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119th Congress

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119th Congress

Title 15 — Commerce and Trade

Chapter 2B — Securities Exchanges

§ 78i. Manipulation of security prices

Statutory text

(a)

Transactions relating to purchase or sale of security

It shall be unlawful for any person, directly or indirectly, by the use of the mails or any means or instrumentality of interstate commerce, or of any facility of any national securities exchange, or for any member of a national securities exchange—

(1)

For the purpose of creating a false or misleading appearance of active trading in any security other than a government security, or a false or misleading appearance with respect to the market for any such security, (A) to effect any transaction in such security which involves no change in the beneficial ownership thereof, or (B) to enter an order or orders for the purchase of such security with the knowledge that an order or orders of substantially the same size, at substantially the same time, and at substantially the same price, for the sale of any such security, has been or will be entered by or for the same or different parties, or (C) to enter any order or orders for the sale of any such security with the knowledge that an order or orders of substantially the same size, at substantially the same time, and at substantially the same price, for the purchase of such security, has been or will be entered by or for the same or different parties.

(2)

To effect, alone or with 1 or more other persons, a series of transactions in any security registered on a national securities exchange, any security not so registered, or in connection with any security-based swap or security-based swap agreement with respect to such security creating actual or apparent active trading in such security, or raising or depressing the price of such security, for the purpose of inducing the purchase or sale of such security by others.

(3)

If a dealer, broker, security-based swap dealer, major security-based swap participant, or other person selling or offering for sale or purchasing or offering to purchase the security, a security-based swap, or a security-based swap agreement with respect to such security, to induce the purchase or sale of any security registered on a national securities exchange, any security not so registered, any security-based swap, or any security-based swap agreement with respect to such security by the circulation or dissemination in the ordinary course of business of information to the effect that the price of any such security will or is likely to rise or fall because of market operations of any 1 or more persons conducted for the purpose of raising or depressing the price of such security.

(4)

If a dealer, broker, security-based swap dealer, major security-based swap participant, or other person selling or offering for sale or purchasing or offering to purchase the security, a security-based swap, or security-based swap agreement with respect to such security, to make, regarding any security registered on a national securities exchange, any security not so registered, any security-based swap, or any security-based swap agreement with respect to such security, for the purpose of inducing the purchase or sale of such security, such security-based swap, or such security-based swap agreement any statement which 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, and which that person knew or had reasonable ground to believe was so false or misleading.

(5)

For a consideration, received directly or indirectly from a broker, dealer, security-based swap dealer, major security-based swap participant, or other person selling or offering for sale or purchasing or offering to purchase the security, a security-based swap, or security-based swap agreement with respect to such security, to induce the purchase of any security registered on a national securities exchange, any security not so registered, any security-based swap, or any security-based swap agreement with respect to such security by the circulation or dissemination of information to the effect that the price of any such security will or is likely to rise or fall because of the market operations of any 1 or more persons conducted for the purpose of raising or depressing the price of such security.

(6)

To effect either alone or with one or more other persons any series of transactions for the purchase and/or sale of any security other than a government security for the purpose of pegging, fixing, or stabilizing the price of such security in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors.

(b)

Transactions relating to puts, calls, straddles, options, futures, or security-based swaps

It shall be unlawful for any person to effect, in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors—

(1)

any transaction in connection with any security whereby any party to such transaction acquires—

(A)

any put, call, straddle, or other option or privilege of buying the security from or selling the security to another without being bound to do so;

(B)

any security futures product on the security; or

(C)

any security-based swap involving the security or the issuer of the security;

(2)

any transaction in connection with any security with relation to which such person has, directly or indirectly, any interest in any—

(A)

such put, call, straddle, option, or privilege;

(B)

such security futures product; or

(C)

such security-based swap; or

(3)

any transaction in any security for the account of any person who such person has reason to believe has, and who actually has, directly or indirectly, any interest in any—

(A)

such put, call, straddle, option, or privilege;

(B)

such security futures product with relation to such security; or

(C)

any security-based swap involving such security or the issuer of such security.

(c)

Endorsement or guarantee of puts, calls, straddles, or options

It shall be unlawful for any broker, dealer, or member of a national securities exchange directly or indirectly to endorse or guarantee the performance of any put, call, straddle, option, or privilege in relation to any security other than a government security, in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors.

(d)

Transactions relating to short sales of securities

It shall be unlawful for any person, directly or indirectly, by the use of the mails or any means or instrumentality of interstate commerce, or of any facility of any national securities exchange, or for any member of a national securities exchange to effect, alone or with one or more other persons, a manipulative short sale of any security. The Commission shall issue such other rules as are necessary or appropriate to ensure that the appropriate enforcement options and remedies are available for violations of this subsection in the public interest or for the protection of investors.

(e)

Registered warrant, right, or convertible security not included in “put”, “call”, “straddle”, or “option”

The terms “put”, “call”, “straddle”, “option”, or “privilege” as used in this section shall not include any registered warrant, right, or convertible security.

(f)

Persons liable; suits at law or in equity

Any person who willfully participates in any act or transaction in violation of subsections (a), (b), or (c) of this section, shall be liable to any person who shall purchase or sell any security at a price which was affected by such act or transaction, and the person so injured may sue in law or in equity in any court of competent jurisdiction to recover the damages sustained as a result of any such act or transaction. 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. Every person who becomes liable to make any payment under this subsection may recover contribution as in cases of contract from any person who, if joined in the original suit, would have been liable to make the same payment. 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 violation and within three years after such violation.

(g)

Subsection (a) not applicable to exempted securities

The provisions of subsection (a) shall not apply to an exempted security.

