CROSS REFERENCES Hearings by Commission under Investment Advisers Act of 1940, see section 80b-12 of this title. Investment Company Act of 1940, see section 80a-40 of this title. Public Utility Holding Company Act of 1935, see section 79s of this title. Securities Act of 1933, see section 77u of this title. Securities Exchange Act of 1934, see section 78v of this title. RULES OF PRACTICE Rules of Practice before the Securities Exchange Commission are set out following section 78u of this title. § 77uuu. Special powers of the Commission. (a) For the purpose of any investigation or any other proceeding which, in the opinion of the Commission, is necessary and proper for the enforcement of this subchapter, any member of the Commission, or any officer thereof designated by it, is empowered to administer oaths and affirmations, subpena witnesses, compel their attendance, take evidence, and require the production of any books, papers, correspondence, memoranda, contracts, agreements, or other records which the Commission deems relevant or material to the inquiry. Such attendance of witnesses and the production of any such books, papers, correspondence, memoranda, contracts, agreements, or other records may be required from any place in the United States or in any Territory at any designated place of investigation or hearing. In addition, the Commission shall have the powers with respect to investigations and hearings, and with respect to the enforcement of, and offenses and violations under, this subchapter and rules and regulations and orders prescribed under the authority thereof, provided in sections 77t and 77v (b), (c) of this title. (b) The Treasury Department, the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Reserve Banks, and the Federal Deposit Insurance Corporation are authorized, under such conditions as they may prescribe, to make available to the Commission such reports, records, or other information as they may have available with respect to trustees or prospective trustees under indentures qualified or to be qualified under this subchapter, and to make through their examiners or other employees for the use of the Commission, examinations of such trustees or prospective trustees. Every such trustee or prospective trustee shall, as a condition precedent to qualification of such indenture, consent that reports of examinations by Federal, State, Territorial, or District authorities may be furnished by such authorities to the Commission upon request therefor. Notwithstanding any provision of this subchapter, no report, record, or other information made available to the Commission under this subsection, no report of an examination made under this subsection for the use of the Commission, no report of an examination made of any trustee or prospective trustee by any Federal, State, Territorial, or District authority having jurisdiction to examine or super vise such trustee, no report made by any such trustee or prospective trustee to any such authority, and no correspondence between any such authority and any such trustee or prospective trustee, shall be divulged or made known or available by the Commission or any member, officer, agent, or employee thereof, to any person other than a member, officer, agent, or employee of the Commission: Provided, That the Commission may make available to the Attorney General of the United States, in confidence, any information obtained from such records, reports of examination, other reports, or correspondence, and deemed necessary by the Commission, or requested by him, for the purpose of enabling him to perform his duties under this subchapter. (c) Any investigation of a prospective trustee, or any proceeding or requirement for the purpose of obtaining information regarding a prospective trustee, under any provision of this subchapter, shall be limited (1) to determining whether such prospective trustee is qualified to act as trustee under the provisions of subsection (b) of section 77jjj of this title; (2) to requiring the inclusion in the registration statement or application of information with respect to the eligibility of such prospective trustee under paragraph (1) of subsection (a) of section 77jjj of this title; and (3) to requiring the inclusion in the registration statement or application of the most recent published report of condition of such prospective trustee, as described in paragraph (2) of subsection (a) of section 77jjj of this title, or, if the indenture does not contain the provision with respect to combined capital and surplus authorized by the last sentence of paragraph (2) of subsection (a) of section 77jjj of this title, to determine whether such prospective trustee is eligible to act as such under paragraph (2) of subsection (a) of section 77jjj of this title. (d) The provisions of section 78d (b) of this title shall be applicable with respect to the power of the Commission to appoint and fix the compensation of such officers, attorneys, examiners, and other experts, and such other officers and employees, as may be necessary for carrying