedure during any 3-year period.
(4) RECOVERY BY PLAINTIFFS.--The share of any final
judgment or of any settlement that is awarded to a representative party
serving on behalf of a class shall be equal, on a per share basis, to
the portion of the final judgment or settlement awarded to all other
members of the class. Nothing in this paragraph shall be construed to
limit the award of reasonable costs and expenses (including lost wages)
directly relating to the representation of the class to any
representative party serving on behalf of the class.
(5) RESTRICTIONS ON SETTLEMENTS UNDER SEAL.--The terms
and provisions of any settlement agreement of a class action shall not
be filed under seal, except that on motion of any party to the
settlement, the court may order filing under seal for those portions of
a settlement agreement as to which good cause is shown for such filing
under seal. For purposes of this paragraph, good cause shall exist only
if publication of a term or provision of a settlement agreement would
cause direct and substantial harm to any party.
(6) Restrictions on payment of attorneys' fees and
expenses.--Total attorneys' fees and expenses awarded by the court
to counsel for the plaintiff class shall not exceed a reasonable
percentage of the amount of any damages and prejudgment interest
actually paid to the class.
(7) Disclosure of settlement terms to class
members.--Any proposed or final settlement agreement that is
published or otherwise disseminated to the class shall include each of
the following statements, along with a cover page summarizing the
information contained in such statements:
(A) STATEMENT OF PLAINTIFF RECOVERY.--The amount of the
settlement proposed to be distributed to the parties to the action,
determined in the aggregate and on an average per share basis.
(B) STATEMENT OF POTENTIAL OUTCOME OF CASE.--
(i) AGREEMENT ON AMOUNT OF DAMAGES.--If the settling
parties agree on the average amount of damages per share that would be
recoverable if the plaintiff prevailed on each claim alleged under this
title, a statement concerning the average amount of such potential
damages per share.
(ii) DISAGREEMENT ON AMOUNT OF DAMAGES.--If the parties
do not agree on the average amount of damages per share that would be
recoverable if the plaintiff prevailed on each claim alleged under this
title, a statement from each settling party concerning the issue or
issues on which the parties disagree.
(iii) INADMISSIBILITY FOR CERTAIN PURPOSES.--A statement
made in accordance with clause (i) or (ii) concerning the amount of
damages shall not be admissible in any Federal or State judicial action
or administrative proceeding, other than an action or proceeding
arising out of such statement.
(C) STATEMENT OF ATTORNEYS' FEES OR COSTS SOUGHT.--If
any of the settling parties or their counsel intend to apply to the
court for an award of attorneys' fees or costs from any fund
established as part of the settlement, a statement indicating which
parties or counsel intend to make such an application, the amount of
fees and costs that will be
{{2-26-99 p.8994.05}}sought (including
the amount of such fees and costs determined on an average per share
basis), and a brief explanation supporting the fees and costs sought.
(D) IDENTIFICATION OF LAWYERS' REPRESENTATIVES.--The
name, telephone number, and address of one or more representatives of
counsel for the plaintiff class who will be reasonably available to
answer questions from class members concerning any matter contained in
any notice of settlement published or otherwise disseminated to the
class.
(E) REASONS FOR SETTLEMENT.--A brief statement
explaining the reasons why the parties are proposing the settlement.
(F) OTHER INFORMATION.--Such other information as may be
required by the court.
(8) ATTORNEY CONFLICT OF INTEREST.--If a plaintiff class
is represented by an attorney who directly owns or otherwise has a
beneficial interest in the securities that are the subject of the
litigation, the court shall make a determination of whether such
ownership or other interest constitutes a conflict of interest
sufficient to disqualify the attorney from representing the plaintiff
class.
(b) STAY OF DISCOVERY; PRESERVATION OF EVIDENCE.--
(1) IN GENERAL.--In any private action arising under
this title, all discovery and other proceedings shall be stayed during
the pendency of any motion to dismiss, unless the court finds, upon the
motion of any party, that particularized discovery is necessary to
preserve evidence or to prevent undue prejudice to that party.
