Adjustments to Civil Monetary Penalty Amounts, 2716-2718 [2021-00528]
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Federal Register / Vol. 86, No. 8 / Wednesday, January 13, 2021 / Notices
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
under Section 19(b)(2)(B) 26 of the Act to
determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
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arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
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• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NYSE–2020–108 on the subject line.
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to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
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provisions of 5 U.S.C. 552, will be
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For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.27
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–00465 Filed 1–12–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release Nos. 33–10918; 34–90874; IA–
5664; IC–34166]
Adjustments to Civil Monetary Penalty
Amounts
Securities and Exchange
Commission.
ACTION: Annual inflation adjustment of
civil monetary penalties.
AGENCY:
The Securities and Exchange
Commission (the ‘‘Commission’’) is
publishing this notice (the ‘‘Notice’’)
pursuant to the Federal Civil Penalties
Inflation Adjustment Act Improvements
Act of 2015 (the ‘‘2015 Act’’). This Act
requires all agencies to annually adjust
for inflation the civil monetary penalties
that can be imposed under the statutes
administered by the agency and publish
the adjusted amounts in the Federal
Register. This Notice sets forth the
annual inflation adjustment of the
maximum amount of civil monetary
penalties (‘‘CMPs’’) administered by the
Commission under the Securities Act of
1933, the Securities Exchange Act of
1934 (the ‘‘Exchange Act’’), the
Investment Company Act of 1940, the
Investment Advisers Act of 1940, and
certain penalties under the SarbanesOxley Act of 2002. These amounts are
effective beginning on January 15, 2021,
and will apply to all penalties imposed
after that date for violations of the
aforementioned statutes that occurred
after November 2, 2015.
FOR FURTHER INFORMATION CONTACT:
Stephen M. Ng, Senior Special Counsel,
Office of the General Counsel, at (202)
551–7957, or Hannah W. Riedel, Senior
Counsel, Office of the General Counsel,
at (202) 551–7918.
SUPPLEMENTARY INFORMATION:
SUMMARY:
I. Background
This Notice is being published
pursuant to the 2015 Act,1 which
27 17
CFR 200.30–3(a)(12).
Law 114–74 Sec. 701, 129 Stat. 599–601
(Nov. 2, 2015), codified at 28 U.S.C. 2461 note.
1 Public
26 15
U.S.C. 78s(b)(2)(B).
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Fmt 4703
Sfmt 4703
amended the Federal Civil Penalties
Inflation Adjustment Act of 1990 (the
‘‘Inflation Adjustment Act’’).2 The
Inflation Adjustment Act previously had
been amended by the Debt Collection
Improvement Act of 1996 (the ‘‘DCIA’’) 3
to require that each federal agency adopt
regulations at least once every four years
that adjust for inflation the CMPs that
can be imposed under the statutes
administered by the agency. Pursuant to
this requirement, the Commission
previously adopted regulations in 1996,
2001, 2005, 2009, and 2013 to adjust the
maximum amount of the CMPs that
could be imposed under the statutes the
Commission administers.4
The 2015 Act replaces the inflation
adjustment formula prescribed in the
DCIA with a new formula for calculating
the inflation-adjusted amount of CMPs.
The 2015 Act requires that agencies use
this new formula to re-calculate the
inflation-adjusted amounts of the
penalties they administer on an annual
basis and publish these new amounts in
the Federal Register by January 15 of
each year.5 The Commission previously
published the first annual adjustment
required by the 2015 Act on January 6,
2017 (the ‘‘2017 Adjustment’’).6 As part
of the 2017 Adjustment, the
Commission promulgated 17 CFR
201.1001(a) and Table I to Subsection
1001, which lists the penalty amounts
for all violations that occurred on or
before November 2, 2015. For violations
occurring after November 2, 2015,
Subsection 1001(b) provides that the
applicable penalty amounts will be
adjusted annually based on the formula
set forth in the 2015 Act. Subsection
1001(b) further provides that these
adjusted amounts will be published in
2 Public Law 101–410, 104 Stat. 890–892 (1990),
codified at 28 U.S.C. 2461 note.
3 Public Law 104–134, Title III, § 31001(s)(1), 110
Stat. 1321–373 (1996), codified at 28 U.S.C. 2461
note.
