CITE

    15 USC Sec. 78t-1                                           01/08/2008

EXPCITE

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

HEAD

    Sec. 78t-1. Liability to contemporaneous traders for insider
      trading

STATUTE

    (a) Private rights of action based on contemporaneous trading
      Any person who violates any provision of this chapter or the
    rules or regulations thereunder by purchasing or selling a security
    while in possession of material, nonpublic information shall be
    liable in an action in any court of competent jurisdiction to any
    person who, contemporaneously with the purchase or sale of
    securities that is the subject of such violation, has purchased
    (where such violation is based on a sale of securities) or sold
    (where such violation is based on a purchase of securities)
    securities of the same class.
    (b) Limitations on liability
      (1) Contemporaneous trading actions limited to profit gained or
        loss avoided
        The total amount of damages imposed under subsection (a) of
      this section shall not exceed the profit gained or loss avoided
      in the transaction or transactions that are the subject of the
      violation.
      (2) Offsetting disgorgements against liability
        The total amount of damages imposed against any person under
      subsection (a) of this section shall be diminished by the
      amounts, if any, that such person may be required to disgorge,
      pursuant to a court order obtained at the instance of the
      Commission, in a proceeding brought under section 78u(d) of this
      title relating to the same transaction or transactions.
      (3) Controlling person liability
        No person shall be liable under this section solely by reason
      of employing another person who is liable under this section, but
      the liability of a controlling person under this section shall be
      subject to section 78t(a) of this title.
      (4) Statute of limitations
        No action may be brought under this section more than 5 years
      after the date of the last transaction that is the subject of the
      violation.
    (c) Joint and several liability for communicating
      Any person who violates any provision of this chapter or the
    rules or regulations thereunder by communicating material,
    nonpublic information shall be jointly and severally liable under
    subsection (a) of this section with, and to the same extent as, any
    person or persons liable under subsection (a) of this section to
    whom the communication was directed.
    (d) Authority not to restrict other express or implied rights of
      action
      Nothing in this section shall be construed to limit or condition
    the right of any person to bring an action to enforce a requirement
    of this chapter or the availability of any cause of action implied
    from a provision of this chapter.
    (e) Provisions not to affect public prosecutions
      This section shall not be construed to bar or limit in any manner
    any action by the Commission or the Attorney General under any
    other provision of this chapter, nor shall it bar or limit in any
    manner any action to recover penalties, or to seek any other order
    regarding penalties.

SOURCE

    (June 6, 1934, ch. 404, title I, Sec. 20A, as added Pub. L. 100-
    704, Sec. 5, Nov. 19, 1988, 102 Stat. 4680.)

REFERENCES IN TEXT

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

EFFECTIVE DATE

      Section not applicable to actions occurring before Nov. 19, 1988,
    see section 9 of Pub. L. 100-704 set out as an Effective Date of
    1988 Amendment note under section 78o of this title.