[ by Howard Haykin ]

The SEC announced on Wednesday that it had adopted a revised schedule of civil monetary penalties for the following securities laws:  (i) Securities Act of 1933;  (ii) Securities Exchange Act of 1934;  (Iii) Investment Company Act of 1940;  (iv) Investment Advisers Act of 1940;  and, (v) certain penalties under Sarbanes-Oxley Act of 2002.

The SEC made the changes with the authority provided by the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Debt Collection Improvement Act of 1996.  With the changes, the SEC adjusted for inflation the maximum amount of civil monetary penalties under each of the 5 federal acts.  The effective date of the changes was not announced. 

Background Information.  Under the Debt Collection Improvement Act of 1996 (“DCIA”, as amended, each federal agency is required to adopt regulations at least once every 4 years that adjust for inflation the maximum amount of the civil monetary penalties (“CMPs”) under the statutes administered by the agency.

Penalties are adjusted by the cost-of-living adjustment (COLA)  - defined as the percentage by which the U.S. Department of Labor’s Consumer Price Index for all-urban consumers (“CPI-U”) for the month of June for the year preceding the adjustment exceeds the CPI-U for the month of June for the year in which the amount of the penalty was last set or adjusted pursuant to law.

SEC Staff Contacts.   Questions re: the Final Rule Release may be directed to:   Senior Special James Cappoli, Office of the General Counsel, at (202) 551-7923, or Senior Counsel Miles Treakle, Office of the General Counsel, at (202) 551-3609.

For further details, go to:  [ SEC Final Rule Release Nos. 33-9387; 34-68994; IA-3557; IC-30408,  2/27/13 ].