§ 78t-1. — Liability to contemporaneous traders for insider trading.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 15USC78t-1]
TITLE 15--COMMERCE AND TRADE
CHAPTER 2B--SECURITIES EXCHANGES
Sec. 78t-1. Liability to contemporaneous traders for insider
trading
(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.
(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.
