PRIOR PRINTER'S NO. 649 PRINTER'S NO. 805
No. 547 Session of 2003
INTRODUCED BY GANNON, HASAY, JAMES, BOYES, BLAUM, BROWNE, HANNA,
HARPER, HUTCHINSON, LEWIS, MANDERINO, NICKOL, PALLONE,
STETLER, TURZAI, WALKO AND GEIST, MARCH 3, 2003
AS REPORTED FROM COMMITTEE ON COMMERCE, HOUSE OF
REPRESENTATIVES, AS AMENDED, MARCH 5, 2003
AN ACT
1 Amending the act of December 5, 1972 (P.L.1280, No.284),
2 entitled "An act relating to securities; prohibiting
3 fraudulent practices in relation thereto; requiring the
4 registration of broker-dealers, agents, investment advisers,
5 and securities; and making uniform the law with reference
6 thereto," providing for assessments.
7 The General Assembly of the Commonwealth of Pennsylvania
8 hereby enacts as follows:
9 Section 1. Section 602.1(c)(1) of the act of December 5,
10 1972 (P.L.1280, No.284), known as the Pennsylvania Securities
11 Act of 1972, amended July 4, 2002 (P.L.721, No.108), is amended
12 to read:
13 Section 602.1. Assessments.--* * *
14 (c) After giving notice and opportunity for a hearing, the
15 commission may issue an order accompanied by written findings of
16 fact and conclusions of law which imposes an administrative
17 assessment in the amounts provided in paragraph (1) against a
18 broker-dealer, agent, investment adviser or investment adviser
19 representative registered under section 301 or an affiliate of
1 any broker-dealer or investment adviser where the commission
2 determines that the person willfully has violated this act or a
3 rule or order of the commission under this act or has engaged in
4 dishonest or unethical practices in the securities business; has
5 taken unfair advantage of a customer; or has failed reasonably
6 to supervise its agents or employes or against any other person
7 if the commission determines that the person wilfully violated
8 section 301, 401, 404, 406 through 409 or 512(d) or a cease and
9 desist order issued by the commission under section 606(c.1).
10 (1) The commission, in issuing an order under this
11 subsection, may impose the administrative assessments set forth
12 below. Each act or omission that provides a basis for issuing an
13 order under this subsection shall constitute a separate
14 violation.
15 (i) In issuing an order against any broker-dealer, agent,
16 investment adviser or investment adviser representative
17 registered under section 301 or an affiliate of any broker-
18 dealer or investment adviser, the commission may impose [an] a
19 maximum administrative assessment of up to [fifty] one hundred
20 thousand dollars [($50,000)] ($100,000) for [a single violation
21 or up to five hundred thousand dollars ($500,000) for multiple
22 violations in a single proceeding or a series of related
23 proceedings.] each act or omission that constitutes a violation
24 of the act or rule or order issued under section 301 THIS ACT. <--
25 If any of the victims of the person's violative conduct were
26 individuals aged 60 or more, the commission also may impose a
27 special administrative assessment in addition to the foregoing
28 amounts of up to fifty thousand dollars ($50,000).
29 (ii) In issuing an order against a person for wilful
30 violation of section 401(a) or (c), 404, 406, 408, 409 or 512(d)
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1 or for wilful violation of a cease and desist order issued under
2 section 606(c.1), the commission may impose [an] a maximum
3 administrative assessment of up to [fifty] one hundred thousand
4 dollars [($50,000)] ($100,000) for [a single violation or up to
5 three hundred thousand dollars ($300,000) for multiple
6 violations in a single proceeding or a series of related
7 proceedings.] each act or omission that constitutes a violation
8 of any of those sections. In addition to the foregoing
9 assessment, the commission also may impose a special
10 administrative assessment of up to fifty thousand dollars
11 ($50,000) for each of the provisions described as follows that
12 the commission determines are applicable:
13 (A) The person, within seven years prior to the commission
14 taking action under this subsection, was the subject of: a
15 criminal felony conviction; an injunction issued by any court of
16 competent jurisdiction; or an order of the Securities and
17 Exchange Commission, the Commodity Futures Trading Commission,
18 the securities, banking or insurance regulator of another state,
19 a Federal banking regulator or the securities, banking or
20 insurance regulatory authority of another country which found
21 that the person wilfully had violated any provision of the
22 Federal or state securities, banking, insurance, or commodities
23 laws or the securities, commodities, insurance or banking laws
24 of another country.