(h)

Foreign currencies and security futures products

(1)

Notwithstanding any other provision of law, the Commission shall have the authority to regulate the trading of any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency (but not, with respect to any of the foregoing, an option on a contract for future delivery other than a security futures product).

(2)

Notwithstanding the Commodity Exchange Act [7 U.S.C. 1 et seq.], the Commission shall have the authority to regulate the trading of any security futures product to the extent provided in the securities laws.

(i)

Limitations on practices that affect market volatility

It shall be unlawful for any person, by the use of the mails or any means or instrumentality of interstate commerce or of any facility of any national securities exchange, to use or employ any act or practice in connection with the purchase or sale of any equity security in contravention of such rules or regulations as the Commission may adopt, consistent with the public interest, the protection of investors, and the maintenance of fair and orderly markets—

(1)

to prescribe means reasonably designed to prevent manipulation of price levels of the equity securities market or a substantial segment thereof; and

(2)

to prohibit or constrain, during periods of extraordinary market volatility, any trading practice in connection with the purchase or sale of equity securities that the Commission determines (A) has previously contributed significantly to extraordinary levels of volatility that have threatened the maintenance of fair and orderly markets; and (B) is reasonably certain to engender such levels of volatility if not prohibited or constrained.

In adopting rules under paragraph (2), the Commission shall, consistent with the purposes of this subsection, minimize the impact on the normal operations of the market and a natural person’s freedom to buy or sell any equity security.

(j)

 1 Limitation on Commission authority

The authority of the Commission under this section with respect to security-based swap agreements shall be subject to the restrictions and limitations of section 78c–1(b) of this title.

(j)

 1 Regulations relating to security-based swaps

It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce or of the mails, or of any facility of any national securities exchange, to effect any transaction in, or to induce or attempt to induce the purchase or sale of, any security-based swap, in connection with which such person engages in any fraudulent, deceptive, or manipulative act or practice, makes any fictitious quotation, or engages in any transaction, practice, or course of business which operates as a fraud or deceit upon any person. The Commission shall, for the purposes of this subsection, by rules and regulations define, and prescribe means reasonably designed to prevent, such transactions, acts, practices, and courses of business as are fraudulent, deceptive, or manipulative, and such quotations as are fictitious.

Footnotes

  1. 1 So in original. Two subsecs. (j) have been enacted.

Legislative history

Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.

  1. Pub. L. 73–404 · 48 Stat. 881

    Enacted · 15 U.S.C. § 78i

    June 6, 1934, ch. 404, title I, § 9, 48 Stat. 889

    Source evidence

    Code source credit
    June 6, 1934, ch. 404, title I, § 9, 48 Stat. 889

  2. Pub. L. 97–303 § 3(1) · 96 Stat. 1409

    Substituted · 15 U.S.C. § 78i(f)

    Pub. L. 97–303, § 3(1), substituted “The provisions of subsection (a) shall not apply” for “The provisions of this section shall not apply”

    Source evidence

    Code amendment note
    Subsec. (f). Pub. L. 97–303, § 3(1), substituted “The provisions of subsection (a) shall not apply” for “The provisions of this section shall not apply”.

    Enacted provision · exact public law section
    (1) by striking out “this section” in subsection (f) and inserting in lieu thereof “subsection (a)”; and

  3. Pub. L. 97–303 § 3(2) · 96 Stat. 1409

    Added · 15 U.S.C. § 78i(g)

    Pub. L. 97–303, § 3(2), added subsec. (g)

    Source evidence

    Code amendment note
    Subsec. (g). Pub. L. 97–303, § 3(2), added subsec. (g).

    Enacted provision · exact public law section
    (2) by inserting after subsection (f) the following new subsection: Authority to regulate trading. “(g) Notwithstanding any other provision of law, the Commission shall have the authority to regulate the trading of any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency (but not, with respect to any of the foregoing, an option on a contract for future delivery).”.

  4. Market Reform Act of 1990

    Pub. L. 101–432 § 6(a) · 104 Stat. 963

    Added · 15 U.S.C. § 78i(h)

    Pub. L. 101–432 added subsec. (h)

    Source evidence

    Code amendment note
    Subsec. (h). Pub. L. 101–432 added subsec. (h).

    Enacted provision · exact public law section
    (a) In General.— Section 9 of the Securities Exchange Act of 1934 (15 U.S.C. 78i) is amended by adding at the end thereof the following new subsection: “(h) Limitations on Practices That Affect Market Volatility.— It shall be unlawful for any person, by the use of the mails or any means or instrumentality of interstate commerce or of any facility of any national securities exchange, to use or employ any act or practice in connection with the purchase or sale of any equity security in contravention of such rules or regulations as the Commission may adopt, consistent with the public interest, the protection of investors, and the maintenance of fair and orderly markets— “(1) to prescribe means reasonably designed to prevent manipulation of price levels of the equity securities market or a substantial segment thereof; and “(2) to prohibit or constrain, during periods of extraordinary market volatility, any trading practice in connection with the purchase or sale of equity securities that the Commission determines (A) has previously contributed significantly to extraordinary levels of volatility that have threatened the maintenance of fair and orderly markets; and (B) is reasonably certain to engender such levels of volatility if not prohibited or constrained. In adopting rules under paragraph (2), the Commission shall, consistent with the purposes of this subsection, minimize the impact on the normal operations of the market and a natural person’s freedom to buy or sell any equity security.”.

