U.S. Senators Chuck Grassley (R-Iowa) and Jack Reed (D-R.I.) introduced a bipartisan bill this week that would allow the Securities and Exchange Commission to impose much higher civil monetary penalties against individuals and financial firms that violate securities laws. The measure is called the Stronger Enforcement of Civil Penalties Act of 2015.<\/p>\n
Senator Grassley said that the current SEC fines are \u201cdecimal dust,\u201d which don\u2019t serve as much of a deterrent. He said that a penalty \u201cshould mean something.\u201d He and Senator Reed said they want to enhance investor protections. As Mr. Reed pointed out, over half of American households own securities, with many dependent on the market for their retirement and their kids\u2019 college education. He said that investors shouldn\u2019t have to incur substantial losses while violators get away with a \u201cslap on the wrist.\u201d<\/p>\n
Under the new bill, the SEC would be able to impose up to $1 million against individuals for every serious offense as long as the penalty isn\u2019t already tied to illegal funds that that the person received. Serious offenses would include deceit, fraud, deliberately ignoring regulations, and manipulation. The current maximum penalty for individuals over such offenses is $160,000.<\/p>\n