The House Subcommittee on Capital Markets, Securities, and Investments held a hearing which reviewed two pieces of legislation that have been introduced:

  • H.R. 2128, the “Due Process Restoration Act of 2017,” introduced by Representative Warren Davidson (R-OH), would amend the Securities and Exchange Act of 1934 to permit private persons to compel the Securities and Exchange Commission to seek legal or equitable remedies in a civil action instead of an administrative proceeding. The bill also provides that in any administrative proceeding a legal or equitable remedy may be imposed on the person against whom the proceeding was brought only on a showing by the SEC of clear and convincing evidence that the person has violated the relevant provision of law.”
  • H.R. 5037, the “Securities Fraud Act of 2018,” introduced by Representative Tom MacArthur (R-NJ), to provide for exclusive Federal jurisdiction over civil securities fraud actions. State securities commissions would retain jurisdiction over:
    • civil enforcement actions with respect to fraud or deceit, or unlawful conduct in connection with securities or securities transactions other than in connection with NYSE and Nasdaq listed securities or transactions of an NYSE or Nasdaq listed security (and senior securities with respect thereto); and
    • criminal enforcement actions with respect to fraud or deceit, or unlawful conduct in connection with a listed security or transactions of a NYSE or Nasdaq listed security(and senior securities with respect thereto) provided such State criminal enforcement actions shall comply in all respects with the legal requirements for securities fraud under Federal law.