4 See Release Nos. 33–7361, 34–37912, IA–1596,
IC–22310, dated November 1, 1996 (effective
December 9, 1996), previously found at 17 CFR
201.1001 and Table I to Subpart E of Part 201;
Release Nos. 33–7946, 34–43897, IA–1921, IC–
24846, dated January 31, 2001 (effective February
2, 2001), previously found at 17 CFR 201.1002 and
Table II to Subpart E of Part 201; Release Nos. 33–
8530, 34–51136, IA–2348, IC–26748, dated
February 9, 2005 (effective February 14, 2005),
previously found at 17 CFR 201.1003 and Table III
to Subpart E of Part 201; Release Nos. 33–9009, 34–
59449, IA–2845, IC–28635, dated February 25, 2009
(effective March 3, 2009), previously found at 17
CFR 201.1004 and Table IV to Subpart E of Part 201;
and Release Nos. 33–9387, 34–68994, IA–3557, IC–
30408, dated February 27, 2013 (effective March 5,
2013), previously found at 17 CFR 201.1005 and
Table V to Subpart E of Part 201. The penalty
amounts contained in these releases have now been
consolidated into Table I to 17 CFR 201.1001.
5 28 U.S.C. 2461 note Sec. 4.
6 Release Nos. 33–10276; 34–79749; IA–4599; IC–
32414 (effective Jan. 18, 2017).
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Federal Register / Vol. 86, No. 8 / Wednesday, January 13, 2021 / Notices
the Federal Register and on the
Commission’s website. The Commission
subsequently published annual
adjustments on January 8, 2018 (the
‘‘2018 Adjustment’’),7 February 20, 2019
(‘‘2019 Adjustment’’),8 and January 8,
2020 (the ‘‘2020 Adjustment’’).9
A CMP is defined in relevant part as
any penalty, fine, or other sanction that:
(1) Is for a specific amount, or has a
maximum amount, as provided by
federal law; and (2) is assessed or
enforced by an agency in an
administrative proceeding or by a
federal court pursuant to federal law.10
This definition applies to the monetary
penalty provisions contained in four
statutes administered by the
Commission: The Securities Act, the
Exchange Act, the Investment Company
Act, and the Investment Advisers Act.
In addition, the Sarbanes-Oxley Act
provides the Public Company
Accounting Oversight Board (the
‘‘PCAOB’’) authority to levy civil
monetary penalties in its disciplinary
proceedings pursuant to 15 U.S.C.
7215(c)(4)(D).11 The definition of a CMP
in the Inflation Adjustment Act
encompasses such civil monetary
penalties.12
II. Adjusting the Commission’s Penalty
Amounts for Inflation
This Notice sets forth the annual
inflation adjustment required by the
2015 Act for all CMPs under the
Securities Act, the Exchange Act, the
Investment Company Act, and the
Investment Advisers Act, and certain
civil monetary penalties under the
Sarbanes-Oxley Act.
Pursuant to the 2015 Act, the penalty
amounts in the 2020 Adjustment are
adjusted for inflation by increasing them
by the percentage change between the
Consumer Price Index for all Urban
Consumers (‘‘CPI–U’’) for October 2019
U.S. code citation
Civil monetary penalty description
15 U.S.C. 77h–1(g) (Securities Act
Sec. 8A(g)).
For natural person ....................................................
For any other person ................................................
For natural person/fraud ...........................................
For any other person/fraud .......................................
For natural person/fraud/substantial losses or risk
of losses to others or gains to self.
For any other person/fraud/substantial losses or
risk of losses to others or gain to self.
For natural person ....................................................
For any other person ................................................
For natural person/fraud ...........................................
For any other person/fraud .......................................
For natural person/fraud/substantial losses or risk
of losses to others.
For any other person/fraud/substantial losses or
risk of losses to others.
For natural person ....................................................
For any other person ................................................
For natural person/fraud ...........................................
For any other person/fraud .......................................
For natural person/fraud/substantial losses or risk
of losses to others or gains to self.
For any other person/fraud/substantial losses or
risk of losses to others or gain to self.
Insider Trading—controlling person ..........................
15 U.S.C. 77t(d) (Securities Act Sec.
20(d)).
15 U.S.C. 78u(d)(3) (Exchange Act
Sec. 21(d)(3)).
15 U.S.C. 78u–1(a)(3) (Exchange Act
Sec. 21A(a)(3)).
15 U.S.C. 78u–2 (Exchange Act Sec.
21B).