out its functions under this subchapter. (May 27, 1933, ch. 38, title III, § 321, as added Aug. 3, 1939, ch. 411, 53 Stat. 1174.) TRANSFER OF FUNCTIONS All executive and administrative functions of the Securities and Exchange Commission were, with certain exceptions, transferred to the Chairman of such Commission, with authority vested in him to authorize their performance by any officer, employee, or administrative unit under his jurisdiction, by 1950 Reorg. Plan No. 10, §§ 1, 2, eff. May 24, 1950, 15 F. R. 3175, 64 Stat. 1265, set out in note under section 78d of this title. EXCEPTION AS TO TRANSFER OF FUNCTIONS Functions vested by any provision of law in the Comptroller of the Currency, referred to in this section, were not included in the transfer of functions of officers, agencies and employees of the Department of the Treasury to the Secretary of the Treasury, made by 1950 Reorg. Plan No. 26, § 1, eff. July 31, 1950, 15 F. R. 4935, 64 Stat. 1280, set out in note under section 241 of Title 5. Executive Departments and Government Officers and Employees. CROSS REFERENCES Administration of oaths, etc., under Investment Advisers Act of 1940, see section 80b-9 (b) of this title. Investment Company Act of 1940, see section 80a-41 (b) of this title. Public Utility Holding Company Act of 1935, see section 79r (c) of this title. Securities Act of 1933, see section 77s (b) of this title. Securities Exchange Act of 1934, see section 78u (b) of this title. Availability of information and documents contained in application for qualification of indenture as subject to this section, see section 77ggg of this title. RULES OF PRACTICE Rules of Practice before the Securities Exchange Commission are set out following section 78u of this title. § 77vvv. Court review of orders; jurisdiction of offenses and suits. (a) Orders of the Commission under this subchapter (including orders pursuant to the provisions of sections 77eee (b) and 77ggg (c) of this title) shall be subject to review in the same manner, upon the same conditions, and to the same extent, as provided in section 771 of this title, with respect to orders of the Commission under the Securities Act of 1933. (b) Jurisdiction of offenses and violations under, and jurisdiction and venue of suits and actions brought to enforce any liability created by, this subchapter, or any rules or regulations or orders prescribed under the authority thereof, shall be as provided in section 77v (a) of this title. (May 27, 1933, ch. 38, title III, § 322, as added Aug. 3, 1939, ch. 411, 53 Stat. 1175.) REFERENCES IN TEXT The Securities Act of 1933, referred to in subsection (a), is classified to section 77a et seq. of this title, which is subchapter I of this chapter. TRANSFER OF FUNCTIONS All executive and administrative functions of the Securities and Exchange Commission were, with certain exceptions, transferred to the Chairman of such Commission, with authority vested in him to authorize their performance by any officer, employee, or administrative unit under his jurisdiction, by 1950 Reorg. Plan No. 10, §§ 1, 2, eff. May 24, 1950, 15 F. R. 3175, 64 Stat. 1265, set out in note under section 78d of this title. CROSS REFERENCES Jurisdiction of offenses and suits under Investment Advisers Act of 1940, see section 80b-14 of this title. Investment Company Act of 1940, see section 80a-43 of this title. Public Utility Holding Company Act of 1935, see section 79y of this title. Securities Exchange Act of 1934, see section 78aa of this title. Review of orders under Investment Advisers Act of 1940, see section 80b-13 of this title. Investment Company Act of 1940, see section 80a-42 of this title. Public Utility Holding Company Act of 1935, see section 79x of this title. Securities Exchange Act of 1934, see section 78y of this title. Rules and regulations, authority of Commission to make, issue, amend, and rescind, see section 77sss of this title. § 77www. Liability for misleading statements. (a) Any person who shall make or cause to be made any statement in any application, report, or document filed with the Commission pursuant to any provisions of this subchapter, or any rule, regulation, or order thereunder, which statement was at the time and in the light of the circumstances under which it was made false or misleading with respect to any material fact, or who shall omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, shall be liable to any person (not knowing that such statement was false or misleading or of such omission) who, in reliance upon such statement or omission, shall have purchased or sold a security issued under the indenture to which such application, report, or document relates, for damages caused by such reliance, unless the person sued shall prove that he acted in good faith and had no knowledge that such statement was false or misleading or of such omission. A person seeking to enforce such liability may sue at law or in equity in any court of competent jurisdiction. In any such suit the court may, in its discretion, require an undertaking for the payment of the