CITE

    15 USC Sec. 78cc                                            01/08/2008

EXPCITE

    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2B - SECURITIES EXCHANGES

HEAD

    Sec. 78cc. Validity of contracts

STATUTE

    (a) Waiver provisions
      Any condition, stipulation, or provision binding any person to
    waive compliance with any provision of this chapter or of any rule
    or regulation thereunder, or of any rule of an exchange required
    thereby shall be void.
    (b) Contract provisions in violation of chapter
      Every contract made in violation of any provision of this chapter
    or of any rule or regulation thereunder, and every contract
    (including any contract for listing a security on an exchange)
    heretofore or hereafter made, the performance of which involves the
    violation of, or the continuance of any relationship or practice in
    violation of, any provision of this chapter or any rule or
    regulation thereunder, shall be void (1) as regards the rights of
    any person who, in violation of any such provision, rule, or
    regulation, shall have made or engaged in the performance of any
    such contract, and (2) as regards the rights of any person who, not
    being a party to such contract, shall have acquired any right
    thereunder with actual knowledge of the facts by reason of which
    the making or performance of such contract was in violation of any
    such provision, rule, or regulation: Provided, (A) That no contract
    shall be void by reason of this subsection because of any violation
    of any rule or regulation prescribed pursuant to paragraph (3) of
    subsection (c) of section 78o of this title, and (B) that no
    contract shall be deemed to be void by reason of this subsection in
    any action maintained in reliance upon this subsection, by any
    person to or for whom any broker or dealer sells, or from or for
    whom any broker or dealer purchases, a security in violation of any
    rule or regulation prescribed pursuant to paragraph (1) or (2) of
    subsection (c) of section 78o of this title, unless such action is
    brought within one year after the discovery that such sale or
    purchase involves such violation and within three years after such
    violation. The Commission may, in a rule or regulation prescribed
    pursuant to such paragraph (2) of such section 78o(c) of this
    title, designate such rule or regulation, or portion thereof, as a
    rule or regulation, or portion thereof, a contract in violation of
    which shall not be void by reason of this subsection.
    (c) Validity of loans, extensions of credit, and creation of liens;
      actual knowledge of violation
      Nothing in this chapter shall be construed (1) to affect the
    validity of any loan or extension of credit (or any extension or
    renewal thereof) made or of any lien created prior or subsequent to
    the enactment of this chapter, unless at the time of the making of
    such loan or extension of credit (or extension or renewal thereof)
    or the creating of such lien, the person making such loan or
    extension of credit (or extension or renewal thereof) or acquiring
    such lien shall have actual knowledge of facts by reason of which
    the making of such loan or extension of credit (or extension or
    renewal thereof) or the acquisition of such lien is a violation of
    the provisions of this chapter or any rule or regulation
    thereunder, or (2) to afford a defense to the collection of any
    debt or obligation or the enforcement of any lien by any person who
    shall have acquired such debt, obligation, or lien in good faith
    for value and without actual knowledge of the violation of any
    provision of this chapter or any rule or regulation thereunder
    affecting the legality of such debt, obligation, or lien.

SOURCE

    (June 6, 1934, ch. 404, title I, Sec. 29, 48 Stat. 903; June 25,
    1938, ch. 677, Sec. 3, 52 Stat. 1076; Pub. L. 101-429, title V,
    Sec. 507, Oct. 15, 1990, 104 Stat. 956.)

REFERENCES IN TEXT

      This chapter, referred to in subsecs. (a), (b), and (c), was in
    the original "this title". See References in Text note set out
    under section 78a of this title.

AMENDMENTS

      1990 - Subsec. (b). Pub. L. 101-429 substituted in cl. (A)
    "paragraph (3)" for "paragraph (2) or (3)" and in cl. (B)
    "paragraph (1) or (2)" for "paragraph (1)", and inserted at end
    "The Commission may, in a rule or regulation prescribed pursuant to
    such paragraph (2) of such section 78o(c) of this title, designate
    such rule or regulation, or portion thereof, as a rule or
    regulation, or portion thereof, a contract in violation of which
    shall not be void by reason of this subsection."
      1938 - Subsec. (b). Act June 25, 1938, inserted proviso.
                     EFFECTIVE DATE OF 1990 AMENDMENT
      Amendment by Pub. L. 101-429 effective Oct. 15, 1990, with
    provisions relating to civil penalties and accounting and
    disgorgement, see section 1(c)(1), (2) of Pub. L. 101-429, set out
    in a note under section 77g of this title.