For
For
For
For
natural person ....................................................
any other person ................................................
natural person/fraud ...........................................
any other person/fraud .......................................
7 Release Nos. 33–10451; 34–82455; IA–4842; IC–
32963 (effective Jan. 15, 2018).
8 Release Nos. 33–10604; 34–85118; IA–5111; IC–
33373 (effective Jan. 15, 2019). The publication of
the 2019 Adjustment in the Federal Register was
delayed due to operation of the Antideficiency Act
during the absence of an appropriations bill to fund
federal government programs between December
22, 2018 and January 25, 2019.
9 Release Nos. 33–10740; 34–87905; IA–5428; IC–
33740 (effective Jan. 15, 2020).
10 28 U.S.C. 2461 note Sec. 3(2).
11 15 U.S.C. 7215(c)(4)(D).
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12 The Commission may by order affirm, modify,
remand, or set aside sanctions, including civil
monetary penalties, imposed by the PCAOB. See
Section 107(c) of the Sarbanes-Oxley Act of 2002,
15 U.S.C. 7217. The Commission may enforce such
orders in federal district court pursuant to Section
21(e) of the Exchange Act. As a result, penalties
assessed by the PCAOB in its disciplinary
proceedings are penalties ‘‘enforced’’ by the
Commission for purposes of the Inflation
Adjustment Act. See Adjustments to Civil Monetary
Penalty Amounts, Release No. 33–8530 (Feb. 4,
2005) [70 FR 7606 (Feb. 14, 2005)].
PO 00000
Frm 00081
Fmt 4703
Sfmt 4703
and the October 2020 CPI–U.13 OMB has
provided its calculation of this
multiplier (the ‘‘CPI–U Multiplier’’) to
agencies.14 The new penalty amounts
are determined by multiplying the
amounts in the 2020 Adjustment by the
CPI–U Multiplier and then rounding to
the nearest dollar.
For example, the CMP for certain
insider trading violations by controlling
persons under Exchange Act Section
21A(a)(3) 15 was readjusted for inflation
as part of the 2020 Adjustment to
$2,140,973. To determine the new CMP
under this provision, the Commission
multiplies this amount by the CPI–U
Multiplier of 1.01182, and rounds to the
nearest dollar. Thus, the new CMP for
Exchange Act Section 21A(a)(3) is
$2,166,279.
Below is the Commission’s
calculation of the new penalty amounts
for the penalties it administers:
2020
adjustment
penalty
amounts
CPI–U
multiplier
2021 adjusted
penalty
amounts
$8,824
88,248
88,248
441,240
176,496
1.01182
1.01182
1.01182
1.01182
1.01182
$8,928
89,291
89,291
446,455
178,582
853,062
1.01182
863,145
9,639
96,384
96,384
481,920
192,768
1.01182
1.01182
1.01182
1.01182
1.01182
9,753
97,523
97,523
487,616
195,047
963,837
1.01182
975,230
9,639
96,384
96,384
481,920
192,768
1.01182
1.01182
1.01182
1.01182
1.01182
9,753
97,523
97,523
487,616
195,047
963,837
1.01182
975,230
2,140,973
1.01182
2,166,279
9,639
96,384
96,384
481,920
1.01182
1.01182
1.01182
1.01182
9,753
97,523
97,523
487,616
13 28
U.S.C. 2461 note Sec. 5.
of Management and Budget,
Implementation of Penalty Inflation Adjustments
for 2021, Pursuant to the Federal Civil Penalties
Inflation Adjustment Act Improvements Act of 2015
(December 23, 2020), available at https://
www.whitehouse.gov/wp-content/uploads/2020/12/
M-21-10.pdf. This multiplier represents the
percentage increase between the October 2019 CPI–
U and the October 2020 CPI–U, plus 1.
15 15 U.S.C. 78u–1(a)(3).
14 Office
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Federal Register / Vol. 86, No. 8 / Wednesday, January 13, 2021 / Notices
U.S. code citation
Civil monetary penalty description
15 U.S.C. 78ff(b) (Exchange Act Sec.
32(b)).
15 U.S.C. 78ff(c)(1)(B) (Exchange Act
Sec. 32(c)(1)(B)).
15 U.S.C. 78ff(c)(2)(B) (Exchange Act
Sec. 32(c)(2)(B)).
15 U.S.C. 80a–9(d) (Investment Company Act Sec. 9(d)).
15 U.S.C. 80a–41(e) (Investment
Company Act Sec. 42(e)).