costs of such suit and assess reasonable costs, including reasonable attorneys' fees, against either party litigant, having due regard to the merits and good faith of the suit or defense. No action shall be maintained to enforce any liability created under this section unless brought within one year after the discovery of the facts constituting the cause of action and within three years after such cause of action accrued. (b) The rights and remedies provided by this subchapter shall be in addition to any and all other rights and remedies that may exist under the Securities Act of 1933, or the Securities Exchange Act of 1934, or the Public Utility Holding Company Act of 1935, or otherwise at law or in equity; but no person permitted to maintain a suit for damages under the provisions of this subchapter shall recover, through satisfaction of judgment in one or more actions, a total amount in excess of his actual damages on account of the act complained of. (May 27, 1933, ch. 38, title III, § 323, as added Aug. 3, 1939, ch. 411, 53 Stat. 1176.) REFERENCES IN TEXT The Securities Act of 1933, referred to in subsection (b), is classified to section 77a et seq. of this title, which is subchapter I of this chapter. The Securities Exchange Act of 1934, referred to in subsection (b), is classified to section 78a et seq. of this title and to sections 77b-77e, 77j, 77k, 77m, 770 and 77s of this title. The Public Utility Holding Company Act of 1935, referred to in subsection (b), is classified to section 79 et seq. of this title. TRANSFER OF FUNCTIONS All executive and administrative functions of the Securities and Exchange Commission were, with certain exceptions, transferred to the Chairman of such Commission, with authority vested in him to authorize their performance by any officer, employee, or administrative unit under his jurisdiction, by 1950 Reorg. Plan No. 10, §§ 1, 2, eff. May 24, 1950, 15 F. R. 3175, 64 Stat. 1265, set out in note under section 78d of this title. CROSS REFERENCES Additional remedies under Public Utility Holding Company Act of 1935, see section 79p of this title. Securities Act of 1933, see section 77p of this title. Securities Exchange Act of 1934, see section 78bb of this title. Civil liabilities on account of false registration statement, see section 77k of this title. Fraudulent interstate transactions, see section 77q of this title. Liability for misleading statements under Public Utility Holding Company Act of 1935, see section 79p of this title. Securities Exchange Act of 1934, see section 78r of this title. Limitation of actions under Securities Act of 1933, see section 77m of this title. Securities Exchange Act of 1934, see sections 781 and 78r of this title. Statements in or omissions from analysis required under sections 77eee-77ggg of this title, section as inapplicable to, see section 77eee of this title. Undertaking for costs under Securities Act of 1933, see section 77k of this title. Securities Exchange Act of 1934, see sections 781 and 78r of this title. This subchapter in suit to enforce right or remedy or suit against trustee, see section 77000 of this title. FEDERAL RULES OF CIVIL PROCEDURE Costs, see rule 54, following section 2072 of title 28, Judiciary and Judicial Procedure. One form of action, see rule 2. § 77xxx. Unlawful representations. It shall be unlawful for any person in issuing or selling any security to represent or imply in any manner whatsoever that any action or failure to act by the Commission in the administration of this subchapter means that the Commission has in any way passed upon the merits of, or given approval to, any trustee, indenture or security, or any transaction or transactions therein, or that any such action or failure to act with regard to any statement or report filed with or examined by the Commission pursuant to this subchapter or any rule, regulation, or order thereunder, has the effect of a finding by the Commission that such statement or report is true and accurate on its face or that it is not false or misleading. (May 27, 1933, ch. 38, title III, § 324, as added Aug. 3, 1939, ch. 411, 53 Stat. 1176.) TRANSFER OF FUNCTIONS All executive and administrative functions of the Securities and Exchange Commission were, with certain exceptions, transferred to the Chairman of such Commission, with authority vested in him to authorize their performance by any officer, employee, or administrative unit under his jurisdiction, by 1950 Reorg. Plan No. 10, §§ 1, 2, eff. May 24, 1950, 15 F. R. 3175, 64 Stat. 1265, set out in note under section 78d of this title. CROSS REFERENCES Representation of guaranty or recommendation by United States of registered holding company's security, see section 79z-2 of this title. Representations by Corporation of Foreign Security Holders as acting for Department of State or United States forbidden, see section 77kk of this title. Rules and regulations, authority of Commission to make, issue, amend, and rescind, see section 77sss of this title. Unlawful representations under Investment Advisers Act of 1940, see section 