The SEC adopted a rule to adjust the maximum amounts it may recover for civil monetary penalties imposed under the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Company Act of 1940 and the Investment Advisers Act of 1940 for inflation. The SEC’s new rule-was effective upon publication, and also adjusts certain penalties under the Sarbanes-Oxley Act of 2002.
The rule was adopted pursuant to the Federal Civil Penalties Inflation Adjustment Act of 1990. This statute requires federal agencies to adopt regulations at least once every four years to adjust for inflation the maximum amount of civil monetary penalties in their administered statutes. The adjustments apply to violations after the effective date of the rule change.
This change will increase civil penalties for those subject to SEC actions, and is yet another factor to consider for those in SEC enforcement investigations and proceedings.