15 U.S.C. 80b–3(i) (Investment Advisers Act Sec. 203(i)).
15 U.S.C. 80b–9(e) (Investment Advisers Act Sec. 209(e)).
15 U.S.C. 7215(c)(4)(D)(i) (SarbanesOxley Act Sec. 105(c)(4)(D)(i)).
15 U.S.C. 7215(c)(4)(D)(ii) (SarbanesOxley Act Sec. 105(c)(4)(D)(ii)).
2021 adjusted
penalty
amounts
192,768
1.01182
195,047
963,837
1.01182
975,230
569
1.01182
576
21,410
1.01182
21,663
Foreign Corrupt Practices—any agent or stockholder acting on behalf of issuer.
For natural person ....................................................
For any other person ................................................
For natural person/fraud ...........................................
For any other person/fraud .......................................
For natural person/fraud/substantial losses or risk
of losses to others or gains to self.
For any other person/fraud/substantial losses or
risk of losses to others or gain to self.
For natural person ....................................................
For any other person ................................................
For natural person/fraud ...........................................
For any other person/fraud .......................................
For natural person/fraud/substantial losses or risk
of losses to others.
For any other person/fraud/substantial losses or
risk of losses to others.
For natural person ....................................................
For any other person ................................................
For natural person/fraud ...........................................
For any other person/fraud .......................................
For natural person/fraud/substantial losses or risk
of losses to others or gains to self.
For any other person/fraud/substantial losses or
risk of losses to others or gain to self.
For natural person ....................................................
For any other person ................................................
For natural person/fraud ...........................................
For any other person/fraud .......................................
For natural person/fraud/substantial losses or risk
of losses to others.
For any other person/fraud/substantial losses or
risk of losses to others.
For natural person ....................................................
For any other person ................................................
For natural person ....................................................
For any other person ................................................
21,410
1.01182
21,663
9,639
96,384
96,384
481,920
192,768
1.01182
1.01182
1.01182
1.01182
1.01182
9,753
97,523
97,523
487,616
195,047
963,837
1.01182
975,230
9,639
96,384
96,384
481,920
192,768
1.01182
1.01182
1.01182
1.01182
1.01182
9,753
97,523
97,523
487,616
195,047
963,837
1.01182
975,230
9,639
96,384
96,384
481,920
192,768
1.01182
1.01182
1.01182
1.01182
1.01182
9,753
97,523
97,523
487,616
195,047
963,837
1.01182
975,230
9,639
96,384
96,384
481,920
192,768
1.01182
1.01182
1.01182
1.01182
1.01182
9,753
97,523
97,523
487,616
195,047
963,837
1.01182
975,230
141,943
2,838,885
1,064,582
21,291,632
1.01182
1.01182
1.01182
1.01182
143,621
2,872,441
1,077,165
21,543,299
16 The penalty amounts in this Notice are being
published in the Federal Register and will not be
added to the Code of Federal Regulations in
accordance with the 2015 Act and 17 CFR
201.1001(b). See 28 U.S.C. 2461 note Sec. 4(a)(2);
17 CFR 201.1001(b). In addition to being published
in the Federal Register, the penalty amounts in this
Notice will be made available on the Commission’s
website at https://www.sec.gov/enforce/civilpenalties-inflation-adjustments.htm, as detailed in
18:08 Jan 12, 2021
CPI–U
multiplier
For natural person/fraud/substantial losses or risk
of losses to others.
For any other person/fraud/substantial losses or
risk of losses to others.
Exchange Act/failure to file information documents,
reports.
Foreign Corrupt Practices—any issuer .....................
Pursuant to the 2015 Act and 17 CFR
201.1001, the adjusted penalty amounts
in this Notice (and all penalty
adjustments performed pursuant to the
2015 Act) apply to penalties imposed
after the date the adjustment is effective
for violations that occurred after
November 2, 2015, the 2015 Act’s
enactment date. These penalty amounts
supersede the amounts in the 2020
Adjustment.16 For violations that
VerDate Sep<11>2014
2020
adjustment
penalty
amounts
Jkt 253001
occurred on or before November 2,
2015, the penalty amounts in Table I to
17 CFR 201.1001 continue to apply.17
DEPARTMENT OF STATE
By the Commission.
Dated: January 8, 2021.