(2) PRESERVATION OF EVIDENCE.--During the pendency of
any stay of discovery pursuant to this subsection, unless otherwise
ordered by the court, any party to the action with actual notice of the
allegations contained in the complaint shall treat all documents, data
compilations (including electronically recorded or stored data), and
tangible objects that are in the custody or control of such person and
that are relevant to the allegations, as if they were the subject of a
continuing request for production of documents from an opposing party
under the Federal Rules of Civil Procedure.
(3) SANCTION FOR WILLFUL VIOLATION.--A party aggrieved
by the willful failure of an opposing party to comply with paragraph
(2) may apply to the court for an order awarding appropriate sanctions.
(4) CIRCUMVENTION OF STAY OF DISCOVERY.--Upon a proper
showing, a court may stay discovery proceedings in any private action
in a State court as necessary in aid of its jurisdiction, or to protect
or effectuate its judgments, in an action subject to a stay of
discovery pursuant to this subsection.
(c) SANCTIONS FOR ABUSIVE LITIGATION.--
(1) MANDATORY REVIEW BY COURT.--In any private action
arising under this title, upon final adjudication of the action, the
court shall include in the record specific findings regarding
compliance by each party and each attorney representing any party with
each requirement of Rule 11(b) of the Federal Rules of Civil Procedure
as to any complaint, responsive pleading, or dispositive motion.
(2) MANDATORY SANCTIONS.--If the court makes a finding
under paragraph (1) that a party or attorney violated any requirement
of Rule 11(b) of the Federal Rules of Civil Procedure as to any
complaint, responsive pleading, or dispositive motion, the court shall
impose sanctions on such party or attorney in accordance with Rule 11
of the Federal Rules of Civil Procedure. Prior to making a finding that
any party or attorney has violated Rule 11 of the Federal Rules of
Civil Procedure, the court shall give such party or attorney notice and
an opportunity to respond.
(3) PRESUMPTION IN FAVOR OF ATTORNEYS' FEES AND COSTS.--
(A) IN GENERAL.--Subject to subparagraphs (B) and (C),
for purposes of paragraph (2), the court shall adopt a presumption that
the appropriate sanction--
(i) for failure of any responsive pleading or dispositive motion
to comply with any requirement of Rule 11(b) of the Federal Rules of
Civil Procedure is an award to the opposing party of the reasonable
attorneys' fees and other expenses incurred as a direct result of the
violation; and
{{2-26-99 p.8994.06}}
(ii) for substantial failure of any complaint to comply with any
requirement of Rule 11(b) of the Federal Rules of Civil Procedure is an
award to the opposing party of the reasonable attorneys' fees and other
expenses incurred in the action.
(B) REBUTTAL EVIDENCE.--The presumption described in
subparagraph (A) may be rebutted only upon proof by the party or
attorney against whom sanctions are to be imposed that--
(i) the award of attorneys' fees and other expenses will impose
an unreasonable burden on that party or attorney and would be unjust,
and the failure to make such an award would not impose a greater burden
on the party in whose favor sanctions are to be imposed; or
(ii) the violation of Rule 11(b) of the Federal Rules of Civil
Procedure was de minimis.
(C) SANCTIONS.--If the party or attorney against whom
sanctions are to be imposed meets its burden under subparagraph (B),
the court shall award the sanctions that the court deems appropriate
pursuant to Rule 11 of the Federal Rules of Civil Procedure.
(d) DEFENDANT'S RIGHT TO WRITTEN INTERROGATORIES.--In any
private action arising under this title in which the plaintiff may
recover money damages only on proof that a defendant acted with a
particular state of mind, the court shall, when requested by a
defendant, submit to the jury a written interrogatory on the issue of
each such defendant's state of mind at the time the alleged violation
occurred.
[Codified to 15 U.S.C. 77z--1]
[Source: Section 101(a) of title I of the Act of December 22, 1995
(Pub. L. No. 104--67; 109 Stat. 737), effective December 22, 1995; as
amended by section 101(a)(2) of title I of the Act of November 3, 1998
(Pub. L. No. 105--353; 112 Stat. 3230 and 3235), effective November 3,
1998]
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