  5. Consolidated Appropriations Act, 2001

    Pub. L. 106–554 § 1(a)(5)(tIII)(s303)(b) · 114 Stat. 2763

    Amended · 15 U.S.C. § 78i(a)(2)(5)

    Pub. L. 106–554, § 1(a)(5) [title III, § 303(b)], amended pars. (2) to (5) generally. Prior to amendment, pars. (2) to (5) read as follows:

    Source evidence

    Code amendment note
    Subsec. (a)(2) to (5). Pub. L. 106–554, § 1(a)(5) [title III, § 303(b)], amended pars. (2) to (5) generally. Prior to amendment, pars. (2) to (5) read as follows:

    “(2) To effect, alone or with one or more other persons, a series of transactions in any security registered on a national securities exchange creating actual or apparent active trading in such security or raising or depressing the price of such security, for the purpose of inducing the purchase or sale of such security by others. “(3) If a dealer or broker, or other person selling or offering for sale or purchasing or offering to purchase the security, to induce the purchase or sale of any security registered on a national securities exchange by the circulation or dissemination in the ordinary course of business of information to the effect that the price of any such security will or is likely to rise or fall because of market operations of any one or more persons conducted for the purpose of raising or depressing the prices of such security. “(4) If a dealer or broker, or other person selling or offering for sale or purchasing or offering to purchase the security, to make, regarding any security registered on a national securities exchange, for the purpose of inducing the purchase or sale of such security, any statement which 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, and which he knew or had reasonable ground to believe was so false or misleading. “(5) For a consideration, received directly or indirectly from a dealer or broker, or other person selling or offering for sale or purchasing or offering to purchase the security, to induce the purchase or sale of any security registered on a national securities exchange by the circulation or dissemination of information to the effect that the price of any such security will or is likely to rise or fall because of the market operations of any one or more persons conducted for the purpose of raising or depressing the price of such security.”

    Enacted provision · exact public law section
    (5) H.R. 5660, as introduced on December 14, 2000.

  6. Consolidated Appropriations Act, 2001

    Pub. L. 106–554 § 1(a)(5)(tII)(s205)(a)(1)(A) · 114 Stat. 2763

    1. Inserted · 15 U.S.C. § 78i(b)(1)

      Pub. L. 106–554, § 1(a)(5) [title II, § 205(a)(1)(A)], inserted “(A)” after “acquires”

    2. Substituted · 15 U.S.C. § 78i(b)(1)

      Pub. L. 106–554, § 1(a)(5) [title II, § 205(a)(1)(A)], substituted “; or (B) any security futures product on the security; or” for “; or”

    Source evidence

    Code amendment note
    Subsec. (b)(1). Pub. L. 106–554, § 1(a)(5) [title II, § 205(a)(1)(A)], inserted “(A)” after “acquires” and substituted “; or (B) any security futures product on the security; or” for “; or”.

    Enacted provision · exact public law section
    (5) H.R. 5660, as introduced on December 14, 2000.

  7. Consolidated Appropriations Act, 2001

    Pub. L. 106–554 § 1(a)(5)(tII)(s205)(a)(1)(B) · 114 Stat. 2763

    1. Inserted · 15 U.S.C. § 78i(b)(2)

      Pub. L. 106–554, § 1(a)(5) [title II, § 205(a)(1)(B)], inserted “(A)” after “interest in any”

    2. Substituted · 15 U.S.C. § 78i(b)(2)

      Pub. L. 106–554, § 1(a)(5) [title II, § 205(a)(1)(B)], substituted “; or (B) such security futures product; or” for “; or”

    Source evidence

    Code amendment note
    Subsec. (b)(2). Pub. L. 106–554, § 1(a)(5) [title II, § 205(a)(1)(B)], inserted “(A)” after “interest in any” and substituted “; or (B) such security futures product; or” for “; or”.

    Enacted provision · exact public law section
    (5) H.R. 5660, as introduced on December 14, 2000.

  8. Consolidated Appropriations Act, 2001

    Pub. L. 106–554 § 1(a)(5)(tII)(s205)(a)(1)(C) · 114 Stat. 2763

    Inserted · 15 U.S.C. § 78i(b)(3)

    Pub. L. 106–554, § 1(a)(5) [title II, § 205(a)(1)(C)], inserted “(A)” after “interest in any” and “; or (B) such security futures product” after “privilege”

    Source evidence

    Code amendment note
    Subsec. (b)(3). Pub. L. 106–554, § 1(a)(5) [title II, § 205(a)(1)(C)], inserted “(A)” after “interest in any” and “; or (B) such security futures product” after “privilege”.

    Enacted provision · exact public law section
    (5) H.R. 5660, as introduced on December 14, 2000.

  9. Consolidated Appropriations Act, 2001

    Pub. L. 106–554 § 1(a)(5)(tII)(s205)(a)(2) · 114 Stat. 2763

    1. Amended · 15 U.S.C. § 78i(g)

      Pub. L. 106–554, § 1(a)(5) [title II, § 205(a)(2)], designated existing provisions as par. (1)

    2. Inserted · 15 U.S.C. § 78i(g)

      Pub. L. 106–554, § 1(a)(5) [title II, § 205(a)(2)], inserted “other than a security futures product” after “future delivery”

    3. Added · 15 U.S.C. § 78i(g)

      Pub. L. 106–554, § 1(a)(5) [title II, § 205(a)(2)], added par. (2)

    Source evidence

    Code amendment note
    Subsec. (g). Pub. L. 106–554, § 1(a)(5) [title II, § 205(a)(2)], designated existing provisions as par. (1), inserted “other than a security futures product” after “future delivery”, and added par. (2).

    Enacted provision · exact public law section
    (5) H.R. 5660, as introduced on December 14, 2000.

  10. Consolidated Appropriations Act, 2001

    Pub. L. 106–554 § 1(a)(5)(tIII)(s303)(c) · 114 Stat. 2763

    Added · 15 U.S.C. § 78i(i)

    Pub. L. 106–554, § 1(a)(5) [title III, § 303(c)], added subsec. (i)

    Source evidence

    Code amendment note
    Subsec. (i). Pub. L. 106–554, § 1(a)(5) [title III, § 303(c)], added subsec. (i).