J. Matthew DeLesDernier,
Assistant Secretary.
Secretary of State’s Determinations
under the International Religious
Freedom Act of 1998 and Frank R. Wolf
International Religious Freedom Act of
2016
[FR Doc. 2021–00528 Filed 1–12–21; 8:45 am]
BILLING CODE 8011–01–P
17 CFR 201.1001(b). This website also lists the
penalty amounts for violations that occurred on or
before November 2, 2015.
17 17 CFR 201.1001(a).
PO 00000
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Sfmt 4703
[Public Notice 11289]
The Secretary Of State’s Designation
Of ‘‘Countries Of Particular Concern’’
And ‘‘Special watch list’’ countries for
religious freedom violations pursuant to
Section 408(a) of the International
Religious Freedom Act of 1998 (Pub. L.
105–292), as amended (the Act), notice
is hereby given that, on December 2,
2020, the Secretary of State, under
authority delegated by the President,
has designated each of the following as
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]]>Agencies
[Federal Register Volume 86, Number 8 (Wednesday, January 13, 2021)]
[Notices]
[Pages 2716-2718]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-00528]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release Nos. 33-10918; 34-90874; IA-5664; IC-34166]
Adjustments to Civil Monetary Penalty Amounts
AGENCY: Securities and Exchange Commission.
ACTION: Annual inflation adjustment of civil monetary penalties.
-----------------------------------------------------------------------
SUMMARY: The Securities and Exchange Commission (the ``Commission'') is
publishing this notice (the ``Notice'') pursuant to the Federal Civil
Penalties Inflation Adjustment Act Improvements Act of 2015 (the ``2015
Act''). This Act requires all agencies to annually adjust for inflation
the civil monetary penalties that can be imposed under the statutes
administered by the agency and publish the adjusted amounts in the
Federal Register. This Notice sets forth the annual inflation
adjustment of the maximum amount of civil monetary penalties (``CMPs'')
administered by the Commission under the Securities Act of 1933, the
Securities Exchange Act of 1934 (the ``Exchange Act''), the Investment
Company Act of 1940, the Investment Advisers Act of 1940, and certain
penalties under the Sarbanes-Oxley Act of 2002. These amounts are
effective beginning on January 15, 2021, and will apply to all
penalties imposed after that date for violations of the aforementioned
statutes that occurred after November 2, 2015.
FOR FURTHER INFORMATION CONTACT: Stephen M. Ng, Senior Special Counsel,
Office of the General Counsel, at (202) 551-7957, or Hannah W. Riedel,
Senior Counsel, Office of the General Counsel, at (202) 551-7918.
SUPPLEMENTARY INFORMATION:
I. Background
This Notice is being published pursuant to the 2015 Act,\1\ which
amended the Federal Civil Penalties Inflation Adjustment Act of 1990
(the ``Inflation Adjustment Act'').\2\ The Inflation Adjustment Act
previously had been amended by the Debt Collection Improvement Act of
1996 (the ``DCIA'') \3\ to require that each federal agency adopt
regulations at least once every four years that adjust for inflation
the CMPs that can be imposed under the statutes administered by the
agency. Pursuant to this requirement, the Commission previously adopted
regulations in 1996, 2001, 2005, 2009, and 2013 to adjust the maximum
amount of the CMPs that could be imposed under the statutes the
Commission administers.\4\
---------------------------------------------------------------------------
\1\ Public Law 114-74 Sec. 701, 129 Stat. 599-601 (Nov. 2,
2015), codified at 28 U.S.C. 2461 note.
\2\ Public Law 101-410, 104 Stat. 890-892 (1990), codified at 28
U.S.C. 2461 note.
\3\ Public Law 104-134, Title III, Sec. 31001(s)(1), 110 Stat.
1321-373 (1996), codified at 28 U.S.C. 2461 note.
