SECTION 20A OF THE
SECURITIES EXCHANGE ACT OF 1934
15
U.S.C. § 78t-1 (1988)
(a) Private rights of
action based on contemporaneous trading.
Any person who violates any provision of this title or the rules or
regulations thereunder by purchasing or selling a security while in possession
of material, nonpublic information shall be liable in an action in any court of
competent jurisdiction to any person who, contemporaneously with the purchase
or sale of securities that is the subject of such violation, has purchased
(where such violation is based on a sale of securities) or sold (where such
violation is based on a purchase of securities) securities of the same class.
(b) Limitations on
liability.
(1) Contemporaneous trading actions limited
to profit gained or loss avoided. The
total amount of damages imposed under subsection (a) shall not exceed the
profit gained or loss avoided in the transaction or transactions that are the
subject of the violation.
(2) Offsetting disgorgements against
liability. The total amount of damages
imposed against any person under subsection (a) shall be diminished by the
amounts, if any, that such person may be required to disgorge, pursuant to a
court order obtained at the instance of the Commission, in a proceeding brought
under section 21(d) of this title relating to the same transaction or
transactions.
(3) Controlling person liability. No person shall be liable under this section
solely by reason of employing another person who is liable under this section,
but the liability of a controlling person under this section shall be subject
to section 20(a) of this title.
(4) Statute of limitations. No action may be brought under this section
more than 5 years after the date of the last transaction that is the subject of
the violation.
(c) Joint and several
liability for communicating. Any person
who violates any provision of this title or the rules or regulations thereunder
by communicating material, nonpublic information shall be jointly and severally
liable under subsection (a) with, and to the same extent as, any person or
persons liable under subsection (a) to whom the communication was directed.
(d) Authority not to
restrict other express or implied rights of action. Nothing in this section shall be construed to limit or condition
the right of any person to bring an action to enforce a requirement of this
title or the availability of any cause of action implied from a provision of
this title.
(e) Provisions not to
affect public prosecutions. This
section shall not be construed to bar or limit in any manner any action by the
Commission or the Attorney General under any other provision of this title, nor
shall it bar or limit in any manner any action to recover penalties, or to seek
any other order regarding penalties.