PRIA Logo™
Take the PRIA Score
Title 15 — Commerce and TradeRelease 119-73

§78cc Validity of contracts

Title 15 › Chapter CHAPTER 2B— - SECURITIES EXCHANGES › § 78cc

Last updated Apr 6, 2026|Official source

Summary

Makes any deal that forces someone to give up rights under the securities laws or the rules of a self-regulatory group invalid. Any contract made or carried out in a way that breaks these laws or rules is void for people who made or helped carry out the illegal deal, and for people who got rights from it when they had actual knowledge that it was illegal. But contracts are not automatically void for violations of rules made under section 78o(c)(3). If the broken rule is under section 78o(c)(1) or (2) and a broker or dealer bought or sold the security, a suit to void the contract must be brought within one year after discovering the violation and within three years after the violation. The Commission can also say that some rules under 78o(c)(2) will not void contracts. Loans, credit extensions, and liens stay valid unless the lender or lien holder had actual knowledge at the time that the loan, credit, or lien broke these laws. A person who buys a debt or lien in good faith for value and without actual knowledge of the violation cannot use these rules to avoid paying or enforcing it.

Full Legal Text

Title 15, §78cc

Commerce and Trade — Source: USLM XML via OLRC

(a)Any condition, stipulation, or provision binding any person to waive compliance with any provision of this chapter or of any rule or regulation thereunder, or of any rule of a self-regulatory organization, shall be void.
(b)Every contract made in violation of any provision of this chapter or of any rule or regulation thereunder, and every contract (including any contract for listing a security on an exchange) heretofore or hereafter made, the performance of which involves the violation of, or the continuance of any relationship or practice in violation of, any provision of this chapter or any rule or regulation thereunder, shall be void (1) as regards the rights of any person who, in violation of any such provision, rule, or regulation, shall have made or engaged in the performance of any such contract, and (2) as regards the rights of any person who, not being a party to such contract, shall have acquired any right thereunder with actual knowledge of the facts by reason of which the making or performance of such contract was in violation of any such provision, rule, or regulation: Provided, (A) That no contract shall be void by reason of this subsection because of any violation of any rule or regulation prescribed pursuant to paragraph (3) of subsection (c) of section 78o of this title, and (B) that no contract shall be deemed to be void by reason of this subsection in any action maintained in reliance upon this subsection, by any person to or for whom any broker or dealer sells, or from or for whom any broker or dealer purchases, a security in violation of any rule or regulation prescribed pursuant to paragraph (1) or (2) of subsection (c) of section 78o of this title, unless such action is brought within one year after the discovery that such sale or purchase involves such violation and within three years after such violation. The Commission may, in a rule or regulation prescribed pursuant to such paragraph (2) of such section 78o(c) of this title, designate such rule or regulation, or portion thereof, as a rule or regulation, or portion thereof, a contract in violation of which shall not be void by reason of this subsection.
(c)Nothing in this chapter shall be construed (1) to affect the validity of any loan or extension of credit (or any extension or renewal thereof) made or of any lien created prior or subsequent to the enactment of this chapter, unless at the time of the making of such loan or extension of credit (or extension or renewal thereof) or the creating of such lien, the person making such loan or extension of credit (or extension or renewal thereof) or acquiring such lien shall have actual knowledge of facts by reason of which the making of such loan or extension of credit (or extension or renewal thereof) or the acquisition of such lien is a violation of the provisions of this chapter or any rule or regulation thereunder, or (2) to afford a defense to the collection of any debt or obligation or the enforcement of any lien by any person who shall have acquired such debt, obligation, or lien in good faith for value and without actual knowledge of the violation of any provision of this chapter or any rule or regulation thereunder affecting the legality of such debt, obligation, or lien.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

References in Text

This chapter, referred to in text, was in the original “this title”. See

References in Text

note set out under section 78a of this title.

Amendments

2010—Subsec. (a). Pub. L. 111–203, §§ 927, 929T, amended subsec. (a) identically, substituting “a self-regulatory organization,” for “an exchange required thereby”. 1990—Subsec. (b). Pub. L. 101–429 substituted in cl. (A) “paragraph (3)” for “paragraph (2) or (3)” and in cl. (B) “paragraph (1) or (2)” for “paragraph (1)”, and inserted at end “The Commission may, in a rule or regulation prescribed pursuant to such paragraph (2) of such section 78o(c) of this title, designate such rule or regulation, or portion thereof, as a rule or regulation, or portion thereof, a contract in violation of which shall not be void by reason of this subsection.” 1938—Subsec. (b). Act June 25, 1938, inserted proviso.

Statutory Notes and Related Subsidiaries

Effective Date

of 2010 AmendmentAmendment by Pub. L. 111–203 effective 1 day after July 21, 2010, except as otherwise provided, see section 4 of Pub. L. 111–203, set out as an

Effective Date

note under section 5301 of Title 12, Banks and Banking.

Effective Date

of 1990 AmendmentAmendment by Pub. L. 101–429 effective Oct. 15, 1990, with provisions relating to civil penalties and accounting and disgorgement, see section 1(c)(1), (2) of Pub. L. 101–429, set out in a note under section 77g of this title.

Reference

Citations & Metadata

Citation

15 U.S.C. § 78cc

Title 15 — Commerce and Trade

Last Updated

Apr 6, 2026

Release point: 119-73