    Enacted provision · exact public law section
    (5) H.R. 5660, as introduced on December 14, 2000.

  11. Investor Protection and Securities Reform Act of 2010

    Pub. L. 111–203 § 929L(1)(A) · 124 Stat. 1376

    Substituted · 15 U.S.C. § 78i(a)

    Pub. L. 111–203, § 929L(1)(A), substituted “other than a government security” for “registered on a national securities exchange” wherever appearing

    Source evidence

    Code amendment note
    Subsec. (a). Pub. L. 111–203, § 929L(1)(A), substituted “other than a government security” for “registered on a national securities exchange” wherever appearing.

    Enacted provision · exact public law section
    (A) by striking “registered on a national securities exchange” each place that term appears and inserting “other than a government security”;

    Effective date note
    Amendment by sections 929L(1) and 929X(b) of Pub. L. 111–203 effective 1 day after July 21, 2010, except as otherwise provided, see section 4 of Pub. L. 111–203, set out as an Effective Date note under section 5301 Title 12, Banks and Banking. Amendment by sections 762(d)(2) and 763(f), (g) of Pub. L. 111–203 effective on the later of 360 days after July 21, 2010, or, to the extent a provision of subtitle B (§§ 761–774) of title VII of Pub. L. 111–203 requires a rulemaking, not less than 60 days after publication of the final rule or regulation implementing such provision of subtitle B, see section 774 of Pub. L. 111–203, set out as a note under section 77b of this title.

  12. Wall Street Transparency and Accountability Act of 2010

    Pub. L. 111–203 § 762(d)(2)(A) · 124 Stat. 1376

    1. Added · 15 U.S.C. § 78i(a)(2)(5)

      Pub. L. 111–203, § 762(d)(2)(A), added pars. (2) to (5)

    2. Struck · 15 U.S.C. § 78i(a)(2)(5)

      Pub. L. 111–203, § 762(d)(2)(A), struck out former pars. (2) to (5) which prohibited certain actions in the purchase or sale of a security or a security-based swap agreement, such as making false or misleading statements or creating conditions to raise or depress the price of such security

    Source evidence

    Code amendment note
    Subsec. (a)(2) to (5). Pub. L. 111–203, § 762(d)(2)(A), added pars. (2) to (5) and struck out former pars. (2) to (5) which prohibited certain actions in the purchase or sale of a security or a security-based swap agreement, such as making false or misleading statements or creating conditions to raise or depress the price of such security.

    Enacted provision · exact public law section
    (A) in subsection (a), by striking paragraphs (2) through (5) and inserting the following: “(2) To effect, alone or with 1 or more other persons, a series of transactions in any security registered on a national securities exchange, any security not so registered, or in connection with any security-based swap or security-based swap agreement with respect to such security creating actual or apparent active trading in such security, or raising or depressing the price of such security, for the purpose of inducing the purchase or sale of such security by others. “(3) If a dealer, broker, security-based swap dealer, major security-based swap participant, or other person selling or offering for sale or purchasing or offering to purchase the security, a security-based swap, or a security-based swap agreement with respect to such security, to induce the purchase or sale of any security registered on a national securities exchange, any security not so registered, any security-based swap, or any security-based swap agreement with respect to such security by the circulation or dissemination in the ordinary course of business of information to the effect that the price of any such security will or is likely to rise or fall because of market operations of any 1 or more persons conducted for the purpose of raising or depressing the price of such security. “(4) If a dealer, broker, security-based swap dealer, major security-based swap participant, or other person selling or offering for sale or purchasing or offering to purchase the security, a security-based swap, or security-based swap agreement with respect to such security, to make, regarding any security registered on a national securities exchange, any security not so registered, any security-based swap, or any security-based swap agreement with respect to such security, for the purpose of inducing the purchase or sale of such security, such security-based swap, or such security-based swap agreement any statement which 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, and which that person knew or had reasonable ground to believe was so false or misleading. “(5) For a consideration, received directly or indirectly from a broker, dealer, security-based swap dealer, major security-based swap participant, or other person selling or offering for sale or purchasing or offering to purchase the security, a security-based swap, or security-based swap agreement with respect to such security, to induce the purchase of any security registered on a national securities exchange, any security not so registered, any security-based swap, or any security-based swap agreement with respect to such security by the circulation or dissemination of information to the effect that the price of any such security will or is likely to rise or fall because of the market operations of any 1 or more persons conducted for the purpose of raising or depressing the price of such security.” ; and

    Effective date note
    Amendment by sections 929L(1) and 929X(b) of Pub. L. 111–203 effective 1 day after July 21, 2010, except as otherwise provided, see section 4 of Pub. L. 111–203, set out as an Effective Date note under section 5301 Title 12, Banks and Banking. Amendment by sections 762(d)(2) and 763(f), (g) of Pub. L. 111–203 effective on the later of 360 days after July 21, 2010, or, to the extent a provision of subtitle B (§§ 761–774) of title VII of Pub. L. 111–203 requires a rulemaking, not less than 60 days after publication of the final rule or regulation implementing such provision of subtitle B, see section 774 of Pub. L. 111–203, set out as a note under section 77b of this title.

  13. Investor Protection and Securities Reform Act of 2010

    Pub. L. 111–203 § 929L(1)(B) · 124 Stat. 1376

    Struck · 15 U.S.C. § 78i(b)

    Pub. L. 111–203, § 929L(1)(B), struck out “by use of any facility of a national securities exchange,” after “effect,” in introductory provisions

    Source evidence

    Code amendment note
    Subsec. (b). Pub. L. 111–203, § 929L(1)(B), struck out “by use of any facility of a national securities exchange,” after “effect,” in introductory provisions.

