CITE

    15 USC Sec. 78jjj                                           01/08/2008

EXPCITE

    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2B091 - SECURITIES INVESTOR PROTECTION

HEAD

    Sec. 78jjj. Prohibited acts

STATUTE

    (a) Failure to pay assessment, etc.
      If a member of SIPC shall fail to file any report or information
    required pursuant to this chapter, or shall fail to pay when due
    all or any part of an assessment made upon such member pursuant to
    this chapter, and such failure shall not have been cured, by the
    filing of such report or information or by the making of such
    payment, together with interest and penalty thereon, within five
    days after receipt by such member of written notice of such failure
    given by or on behalf of SIPC, it shall be unlawful for such
    member, unless specifically authorized by the Commission, to engage
    in business as a broker or dealer. If such member denies that it
    owes all or any part of the amount specified in such notice, it may
    after payment of the full amount so specified commence an action
    against SIPC in the appropriate United States district court to
    recover the amount it denies owing.
    (b) Engaging in business after appointment of trustee or initiation
      of direct payment procedure
      It shall be unlawful for any broker or dealer for whom a trustee
    has been appointed pursuant to this chapter or for whom a direct
    payment procedure has been initiated to engage thereafter in
    business as a broker or dealer, unless the Commission otherwise
    determines in the public interest. The Commission may by order bar
    or suspend for any period, any officer, director, general partner,
    owner of 10 per centum or more of the voting securities, or
    controlling person of any broker or dealer for whom a trustee has
    been appointed pursuant to this chapter or for whom a direct
    payment procedure has been initiated from being or becoming
    associated with a broker or dealer, if after appropriate notice and
    opportunity for hearing, the Commission shall determine such bar or
    suspension to be in the public interest.
    (c) Concealment of assets; false statements or claims
      (1) Specific prohibited acts
        Any person who, directly or indirectly, in connection with or
      in contemplation of any liquidation proceeding or direct payment
      procedure -
          (A) employs any device, scheme, or artifice to defraud;
          (B) engages in any act, practice, or course of business which
        operates or would operate as a fraud or deceit upon any person;
        or
          (C) fraudulently or with intent to defeat this chapter -
            (i) conceals or transfers any property belonging to the
          estate of a debtor;
            (ii) makes a false statement or account;
            (iii) presents or uses any false claim for proof against
          the estate of a debtor;
            (iv) receives any material amount of property from a
          debtor;
            (v) gives, offers, receives, transfers, or obtains any
          money or property, remuneration, compensation, reward,
          advantage, other consideration, or promise thereof, for
          acting or forebearing to act;
            (vi) conceals, destroys, mutilates, falsifies, makes a
          false entry in, or otherwise falsifies any document affecting
          or relating to the property or affairs of a debtor; or
            (vii) withholds, from any person entitled to its
          possession, any document affecting or relating to the
          property or affairs of a debtor,
      shall be fined not more than $50,000 or imprisoned for not more
      than five years, or both.
      (2) Fraudulent conversion
        Any person who, directly or indirectly steals, embezzles, or
      fraudulently, or with intent to defeat this chapter, abstracts or
      converts to his own use or to the use of another any of the
      moneys, securities, or other assets of SIPC, or otherwise
      defrauds or attempts to defraud SIPC or a trustee by any means,
      shall be fined not more than $50,000 or imprisoned not more than
      five years, or both.

SOURCE

    (Pub. L. 91-598, Sec. 14, formerly Sec. 10, Dec. 30, 1970, 84 Stat.
    1655; renumbered Sec. 14 and amended Pub. L. 95-283, Secs. 9, 13,
    May 21, 1978, 92 Stat. 260, 269.)

REFERENCES IN TEXT

      This chapter, referred to in subsecs. (a), (b), and (c)(1)(C),
    (2), was in the original "this Act", meaning Pub. L. 91-598, Dec.
    30, 1970, 84 Stat. 1636. For complete classification of this Act to
    the Code, see Tables.

AMENDMENTS

      1978 - Subsec. (a). Pub. L. 95-283, Sec. 13(a), inserted "and
    penalty" after "interest", and substituted "it" for "he" wherever
    appearing.
      Subsec. (b). Pub. L. 95-283, Sec. 13(b), in heading inserted "or
    initiation of direct payment procedure" after "trustee", and in
    text inserted references to initiation of direct payment procedure
    in two places.
      Subsec. (c). Pub. L. 95-283, Sec. 13(c), in heading substituted
    "Concealment of assets; false statements or claims" for
    "Embezzlement, etc., of assets of SIPC", added par. (1), and
    designated existing provisions as par. (2) and, as so designated,
    inserted references to direct or indirect acts, and provisions
    covering defrauding or attempts to defraud SIPC or a trustee, and
    substituted provisions covering activities constituting fraudulent,
    or with intent to defeat this chapter, abstracts or conversions,
    for provisions covering activities constituting unlawfully
    abstracting or unlawfully and willfully converting moneys, etc.