25 (B) The person's violative conduct involved individuals aged
26 60 or more.
27 (C) The person's violative conduct involved use of the
28 Internet or boiler room tactics which included, without
29 limitation, use of any high-pressure sales tactics designed to
30 create an artificially short time period for which the person
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1 being solicited is pressured to make an investment decision or
2 overcome the person's reluctance to commit to the investment
3 being offered, use of scripts designed to allay any objections
4 or concerns expressed by the person being solicited or making
5 repeated telephone calls or sending multiple e-mail messages to
6 the same person pressuring the person to make an immediate
7 investment decision.
8 (iii) In issuing an order against a person for wilful
9 violation of section 401(b) or 407, the commission may impose an
10 administrative assessment of up to [twenty-five thousand dollars
11 ($25,000)] fifty thousand dollars ($50,000) for each of the
12 criteria described in subclause (ii)(A) and (C) that the
13 commission determines are applicable. No assessment shall be
14 imposed under this subclause if the person is subject to an
15 administrative assessment imposed under any other provision of
16 this subsection.
17 (iv) In issuing an order against a person, other than a
18 federally covered adviser, for wilful violation of section 301,
19 the commission may impose the following administrative
20 assessments [unless the person is subject to] which may be in
21 addition to an administrative assessment imposed under any other
22 provision of this subsection [or the public proceeding to which
23 the assessment relates was instituted prior to the date of
24 enactment of this subclause]:
25 (A) For a person who at the time of the wilful violation was
26 not registered under section 301, was not registered as a broker
27 or dealer with the United States Securities and Exchange
28 Commission under the Securities Exchange Act of 1934 (48 Stat.
29 881, 15 U.S.C. § 78a et seq.) and was not a member of a national
30 securities association registered under that act, the commission
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1 may impose [an] a maximum administrative assessment of up to
2 fifty thousand dollars ($50,000) for [a single violation or up
3 to two hundred fifty thousand dollars ($250,000) for multiple
4 violations in a single proceeding or series of related
5 proceedings] each act or omission which constitutes a violation
6 of section 301.
7 (B) For a person (not an individual) that at the time of the
8 wilful violation was not registered under section 301 but was
9 registered as a broker or dealer with the United States
10 Securities and Exchange Commission under the Securities Exchange
11 Act of 1934 and was a member of a national securities
12 association registered under that act, the commission may impose
13 [an] a maximum administrative assessment of up to fifty thousand
14 dollars ($50,000) for [a single violation or up to three hundred
15 thousand dollars ($300,000) for multiple violations in a single
16 proceeding or series of related proceedings] each act or
17 omission which constitutes a violation of section 301. An
18 assessment imposed under this subclause shall be in addition to
19 any liability a person may have under an order issued under
20 section 514.
21 (v) In issuing an order for wilful violation of section
22 301(c.1)(1)(ii) against a person that is a federally covered
23 adviser, the commission may impose the following administrative
24 assessments:
25 (A) Up to one hundred thousand dollars ($100,000) if the
26 number of investment adviser representatives involved in the
27 violation was less than five.
28 (B) Up to two hundred thousand dollars ($200,000) if the
29 number of investment adviser representatives involved in the
30 violation was five or more.
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1 (vi) In issuing an order for a wilful violation of section
2 301(f) against a person that is a federally covered adviser, the
3 commission may impose an administrative assessment of two
4 thousand dollars ($2,000).
5 * * *
6 Section 2. This act shall take effect in 60 days.
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