TITLE VI - COMMISSION RESOURCES AND AUTHORITY
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 uncondition-
ally, 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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