80b-8 of this title. Investment Company Act of 1940, see section 80a-34 of this title. Securities Act of 1933, see section 77w of this title. Securities Exchange Act of 1934, see section 78z of this title. § 77yyy. Penalties. Any person who willfully violates any provision of this subchapter or any rule, regulation, or order thereunder or any person who willfully, in any application, report, or document filed or required to be filed under the provisions of this subchapter or any rule, regulation, or order thereunder, 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 $5,000 or imprisoned not more than five years, or both. (May 27, 1933, ch. 38, title III, § 325, as added Aug. 3, 1939, ch. 411, 53 Stat. 1177.) CROSS REFERENCES Penalties under Investment Advisers Act of 1940, see section 80b-17 of this title. Investment Company Act of 1940, see section 80a48 of this title. Public Utility Holding Company Act of 1935, see section 79z-3 of this title. Securities Act of 1933, see section 77x of this title. Securities Exchange Act of 1934, see section 78ff of this title. Rules and regulations, authority of Commission to make, issue, amend and rescind, see section 77sss of this title. Statements in or omissions from analysis required under sections 77eee-77ggg of this title, section as inapplicable to, see section 77eee of this title. § 77zzz. Effect on existing law. Except as otherwise expressly provided, nothing in this subchapter shall affect (1) the jurisdiction of the Commission under the Securities Act of 1933, or the Securities Exchange Act of 1934, or the Public Utility Holding Company Act of 1935, over any person, security, or contract, or (2) the rights, obligations, duties, or liabilities of any person under such acts; nor shall anything in this subchapter affect the jurisdiction of any other commission, board, agency, or officer of the United States or of any State or political subdivision of any State, over any person or security, insofar as such jurisdiction does not conflict with any provision of this subchapter or any rule, regulation, or order thereunder. (May 27, 1933, ch. 38, title III, § 326, as added Aug. 3, 1939, ch. 411, 53 Stat. 1177.) REFERENCES IN TEXT The Securities Act of 1933, referred to in the text, is classified to section 77a et seq. of this title, which is subchapter I of this chapter. The Securities Exchange Act of 1934, referred to in the text, is classified to section 78a et seq. of this title and to sections 77b-77e, 77j, 77k, 77m, 770 and 77s of this title. The Public Utility Holding Company Act of 1935, referred to in the text, is classified to section 79 et seq. of this title. TRANSFER OF FUNCTIONS All executive and administrative functions of the Securities and Exchange Commission were, with certain exceptions, transferred to the Chairman of such Commission, with authority vested in him to authorize their 78n. 780. Proxies. Over-the-counter markets; registration of brokers; information and reports. 780-1. Brokers deemed to be registered. 780-2. Liabilities arising prior to amendment unaffected. 780-3. Over-the-counter brokers' and dealers' associations; registration. (a) Association registration; national or affiliated; data. (b) Prerequisites to national registration; association rules. (c) National association rules; provision for registration of affiliated securities association. (d) Registration as affiliated association; prerequisites; association rules. (e) Granting and denying registration; revocation of affiliated association registration. (f) Withdrawal from registration. (g) Review by Commission of adverse action (h) Commission's action upon findings. (1) Filing changes or additions to association This chapter in the original read, "This Act." The act was divided into two titles as follows: "Title I-Regulation of Securities Exchanges" and "Title II-Amendments to Securities Act of 1933." This section was section 1 of title I, which title is set out as sections 78a-781, 78m78c, and 780-3 to 78hh of this title. Title II of the act amended or repealed sections 77b-77e, 77j, 77k, 77m, 770, and 77s, and added sections 78i and 78jj of this title. Although these latter provisions were set out as a separate title, they were part of the act; hence, they are technically a part of the "Securities Exchange Act of 1934." CROSS REFERENCES Corporation of Foreign Bondholders Act, 1933, see section 77mm of this title. Investment Advisers Act of 1940, see section 80b-20 of this title. Investment Company Act of 1940, see section 80a-51 of this title. Public Utility Holding Company Act of 1935, see section 79 of this title. Securities Act of 1933, see section 77a of this title. Trust Indenture Act of 1939, see section 77aaa of this title. § 78b. Necessity for regulation. For the reasons hereinafter enumerated, transactions in securities as commonly conducted upon securities exchanges and over-the-counter markets are affected with a national public interest which makes it necessary to provide for regulation and control of such transactions and of practices and matters related