    Enacted provision · exact public law section
    (B) in subsection (b), by striking “by use of any facility of a national securities exchange,”; and

    Effective date note
    Amendment by sections 929L(1) and 929X(b) of Pub. L. 111–203 effective 1 day after July 21, 2010, except as otherwise provided, see section 4 of Pub. L. 111–203, set out as an Effective Date note under section 5301 Title 12, Banks and Banking. Amendment by sections 762(d)(2) and 763(f), (g) of Pub. L. 111–203 effective on the later of 360 days after July 21, 2010, or, to the extent a provision of subtitle B (§§ 761–774) of title VII of Pub. L. 111–203 requires a rulemaking, not less than 60 days after publication of the final rule or regulation implementing such provision of subtitle B, see section 774 of Pub. L. 111–203, set out as a note under section 77b of this title.

  14. Wall Street Transparency and Accountability Act of 2010

    Pub. L. 111–203 § 763(f) · 124 Stat. 1376

    1. Added · 15 U.S.C. § 78i(b)(1)(3)

      Pub. L. 111–203, § 763(f), added pars. (1) to (3)

    2. Struck · 15 U.S.C. § 78i(b)(1)(3)

      Pub. L. 111–203, § 763(f), struck out former pars. (1) to (3) which read as follows:

    Source evidence

    Code amendment note
    Subsec. (b)(1) to (3). Pub. L. 111–203, § 763(f), added pars. (1) to (3) and struck out former pars. (1) to (3) which read as follows:

    “(1) any transaction in connection with any security whereby any party to such transaction acquires (A) any put, call, straddle, or other option or privilege of buying the security from or selling the security to another without being bound to do so; or (B) any security futures product on the security; or “(2) any transaction in connection with any security with relation to which he has, directly or indirectly, any interest in any (A) such put, call, straddle, option, or privilege; or (B) such security futures product; or “(3) any transaction in any security for the account of any person who he has reason to believe has, and who actually has, directly or indirectly, any interest in any (A) such put, call, straddle, option, or privilege; or (B) such security futures product with relation to such security.”

    Enacted provision · exact public law section
    (f) Additions of Security-based Swaps to Certain Enforcement Provisions.— Section 9(b) of the Securities Exchange Act of 1934 (15 U.S.C. 78i(b)) is amended by striking paragraphs (1) through (3) and inserting the following: “(1) any transaction in connection with any security whereby any party to such transaction acquires— “(A) any put, call, straddle, or other option or privilege of buying the security from or selling the security to another without being bound to do so; “(B) any security futures product on the security; or “(C) any security-based swap involving the security or the issuer of the security; “(2) any transaction in connection with any security with relation to which such person has, directly or indirectly, any interest in any— “(A) such put, call, straddle, option, or privilege; “(B) such security futures product; or “(C) such security-based swap; or “(3) any transaction in any security for the account of any person who such person has reason to believe has, and who actually has, directly or indirectly, any interest in any— “(A) such put, call, straddle, option, or privilege; “(B) such security futures product with relation to such security; or “(C) any security-based swap involving such security or the issuer of such security.” .

    Effective date note
    Amendment by sections 929L(1) and 929X(b) of Pub. L. 111–203 effective 1 day after July 21, 2010, except as otherwise provided, see section 4 of Pub. L. 111–203, set out as an Effective Date note under section 5301 Title 12, Banks and Banking. Amendment by sections 762(d)(2) and 763(f), (g) of Pub. L. 111–203 effective on the later of 360 days after July 21, 2010, or, to the extent a provision of subtitle B (§§ 761–774) of title VII of Pub. L. 111–203 requires a rulemaking, not less than 60 days after publication of the final rule or regulation implementing such provision of subtitle B, see section 774 of Pub. L. 111–203, set out as a note under section 77b of this title.

  15. Investor Protection and Securities Reform Act of 2010

    Pub. L. 111–203 § 929L(1)(C) · 124 Stat. 1376

    Inserted · 15 U.S.C. § 78i(c)

    Pub. L. 111–203, § 929L(1)(C), inserted “broker, dealer, or” after “unlawful for any”

    Source evidence

    Code amendment note
    Subsec. (c). Pub. L. 111–203, § 929L(1)(C), inserted “broker, dealer, or” after “unlawful for any”.

    Enacted provision · exact public law section
    (C) in subsection (c), by inserting after “unlawful for any” the following: “broker, dealer, or”;

    Effective date note
    Amendment by sections 929L(1) and 929X(b) of Pub. L. 111–203 effective 1 day after July 21, 2010, except as otherwise provided, see section 4 of Pub. L. 111–203, set out as an Effective Date note under section 5301 Title 12, Banks and Banking. Amendment by sections 762(d)(2) and 763(f), (g) of Pub. L. 111–203 effective on the later of 360 days after July 21, 2010, or, to the extent a provision of subtitle B (§§ 761–774) of title VII of Pub. L. 111–203 requires a rulemaking, not less than 60 days after publication of the final rule or regulation implementing such provision of subtitle B, see section 774 of Pub. L. 111–203, set out as a note under section 77b of this title.

  16. Investor Protection and Securities Reform Act of 2010

    Pub. L. 111–203 § 929L(1)(A) · 124 Stat. 1376

    Substituted · 15 U.S.C. § 78i(c)

    Pub. L. 111–203, § 929L(1)(A), substituted “other than a government security” for “registered on a national securities exchange”

    Target inherited from the preceding amendment note.

    Source evidence

    Code amendment note
    Pub. L. 111–203, § 929L(1)(A), substituted “other than a government security” for “registered on a national securities exchange”.

