US Code Title 15 Section 78

CITE

    15 USC Sec. 78t                                             01/08/2008

EXPCITE

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

HEAD

    Sec. 78t. Liability of controlling persons and persons who aid and
      abet violations

STATUTE

    (a) Joint and several liability; good faith defense
      Every person who, directly or indirectly, controls any person
    liable under any provision of this chapter or of any rule or
    regulation thereunder shall also be liable jointly and severally
    with and to the same extent as such controlled person to any person
    to whom such controlled person is liable, unless the controlling
    person acted in good faith and did not directly or indirectly
    induce the act or acts constituting the violation or cause of
    action.
    (b) Unlawful activity through or by means of any other person
      It shall be unlawful for any person, directly or indirectly, to
    do any act or thing which it would be unlawful for such person to
    do under the provisions of this chapter or any rule or regulation
    thereunder through or by means of any other person.
    (c) Hindering, delaying, or obstructing the making or filing of any
      document, report, or information
      It shall be unlawful for any director or officer of, or any owner
    of any securities issued by, any issuer required to file any
    document, report, or information under this chapter or any rule or
    regulation thereunder without just cause to hinder, delay, or
    obstruct the making or filing of any such document, report, or
    information.
    (d) Liability for trading in securities while in possession of
      material nonpublic information
      Wherever communicating, or purchasing or selling a security while
    in possession of, material nonpublic information would violate, or
    result in liability to any purchaser or seller of the security
    under any provisions of this chapter, or any rule or regulation
    thereunder, such conduct in connection with a purchase or sale of a
    put, call, straddle, option, privilege or security-based swap
    agreement (as defined in section 206B of the Gramm-Leach-Bliley
    Act) with respect to such security or with respect to a group or
    index of securities including such security, shall also violate and
    result in comparable liability to any purchaser or seller of that
    security under such provision, rule, or regulation.
    (e) Prosecution of persons who aid and abet violations
      For purposes of any action brought by the Commission under
    paragraph (1) or (3) of section 78u(d) of this title, any person
    that knowingly provides substantial assistance to another person in
    violation of a provision of this chapter, or of any rule or
    regulation issued under this chapter, shall be deemed to be in
    violation of such provision to the same extent as the person to
    whom such assistance is provided.
    (f) Limitation on Commission authority
      The authority of the Commission under this section with respect
    to security-based swap agreements (as defined in section 206B of
    the Gramm-Leach-Bliley Act) shall be subject to the restrictions
    and limitations of section 78c-1(b) of this title.

SOURCE

    (June 6, 1934, ch. 404, title I, Sec. 20, 48 Stat. 899; May 27,
    1936, ch. 462, Sec. 6, 49 Stat. 1379; Pub. L. 88-467, Sec. 9, Aug.
    20, 1964, 78 Stat. 579; Pub. L. 98-376, Sec. 5, Aug. 10, 1984, 98
    Stat. 1265; Pub. L. 104-67, title I, Sec. 104, Dec. 22, 1995, 109
    Stat. 757; Pub. L. 105-353, title III, Sec. 301(b)(12), Nov. 3,
    1998, 112 Stat. 3236; Pub. L. 106-554, Sec. 1(a)(5) [title II, Sec.
    205(a)(3), title III, Sec. 303(i), (j)], Dec. 21, 2000, 114 Stat.
    2763, 2763A-426, 2763A-456.)

REFERENCES IN TEXT

      This chapter, referred to in text, was in the original "this
    title". See References in Text note set out under section 78a of
    this title.
      Section 206B of the Gramm-Leach-Bliley Act, referred to in
    subsecs. (d) and (f), is section 206B of Pub. L. 106-102, which is
    set out in a note under section 78c of this title.

AMENDMENTS

      2000 - Subsec. (d). Pub. L. 106-554, Sec. 1(a)(5) [title III,
    Sec. 303(i)], amended subsec. (d) generally. Prior to amendment,
    subsec. (d) read as follows: "Wherever communicating, or purchasing
    or selling a security while in possession of, material nonpublic
    information would violate, or result in liability to any purchaser
    or seller of the security under any provision of this chapter, or
    any rule or regulation thereunder, such conduct in connection with
    a purchase or sale of a put, call, straddle, option,, privilege, or
    security futures product with respect to such security or with
    respect to a group or index of securities including such security,
    shall also violate and result in comparable liability to any
    purchaser or seller of that security under such provision, rule, or
    regulation."
      Pub. L. 106-554, Sec. 1(a)(5) [title II, Sec. 205(a)(3)],
    substituted ", privilege, or security futures product" for "or
    privilege".
      Subsec. (f). Pub. L. 106-554, Sec. 1(a)(5) [title III, Sec.
    303(j)], added subsec. (f).
      1998 - Subsecs. (e), (f). Pub. L. 105-353 redesignated subsec.
    (f) as (e).
      1995 - Pub. L. 104-67, Sec. 104(1), substituted "liability of
    controlling persons and persons who aid and abet violations" for
    "Liabilities of controlling persons" in section catchline.
      Subsec. (f). Pub. L. 104-67, Sec. 104(2), added subsec. (f).
      1984 - Subsec. (d). Pub. L. 98-376 added subsec. (d).
      1964 - Subsec. (c). Pub. L. 88-467 extended application of
    provisions of subsec. (c) by substituting the prohibition against
    any officer or director of, or an owner of securities issued by, a
    company from hindering, delaying, or obstructing the preparation or
    filing of any report, document, or information required to be filed
    under this chapter for existing provisions applicable only to
    filings by companies with securities registered on a national
    securities exchange or subject to the provisions of section 78o(d)
    of this title.
      1936 - Subsec. (c). Act May 27, 1936, inserted "or any
    undertaking contained in a registration statement as provided in
    subsection (d) of section 78o of this title".
                     EFFECTIVE DATE OF 1995 AMENDMENT
      Amendment by Pub. L. 104-67 not to affect or apply to any private
    action arising under this chapter or title I of the Securities Act
    of 1933 (15 U.S.C. 77a et seq.), commenced before and pending on
    Dec. 22, 1995, see section 108 of Pub. L. 104-67, set out as a note
    under section 77l of this title.
                     EFFECTIVE DATE OF 1984 AMENDMENT
      Amendment by Pub. L. 98-376 effective Aug. 10, 1984, see section
    7 of Pub. L. 98-376, set out as a note under section 78c of this
    title.
                     EFFECTIVE DATE OF 1964 AMENDMENT
      Amendment by Pub. L. 88-467 effective Aug. 20, 1964, see section
    13 of Pub. L. 88-467, set out as a note under section 78c of this
    title.
                      CONSTRUCTION OF 1995 AMENDMENT
      Nothing in amendment by Pub. L. 104-67 to be deemed to create or
    ratify any implied right of action, or to prevent Commission, by
    rule or regulation, from restricting or otherwise regulating
    private actions under this chapter, see section 203 of Pub. L. 104-
    67, set out as a Construction note under section 78j-1 of this
    title.