\4\ See Release Nos. 33-7361, 34-37912, IA-1596, IC-22310, dated
November 1, 1996 (effective December 9, 1996), previously found at
17 CFR 201.1001 and Table I to Subpart E of Part 201; Release Nos.
33-7946, 34-43897, IA-1921, IC-24846, dated January 31, 2001
(effective February 2, 2001), previously found at 17 CFR 201.1002
and Table II to Subpart E of Part 201; Release Nos. 33-8530, 34-
51136, IA-2348, IC-26748, dated February 9, 2005 (effective February
14, 2005), previously found at 17 CFR 201.1003 and Table III to
Subpart E of Part 201; Release Nos. 33-9009, 34-59449, IA-2845, IC-
28635, dated February 25, 2009 (effective March 3, 2009), previously
found at 17 CFR 201.1004 and Table IV to Subpart E of Part 201; and
Release Nos. 33-9387, 34-68994, IA-3557, IC-30408, dated February
27, 2013 (effective March 5, 2013), previously found at 17 CFR
201.1005 and Table V to Subpart E of Part 201. The penalty amounts
contained in these releases have now been consolidated into Table I
to 17 CFR 201.1001.
---------------------------------------------------------------------------
The 2015 Act replaces the inflation adjustment formula prescribed
in the DCIA with a new formula for calculating the inflation-adjusted
amount of CMPs. The 2015 Act requires that agencies use this new
formula to re-calculate the inflation-adjusted amounts of the penalties
they administer on an annual basis and publish these new amounts in the
Federal Register by January 15 of each year.\5\ The Commission
previously published the first annual adjustment required by the 2015
Act on January 6, 2017 (the ``2017 Adjustment'').\6\ As part of the
2017 Adjustment, the Commission promulgated 17 CFR 201.1001(a) and
Table I to Subsection 1001, which lists the penalty amounts for all
violations that occurred on or before November 2, 2015. For violations
occurring after November 2, 2015, Subsection 1001(b) provides that the
applicable penalty amounts will be adjusted annually based on the
formula set forth in the 2015 Act. Subsection 1001(b) further provides
that these adjusted amounts will be published in
[[Page 2717]]
the Federal Register and on the Commission's website. The Commission
subsequently published annual adjustments on January 8, 2018 (the
``2018 Adjustment''),\7\ February 20, 2019 (``2019 Adjustment''),\8\
and January 8, 2020 (the ``2020 Adjustment'').\9\
---------------------------------------------------------------------------
\5\ 28 U.S.C. 2461 note Sec. 4.
\6\ Release Nos. 33-10276; 34-79749; IA-4599; IC-32414
(effective Jan. 18, 2017).
\7\ Release Nos. 33-10451; 34-82455; IA-4842; IC-32963
(effective Jan. 15, 2018).
\8\ Release Nos. 33-10604; 34-85118; IA-5111; IC-33373
(effective Jan. 15, 2019). The publication of the 2019 Adjustment in
the Federal Register was delayed due to operation of the
Antideficiency Act during the absence of an appropriations bill to
fund federal government programs between December 22, 2018 and
January 25, 2019.
\9\ Release Nos. 33-10740; 34-87905; IA-5428; IC-33740
(effective Jan. 15, 2020).
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A CMP is defined in relevant part as any penalty, fine, or other
sanction that: (1) Is for a specific amount, or has a maximum amount,
as provided by federal law; and (2) is assessed or enforced by an
agency in an administrative proceeding or by a federal court pursuant
to federal law.\10\ This definition applies to the monetary penalty
provisions contained in four statutes administered by the Commission:
The Securities Act, the Exchange Act, the Investment Company Act, and
the Investment Advisers Act. In addition, the Sarbanes-Oxley Act
provides the Public Company Accounting Oversight Board (the ``PCAOB'')
authority to levy civil monetary penalties in its disciplinary
proceedings pursuant to 15 U.S.C. 7215(c)(4)(D).\11\ The definition of
a CMP in the Inflation Adjustment Act encompasses such civil monetary
penalties.\12\
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\10\ 28 U.S.C. 2461 note Sec. 3(2).
\11\ 15 U.S.C. 7215(c)(4)(D).
\12\ The Commission may by order affirm, modify, remand, or set
aside sanctions, including civil monetary penalties, imposed by the
PCAOB. See Section 107(c) of the Sarbanes-Oxley Act of 2002, 15
U.S.C. 7217. The Commission may enforce such orders in federal
district court pursuant to Section 21(e) of the Exchange Act. As a
result, penalties assessed by the PCAOB in its disciplinary
proceedings are penalties ``enforced'' by the Commission for
purposes of the Inflation Adjustment Act. See Adjustments to Civil
Monetary Penalty Amounts, Release No. 33-8530 (Feb. 4, 2005) [70 FR
7606 (Feb. 14, 2005)].