    Enacted provision · exact public law section
    (A) by striking “registered on a national securities exchange” each place that term appears and inserting “other than a government security”;

    Effective date note
    Amendment by sections 929L(1) and 929X(b) of Pub. L. 111–203 effective 1 day after July 21, 2010, except as otherwise provided, see section 4 of Pub. L. 111–203, set out as an Effective Date note under section 5301 Title 12, Banks and Banking. Amendment by sections 762(d)(2) and 763(f), (g) of Pub. L. 111–203 effective on the later of 360 days after July 21, 2010, or, to the extent a provision of subtitle B (§§ 761–774) of title VII of Pub. L. 111–203 requires a rulemaking, not less than 60 days after publication of the final rule or regulation implementing such provision of subtitle B, see section 774 of Pub. L. 111–203, set out as a note under section 77b of this title.

  17. Investor Protection and Securities Reform Act of 2010

    Pub. L. 111–203 § 929X(b) · 124 Stat. 1376

    1. Added · 15 U.S.C. § 78i(d)(i)

      Pub. L. 111–203, § 929X(b), added subsec. (d)

    2. Redesignated · 15 U.S.C. § 78i(d)(i)

      Pub. L. 111–203, § 929X(b), redesignated former subsecs. (d) to (h) as (e) to (i), respectively. Former subsec. (i), relating to limitation on Commission authority

    3. Redesignated · 15 U.S.C. § 78i(d)(i)

      Pub. L. 111–203, § 929X(b), redesignated (j)

    Source evidence

    Code amendment note
    Subsecs. (d) to (i). Pub. L. 111–203, § 929X(b), added subsec. (d) and redesignated former subsecs. (d) to (h) as (e) to (i), respectively. Former subsec. (i), relating to limitation on Commission authority, redesignated (j).

    Enacted provision · exact public law section
    (b) Short Selling Enforcement.— Section 9 of the Securities Exchange Act of 1934 (15 U.S.C. 78i) is amended— (1) by redesignating subsections (d), (e), (f), (g), (h), and (i) as subsections (e), (f), (g), (h), (i), and (j), respectively; and (2) inserting after subsection (c), the following new subsection: “(d) Transactions Relating to Short Sales of Securities.— It shall be unlawful for any person, directly or indirectly, by the use of the mails or any means or instrumentality of interstate commerce, or of any facility of any national securities exchange, or for any member of a national securities exchange to effect, alone or with one or more other persons, a manipulative short sale of any security. Regulations. The Commission shall issue such other rules as are necessary or appropriate to ensure that the appropriate enforcement options and remedies are available for violations of this subsection in the public interest or for the protection of investors.” .

    Effective date note
    Amendment by sections 929L(1) and 929X(b) of Pub. L. 111–203 effective 1 day after July 21, 2010, except as otherwise provided, see section 4 of Pub. L. 111–203, set out as an Effective Date note under section 5301 Title 12, Banks and Banking. Amendment by sections 762(d)(2) and 763(f), (g) of Pub. L. 111–203 effective on the later of 360 days after July 21, 2010, or, to the extent a provision of subtitle B (§§ 761–774) of title VII of Pub. L. 111–203 requires a rulemaking, not less than 60 days after publication of the final rule or regulation implementing such provision of subtitle B, see section 774 of Pub. L. 111–203, set out as a note under section 77b of this title.

  18. Investor Protection and Securities Reform Act of 2010

    Pub. L. 111–203 § 929X(b)(1) · 124 Stat. 1376

    Redesignated · 15 U.S.C. § 78i(j)

    Pub. L. 111–203, § 929X(b)(1), redesignated subsec. (i), relating to limitation on Commission authority, as (j)

    Source evidence

    Code amendment note
    Subsec. (j). Pub. L. 111–203, § 929X(b)(1), redesignated subsec. (i), relating to limitation on Commission authority, as (j).

    Enacted provision · exact public law section
    (1) by redesignating subsections (d), (e), (f), (g), (h), and (i) as subsections (e), (f), (g), (h), (i), and (j), respectively; and

    Effective date note
    Amendment by sections 929L(1) and 929X(b) of Pub. L. 111–203 effective 1 day after July 21, 2010, except as otherwise provided, see section 4 of Pub. L. 111–203, set out as an Effective Date note under section 5301 Title 12, Banks and Banking. Amendment by sections 762(d)(2) and 763(f), (g) of Pub. L. 111–203 effective on the later of 360 days after July 21, 2010, or, to the extent a provision of subtitle B (§§ 761–774) of title VII of Pub. L. 111–203 requires a rulemaking, not less than 60 days after publication of the final rule or regulation implementing such provision of subtitle B, see section 774 of Pub. L. 111–203, set out as a note under section 77b of this title.

  19. Wall Street Transparency and Accountability Act of 2010

    Pub. L. 111–203 § 763(g) · 124 Stat. 1376

    Added · 15 U.S.C. § 78i(j)

    Pub. L. 111–203, § 763(g), added subsec. (j) relating to regulations relating to security-based swaps

    Target inherited from the preceding amendment note.

    Source evidence

    Code amendment note
    Pub. L. 111–203, § 763(g), added subsec. (j) relating to regulations relating to security-based swaps.

    Enacted provision · exact public law section
    (g) Rulemaking Authority To Prevent Fraud, Manipulation and Deceptive Conduct in Security-based Swaps.— Section 9 of the Securities Exchange Act of 1934 (15 U.S.C. 78i) is amended by adding at the end the following: “(j) It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce or of the mails, or of any facility of any national securities exchange, to effect any transaction in, or to induce or attempt to induce the purchase or sale of, any security-based swap, in connection with which such person engages in any fraudulent, deceptive, or manipulative act or practice, makes any fictitious quotation, or engages in any transaction, practice, or course of business which operates as a fraud or deceit upon any person. Regulations. The Commission shall, for the purposes of this subsection, by rules and regulations define, and prescribe means reasonably designed to prevent, such transactions, acts, practices, and courses of business as are fraudulent, deceptive, or manipulative, and such quotations as are fictitious.” .

