§ 78t. — Liability of controlling persons and persons who aid and abet violations.
[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]
TITLE 15--COMMERCE AND TRADE
CHAPTER 2B--SECURITIES EXCHANGES
Sec. 78t. Liability of controlling persons and persons who aid
and abet violations
(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.
(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.
Section Referred to in Other Sections
This section is referred to in sections 78j, 78t-1, 78u-1, 78kkk of
this title.