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II. Adjusting the Commission's Penalty Amounts for Inflation
This Notice sets forth the annual inflation adjustment required by
the 2015 Act for all CMPs under the Securities Act, the Exchange Act,
the Investment Company Act, and the Investment Advisers Act, and
certain civil monetary penalties under the Sarbanes-Oxley Act.
Pursuant to the 2015 Act, the penalty amounts in the 2020
Adjustment are adjusted for inflation by increasing them by the
percentage change between the Consumer Price Index for all Urban
Consumers (``CPI-U'') for October 2019 and the October 2020 CPI-U.\13\
OMB has provided its calculation of this multiplier (the ``CPI-U
Multiplier'') to agencies.\14\ The new penalty amounts are determined
by multiplying the amounts in the 2020 Adjustment by the CPI-U
Multiplier and then rounding to the nearest dollar.
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\13\ 28 U.S.C. 2461 note Sec. 5.
\14\ Office of Management and Budget, Implementation of Penalty
Inflation Adjustments for 2021, Pursuant to the Federal Civil
Penalties Inflation Adjustment Act Improvements Act of 2015
(December 23, 2020), available at https://www.whitehouse.gov/wp-content/uploads/2020/12/M-21-10.pdf. This multiplier represents the
percentage increase between the October 2019 CPI-U and the October
2020 CPI-U, plus 1.
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For example, the CMP for certain insider trading violations by
controlling persons under Exchange Act Section 21A(a)(3) \15\ was
readjusted for inflation as part of the 2020 Adjustment to $2,140,973.
To determine the new CMP under this provision, the Commission
multiplies this amount by the CPI-U Multiplier of 1.01182, and rounds
to the nearest dollar. Thus, the new CMP for Exchange Act Section
21A(a)(3) is $2,166,279.
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\15\ 15 U.S.C. 78u-1(a)(3).
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Below is the Commission's calculation of the new penalty amounts
for the penalties it administers:
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2020
Civil monetary penalty adjustment CPI-U 2021 adjusted
U.S. code citation description penalty multiplier penalty
amounts amounts
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15 U.S.C. 77h-1(g) (Securities Act For natural person......... $8,824 1.01182 $8,928
Sec. 8A(g)). For any other person....... 88,248 1.01182 89,291
For natural person/fraud... 88,248 1.01182 89,291
For any other person/fraud. 441,240 1.01182 446,455
For natural person/fraud/ 176,496 1.01182 178,582
substantial losses or risk
of losses to others or
gains to self.
For any other person/fraud/ 853,062 1.01182 863,145
substantial losses or risk
of losses to others or
gain to self.
15 U.S.C. 77t(d) (Securities Act For natural person......... 9,639 1.01182 9,753
Sec. 20(d)). For any other person....... 96,384 1.01182 97,523
For natural person/fraud... 96,384 1.01182 97,523
For any other person/fraud. 481,920 1.01182 487,616
For natural person/fraud/ 192,768 1.01182 195,047
substantial losses or risk
of losses to others.
For any other person/fraud/ 963,837 1.01182 975,230
substantial losses or risk
of losses to others.
15 U.S.C. 78u(d)(3) (Exchange Act For natural person......... 9,639 1.01182 9,753
Sec. 21(d)(3)). For any other person....... 96,384 1.01182 97,523
For natural person/fraud... 96,384 1.01182 97,523
For any other person/fraud. 481,920 1.01182 487,616
For natural person/fraud/ 192,768 1.01182 195,047
substantial losses or risk
of losses to others or
gains to self.
For any other person/fraud/ 963,837 1.01182 975,230
substantial losses or risk
of losses to others or
gain to self.
15 U.S.C. 78u-1(a)(3) (Exchange Act Insider Trading-- 2,140,973 1.01182 2,166,279
Sec. 21A(a)(3)). controlling person.
15 U.S.C. 78u-2 (Exchange Act Sec. For natural person......... 9,639 1.01182 9,753
21B). For any other person....... 96,384 1.01182 97,523
For natural person/fraud... 96,384 1.01182 97,523
For any other person/fraud. 481,920 1.01182 487,616
[[Page 2718]]
For natural person/fraud/ 192,768 1.01182 195,047
substantial losses or risk
of losses to others.
For any other person/fraud/ 963,837 1.01182 975,230
substantial losses or risk
of losses to others.
15 U.S.C. 78ff(b) (Exchange Act Exchange Act/failure to 569 1.01182 576
Sec. 32(b)). file information
documents, reports.
