Newsletters

Criminal Liability of Corporate Officers

Under Section 807 of The Sarbanes-Oxley Act of 2002 (Act),1 any person who knowingly commits securities fraud is subject to a hefty fine, a prison term of up to 25 years, or both. Section 807 does not criminalize securities laws violations for the first time; however, it does combine several existing laws so as to facilitate and streamline federal prosecutions. Section 807 does impose significantly harsher criminal penalties than the penalties prescribed under prior laws.

Monopolization Under the Sherman Act

Section 2 of the Sherman Act, 15 U.S.C.S. § 2, prohibits monopolies and attempts or conspiracies to monopolize. The statute provides for prison terms and fines in actions brought by the U.S. Department Justice and for injunctions and damages in civil actions brought by the Department of Justice, states, and private parties.

An Introduction to the Securities Exchange Act of 1934

In response to the stock market crash of 1929, Congress enacted the Securities Act of 1933 and the Securities Exchange Act of 1934. While the Securities Act governed the issuance of securities, the Securities Exchange Act regulated trading in the securities.

Section 31 or SEC Transaction Fees

Under Section 31 of the Securities Exchange Act of 1934, 15 U.S.C.S. § 78ee, the Securities and Exchange Commission recovers costs of regulating securities markets and transactions. Section 31 fees, which exceeded $1 billion in 2004, are "designed to recover the costs to the Government of the supervision and regulation of securities markets and securities professionals, and costs related to such supervision and regulation, including enforcement activities, policy and rulemaking activities, administration, legal services, and international regulatory activities." 15 U.S.C.S. § 78ee(a).

Securities Trading Halts, Delays, and Suspensions

The Securities and Exchange Commission may suspend trading in a security for up to ten days. Securities exchanges such as the New York and American Stock Exchanges and Nasdaq may delay trading in a security at the beginning of a trading day or halt trading in a security during the trading day.