SEC explains penalties framework
WASHINGTON, DC – The Securities and Exchange Commission (SEC) has issued a statement clarifying its penalty authority and how the civil monetary penalties slapped on companies that violate securities law will be used.
Drawing its authority primarily from the Remedies Act of 1990, the Commission is permitted to seek civil money penalties in enforcement cases involving entities, including corporate issuers of securities. The collected money always went to the Treasury.
But the Sarbanes-Oxley act of 2002, in its Fair Funds provisions, changed the ultimate disposition of penalties, allowing the commission to use penalties paid by individuals and entities in enforcement actions to repay victims of securities
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