15 U.S.C. 78ff(c)(1)(B) (Exchange Foreign Corrupt Practices-- 21,410 1.01182 21,663
Act Sec. 32(c)(1)(B)). any issuer.
15 U.S.C. 78ff(c)(2)(B) (Exchange Foreign Corrupt Practices-- 21,410 1.01182 21,663
Act Sec. 32(c)(2)(B)). any agent or stockholder
acting on behalf of issuer.
15 U.S.C. 80a-9(d) (Investment For natural person......... 9,639 1.01182 9,753
Company Act Sec. 9(d)). For any other person....... 96,384 1.01182 97,523
For natural person/fraud... 96,384 1.01182 97,523
For any other person/fraud. 481,920 1.01182 487,616
For natural person/fraud/ 192,768 1.01182 195,047
substantial losses or risk
of losses to others or
gains to self.
For any other person/fraud/ 963,837 1.01182 975,230
substantial losses or risk
of losses to others or
gain to self.
15 U.S.C. 80a-41(e) (Investment For natural person......... 9,639 1.01182 9,753
Company Act Sec. 42(e)). For any other person....... 96,384 1.01182 97,523
For natural person/fraud... 96,384 1.01182 97,523
For any other person/fraud. 481,920 1.01182 487,616
For natural person/fraud/ 192,768 1.01182 195,047
substantial losses or risk
of losses to others.
For any other person/fraud/ 963,837 1.01182 975,230
substantial losses or risk
of losses to others.
15 U.S.C. 80b-3(i) (Investment For natural person......... 9,639 1.01182 9,753
Advisers Act Sec. 203(i)). For any other person....... 96,384 1.01182 97,523
For natural person/fraud... 96,384 1.01182 97,523
For any other person/fraud. 481,920 1.01182 487,616
For natural person/fraud/ 192,768 1.01182 195,047
substantial losses or risk
of losses to others or
gains to self.
For any other person/fraud/ 963,837 1.01182 975,230
substantial losses or risk
of losses to others or
gain to self.
15 U.S.C. 80b-9(e) (Investment For natural person......... 9,639 1.01182 9,753
Advisers Act Sec. 209(e)). For any other person....... 96,384 1.01182 97,523
For natural person/fraud... 96,384 1.01182 97,523
For any other person/fraud. 481,920 1.01182 487,616
For natural person/fraud/ 192,768 1.01182 195,047
substantial losses or risk
of losses to others.
For any other person/fraud/ 963,837 1.01182 975,230
substantial losses or risk
of losses to others.
15 U.S.C. 7215(c)(4)(D)(i) For natural person......... 141,943 1.01182 143,621
(Sarbanes-Oxley Act Sec. For any other person....... 2,838,885 1.01182 2,872,441
105(c)(4)(D)(i)).
15 U.S.C. 7215(c)(4)(D)(ii) For natural person......... 1,064,582 1.01182 1,077,165
(Sarbanes-Oxley Act Sec. For any other person....... 21,291,632 1.01182 21,543,299
105(c)(4)(D)(ii)).
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Pursuant to the 2015 Act and 17 CFR 201.1001, the adjusted penalty
amounts in this Notice (and all penalty adjustments performed pursuant
to the 2015 Act) apply to penalties imposed after the date the
adjustment is effective for violations that occurred after November 2,
2015, the 2015 Act's enactment date. These penalty amounts supersede
the amounts in the 2020 Adjustment.\16\ For violations that occurred on
or before November 2, 2015, the penalty amounts in Table I to 17 CFR
201.1001 continue to apply.\17\
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\16\ The penalty amounts in this Notice are being published in
the Federal Register and will not be added to the Code of Federal
Regulations in accordance with the 2015 Act and 17 CFR 201.1001(b).
See 28 U.S.C. 2461 note Sec. 4(a)(2); 17 CFR 201.1001(b). In
addition to being published in the Federal Register, the penalty
amounts in this Notice will be made available on the Commission's
website at https://www.sec.gov/enforce/civil-penalties-inflation-adjustments.htm, as detailed in 17 CFR 201.1001(b). This website
also lists the penalty amounts for violations that occurred on or
before November 2, 2015.
\17\ 17 CFR 201.1001(a).
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By the Commission.
Dated: January 8, 2021.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-00528 Filed 1-12-21; 8:45 am]
BILLING CODE 8011-01-P