    Effective date note
    Amendment by sections 929L(1) and 929X(b) of Pub. L. 111–203 effective 1 day after July 21, 2010, except as otherwise provided, see section 4 of Pub. L. 111–203, set out as an Effective Date note under section 5301 Title 12, Banks and Banking. Amendment by sections 762(d)(2) and 763(f), (g) of Pub. L. 111–203 effective on the later of 360 days after July 21, 2010, or, to the extent a provision of subtitle B (§§ 761–774) of title VII of Pub. L. 111–203 requires a rulemaking, not less than 60 days after publication of the final rule or regulation implementing such provision of subtitle B, see section 774 of Pub. L. 111–203, set out as a note under section 77b of this title.

  20. Wall Street Transparency and Accountability Act of 2010

    Pub. L. 111–203 § 762(d)(2)(B) · 124 Stat. 1376

    Redesignated · 15 U.S.C. § 78i(j)

    Pub. L. 111–203, § 762(d)(2)(B), which directed amendment of subsec. (i) by striking out “(as defined in section 206B of the Gramm-Leach-Bliley Act)”, was executed by making the strike out after “security-based swap agreements” in subsec. (j) relating to limitation on Commission authority, to reflect the probable intent of Congress and the redesignation of subsec. (i) as (j) by Pub. L. 111–203, § 929X(b)(1). See above and Effective Date of 2010 Amendment notes below

    Target inherited from the preceding amendment note.

    Source evidence

    Code amendment note
    Pub. L. 111–203, § 762(d)(2)(B), which directed amendment of subsec. (i) by striking out “(as defined in section 206B of the Gramm-Leach-Bliley Act)”, was executed by making the strike out after “security-based swap agreements” in subsec. (j) relating to limitation on Commission authority, to reflect the probable intent of Congress and the redesignation of subsec. (i) as (j) by Pub. L. 111–203, § 929X(b)(1). See above and Effective Date of 2010 Amendment notes below.

    Enacted provision · exact public law section
    (B) in subsection (i), by striking “(as defined in section 206B of the Gramm-Leach-Bliley Act)”;

    Effective date note
    Amendment by sections 929L(1) and 929X(b) of Pub. L. 111–203 effective 1 day after July 21, 2010, except as otherwise provided, see section 4 of Pub. L. 111–203, set out as an Effective Date note under section 5301 Title 12, Banks and Banking. Amendment by sections 762(d)(2) and 763(f), (g) of Pub. L. 111–203 effective on the later of 360 days after July 21, 2010, or, to the extent a provision of subtitle B (§§ 761–774) of title VII of Pub. L. 111–203 requires a rulemaking, not less than 60 days after publication of the final rule or regulation implementing such provision of subtitle B, see section 774 of Pub. L. 111–203, set out as a note under section 77b of this title.

27 of 28 references resolved to an enrolled provision · 1 partial

Editorial Notes

References in Text

The Commodity Exchange Act, referred to in subsec. (h)(2), is act Sept. 21, 1922, ch. 369, 42 Stat. 998, which is classified generally to chapter 1 (§ 1 et seq.) of Title 7, Agriculture. For complete classification of this Act to the Code, see section 1 of Title 7 and Tables.

Amendments1982–2010 · 4 rounds

2010

Subsec. (a). Pub. L. 111–203, § 929L(1)(A), substituted “other than a government security” for “registered on a national securities exchange” wherever appearing.

Subsec. (a)(2) to (5). Pub. L. 111–203, § 762(d)(2)(A), added pars. (2) to (5) and struck out former pars. (2) to (5) which prohibited certain actions in the purchase or sale of a security or a security-based swap agreement, such as making false or misleading statements or creating conditions to raise or depress the price of such security.

Subsec. (b). Pub. L. 111–203, § 929L(1)(B), struck out “by use of any facility of a national securities exchange,” after “effect,” in introductory provisions.

Subsec. (b)(1) to (3). Pub. L. 111–203, § 763(f), added pars. (1) to (3) and struck out former pars. (1) to (3) which read as follows:

“(1) any transaction in connection with any security whereby any party to such transaction acquires (A) any put, call, straddle, or other option or privilege of buying the security from or selling the security to another without being bound to do so; or (B) any security futures product on the security; or

“(2) any transaction in connection with any security with relation to which he has, directly or indirectly, any interest in any (A) such put, call, straddle, option, or privilege; or (B) such security futures product; or

“(3) any transaction in any security for the account of any person who he has reason to believe has, and who actually has, directly or indirectly, any interest in any (A) such put, call, straddle, option, or privilege; or (B) such security futures product with relation to such security.”

Subsec. (c). Pub. L. 111–203, § 929L(1)(C), inserted “broker, dealer, or” after “unlawful for any”.

Pub. L. 111–203, § 929L(1)(A), substituted “other than a government security” for “registered on a national securities exchange”.

Subsecs. (d) to (i). Pub. L. 111–203, § 929X(b), added subsec. (d) and redesignated former subsecs. (d) to (h) as (e) to (i), respectively. Former subsec. (i), relating to limitation on Commission authority, redesignated (j).

Subsec. (j). Pub. L. 111–203, § 929X(b)(1), redesignated subsec. (i), relating to limitation on Commission authority, as (j).

Pub. L. 111–203, § 763(g), added subsec. (j) relating to regulations relating to security-based swaps.