thereto, including transactions by officers, directors, and principal security holders, to require appropriate reports, and to impose requirements necessary to make such regulation and control reasonably complete and effective, in order to protect interstate commerce, the national credit, the Federal taxing power, to protect and make more effective the national banking system and Federal Reserve System, and to insure the maintenance of fair and honest markets in such transactions: (1) Such transactions (a) are carried on in large volume by the public generally and in large part originate outside the States in which the exchanges and over-the-counter markets are located and/or are effected by means of the mails and instrumentalities of interstate commerce; (b) constitute an important part of the current of interstate commerce; (c) involve in large part the securities of issuers engaged in interstate commerce; (d) involve the use of credit, directly affect the financing of trade, industry, and transportation in interstate commerce, and directly affect and influence the volume of interstate commerce; and affect the national credit. (2) The prices established and offered in such transactions are generally disseminated and quoted throughout the United States and foreign countries and constitute a basis for determining and establishing the prices at which securities are bought and sold, the amount of certain taxes owing to the United States and to the several States by owners, buyers, and sellers of securities, and the value of collateral for bank loans. (3) Frequently the prices of securities on such exchanges and markets are susceptible to manipulation and control, and the dissemination of such prices gives rise to excessive speculation, resulting in sudden and unreasonable fluctuations in the prices of securities which (a) cause alternately unreasonable expansion and unreasonable contraction of the volume of credit available for trade, transportation, and industry in interstate commerce, (b) hinder the proper appraisal of the value of securities and thus prevent a fair calculation of taxes owing to the United States and to the several States by owners, buyers, and sellers of securities, and (c) prevent the fair valuation of collateral for bank loans and/or obstruct the effective operation of the national banking system and Federal Reserve System. (4) National emergencies, which produce widespread unemployment and the dislocation of trade, transportation, and industry, and which burden interstate commerce and adversely affect the general welfare, are precipitated, intensified, and prolonged by manipulation and sudden and unreasonable fluctuations of security prices and by excessive speculation on such exchanges and markets, and to meet such emergencies the Federal Government is put to such great expense as to burden the national credit. (June 6, 1934, ch. 404, § 2, 48 Stat. 881.) CROSS REFERENCES Findings and declaration of policy under Investment Company Act of 1940, see section 80a-1 of this title. Findings under Investment Advisers Act of 1940, see section 80b-1 of this title. Necessity for Control of holding companies, see section 79a of this title. Regulation under Trust Indenture Act of 1939, see section 77bbb of this title. § 78c. Definitions and application—(a) Definitions. When used in this chapter, unless the context otherwise requires― (1) The term “exchange” means any organization, association, or group of persons, whether incorporated or unincorporated, which constitutes, maintains, or provides a market place or facilities for bringing together purchasers and sellers of securities or for otherwise performing with respect to securities the functions commonly performed by a stock exchange as that term is generally understood, and includes the market place and the market facilities maintained by such exchange. (2) The term "facility" when used with respect to an exchange includes its premises, tangible or intangible property whether on the premises or not, any right to the use of such premises or property or any service thereof for the purpose of effecting or reporting a transaction on an exchange (including, among other things, any system of communication to or from the exchange, by ticker or otherwise, maintained by or with the consent of the exchange), and any right of the exchange to the use of any property or service. (3) The term "member" when used with respect to an exchange means any person who is permitted either to effect transactions on the exchange without the services of another person acting as broker, or to make use of the facilities of an exchange for transactions thereon without payment of a commission or fee or with the payment of a commission or fee which is less than that charged the general public, and includes any firm transacting a business as broker or dealer of which a member is a partner, and any partner of any such firm. (4) The term "broker" means any person engaged in the business of effecting transactions in securities for the account of others, but does not include a bank. |