§ 78jjj. — Prohibited acts.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 15USC78jjj]
TITLE 15--COMMERCE AND TRADE
CHAPTER 2B-1--SECURITIES INVESTOR PROTECTION
Sec. 78jjj. Prohibited acts
(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.
(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.
