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The bill reduces duplicate penalties and makes civil-penalty calculations more predictable for regulated firms, but at the cost of smaller recoveries for victims, weaker deterrence against repeated misconduct, and potential new litigation over what counts as a single originating cause.
Financial institutions and small businesses will face fewer separate penalty counts when multiple violations arise from the same root cause, reducing duplicative fines for regulated firms.
Regulated entities (especially financial firms) will see more predictable and streamlined civil-penalty calculations, improving compliance planning and reducing regulatory uncertainty.
Investors and other harmed parties may receive smaller total monetary remedies because multiple harms can be aggregated into a single violation, reducing compensation for victims.
Financial institutions and investors may face weaker deterrence because lowering potential penalties for serial or repeated noncompliance that share a common cause reduces the cost of misconduct.
Financial institutions and investors could incur higher legal costs because parties are likely to litigate whether separate acts qualify as arising from a 'common or substantially overlapping originating cause' or the 'same misstatement.'
Based on analysis of 2 sections of legislative text.
Related or continuing securities-law violations that share a common cause, the same misstatement, or a continuing failure are counted as a single violation for civil penalty calculations across major securities statutes.
Introduced January 7, 2025 by Pete Sessions · Last progress January 7, 2025
Makes a uniform change to how civil penalties are counted under key federal securities laws: when multiple violations arise from the same root cause, the same misstatement or omission, or from a continuing failure to comply, they are counted as a single violation for penalty purposes. The rule is added across the Securities Act, the Exchange Act, the Investment Company Act, and the Investment Advisers Act so agencies and courts will apply the same aggregation test in similar cases.