Pub. L. 111–203, § 762(d)(2)(B), which directed amendment of subsec. (i) by striking out “(as defined in section 206B of the Gramm-Leach-Bliley Act)”, was executed by making the strike out after “security-based swap agreements” in subsec. (j) relating to limitation on Commission authority, to reflect the probable intent of Congress and the redesignation of subsec. (i) as (j) by Pub. L. 111–203, § 929X(b)(1). See above and Effective Date of 2010 Amendment notes below.

2000

Subsec. (a)(2) to (5). Pub. L. 106–554, § 1(a)(5) [title III, § 303(b)], amended pars. (2) to (5) generally. Prior to amendment, pars. (2) to (5) read as follows:

“(2) To effect, alone or with one or more other persons, a series of transactions in any security registered on a national securities exchange creating actual or apparent active trading in such security or raising or depressing the price of such security, for the purpose of inducing the purchase or sale of such security by others.

“(3) If a dealer or broker, or other person selling or offering for sale or purchasing or offering to purchase the security, to induce the purchase or sale of any security registered on a national securities exchange by the circulation or dissemination in the ordinary course of business of information to the effect that the price of any such security will or is likely to rise or fall because of market operations of any one or more persons conducted for the purpose of raising or depressing the prices of such security.

“(4) If a dealer or broker, or other person selling or offering for sale or purchasing or offering to purchase the security, to make, regarding any security registered on a national securities exchange, for the purpose of inducing the purchase or sale of such security, any statement which 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, and which he knew or had reasonable ground to believe was so false or misleading.

“(5) For a consideration, received directly or indirectly from a dealer or broker, or other person selling or offering for sale or purchasing or offering to purchase the security, to induce the purchase or sale of any security registered on a national securities exchange by the circulation or dissemination of information to the effect that the price of any such security will or is likely to rise or fall because of the market operations of any one or more persons conducted for the purpose of raising or depressing the price of such security.”

Subsec. (b)(1). Pub. L. 106–554, § 1(a)(5) [title II, § 205(a)(1)(A)], inserted “(A)” after “acquires” and substituted “; or (B) any security futures product on the security; or” for “; or”.

Subsec. (b)(2). Pub. L. 106–554, § 1(a)(5) [title II, § 205(a)(1)(B)], inserted “(A)” after “interest in any” and substituted “; or (B) such security futures product; or” for “; or”.

Subsec. (b)(3). Pub. L. 106–554, § 1(a)(5) [title II, § 205(a)(1)(C)], inserted “(A)” after “interest in any” and “; or (B) such security futures product” after “privilege”.

Subsec. (g). Pub. L. 106–554, § 1(a)(5) [title II, § 205(a)(2)], designated existing provisions as par. (1), inserted “other than a security futures product” after “future delivery”, and added par. (2).

Subsec. (i). Pub. L. 106–554, § 1(a)(5) [title III, § 303(c)], added subsec. (i).

1990

Subsec. (h). Pub. L. 101–432 added subsec. (h).

1982

Subsec. (f). Pub. L. 97–303, § 3(1), substituted “The provisions of subsection (a) shall not apply” for “The provisions of this section shall not apply”.

Subsec. (g). Pub. L. 97–303, § 3(2), added subsec. (g).

Statutory Notes and Related Subsidiaries

Effective Date of 2010 Amendment

Amendment by sections 929L(1) and 929X(b) of Pub. L. 111–203 effective 1 day after , except as otherwise provided, see section 4 of Pub. L. 111–203, set out as an Effective Date note under section 5301 Title 12, Banks and Banking.

Amendment by sections 762(d)(2) and 763(f), (g) of Pub. L. 111–203 effective on the later of 360 days after , or, to the extent a provision of subtitle B (§§ 761–774) of title VII of Pub. L. 111–203 requires a rulemaking, not less than 60 days after publication of the final rule or regulation implementing such provision of subtitle B, see section 774 of Pub. L. 111–203, set out as a note under section 77b of this title.

Executive Documents

Transfer of Functions

For transfer of functions of Securities and Exchange Commission, with certain exceptions, to Chairman of such Commission, see Reorg. Plan No. 10 of 1950, §§ 1, 2, eff. , 15 F.R. 3175, 64 Stat. 1265, set out under section 78d of this title.

Credits

1934–2010 · 5 acts
  1. 1934June 6, 1934, ch. 404, title I, § 9, 48 Stat. 889
  2. 1982Pub. L. 97–303, § 3, , 96 Stat. 1409
  3. 1990Pub. L. 101–432, § 6(a), , 104 Stat. 975
  4. 2000Pub. L. 106–554, § 1(a)(5) [title II, § 205(a)(1), (2), title III, § 303(b), (c)], , 114 Stat. 2763, 2763A–425, 2763A–426, 2763A–453, 2763A–454
  5. 2010Pub. L. 111–203, title VII, §§ 762(d)(2), 763(f), (g), title IX, §§ 929L(1), 929X(b), , 124 Stat. 1760, 1777, 1861, 1870.
Show as published

(June 6, 1934, ch. 404, title I, § 9, 48 Stat. 889; Pub. L. 97–303, § 3, , 96 Stat. 1409; Pub. L. 101–432, § 6(a), , 104 Stat. 975; Pub. L. 106–554, § 1(a)(5) [title II, § 205(a)(1), (2), title III, § 303(b), (c)], , 114 Stat. 2763, 2763A–425, 2763A–426, 2763A–453, 2763A–454; Pub. L. 111–203, title VII, §§ 762(d)(2), 763(f), (g), title IX, §§ 929L(1), 929X(b), , 124 Stat. 1760, 1777, 1861, 1870.)

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