Criminal Liability Under 1933 Act
Criminal Provisions of the Securities Laws
Written by Jason Gordon
Updated at July 2nd, 2021
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Table of Contents
What is the potential criminal liability for violations of 33 Act?Discussion QuestionAcademic ResearchWhat is the potential criminal liability for violations of 33 Act?
Section 24 of the 33 Act allows the Department of Justice (DOJ) to bring a criminal action against anyone who knowingly and willfully violates the 33 Act. This normally only arises in situations where an issuer commits fraud in the sale of securities. The SEC cannot bring a criminal action itself, but it regularly works in hand with the DOJ to substantiate claims of securities fraud.
Note: Conviction under this provision allows for up to a $10,000 fine and up to 5 years in prison.
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Discussion Question
How do you feel about this consumer fraud statute? Why do you think the DOJ, rather than the SEC, is charged with pursuing criminal charges in securities actions under Section 24?