15 U.S.C. § 689n: Unlawful acts and omissions…

Summary

If a New Markets Venture Capital company breaks a rule, anyone who helps cause the break — by ordering it, approving it, taking part in it, advising, or aiding it — will also be treated as having broken the rule. Officers, directors, employees, agents, or others who run the company must act in the company’s best interest. If they do something, or fail to do something, that breaks that duty and causes the company to lose money or puts it in clear danger of loss or harm, that is unlawful. Without written permission from the Administrator, a person cannot start or keep serving as an officer, director, employee, agent, or manager of such a company if they have been convicted of a felony or any crime involving dishonesty or breach of trust, or if a court has ordered them to pay damages for fraud or breach of trust or has temporarily or permanently barred them for fraud or breach of trust.

Title 15, §689n

Commerce and Trade, Source: USLM XML via OLRC

(a)Parties deemed to commit a violation

Whenever any New Markets Venture Capital company violates any provision of this chapter, of a regulation issued under this chapter, or of a participation agreement entered into under this chapter, by reason of its failure to comply with its terms or by reason of its engaging in any act or practice that constitutes or will constitute a violation thereof, such violation shall also be deemed to be a violation and an unlawful act committed by any person who, directly or indirectly, authorizes, orders, participates in, causes, brings about, counsels, aids, or abets in the commission of any acts, practices, or transactions that constitute or will constitute, in whole or in part, such violation.

(b)Fiduciary duties

It shall be unlawful for any officer, director, employee, agent, or other participant in the management or conduct of the affairs of a New Markets Venture Capital company to engage in any act or practice, or to omit any act or practice, in breach of the person’s fiduciary duty as such officer, director, employee, agent, or participant if, as a result thereof, the company suffers or is in imminent danger of suffering financial loss or other damage.

(c)Unlawful acts

Except with the written consent of the Administrator, it shall be unlawful—

(1)for any person to take office as an officer, director, or employee of any New Markets Venture Capital company, or to become an agent or participant in the conduct of the affairs or management of such a company, if the person—

(A)has been convicted of a felony, or any other criminal offense involving dishonesty or breach of trust; or

(B)has been found civilly liable in damages, or has been permanently or temporarily enjoined by an order, judgment, or decree of a court of competent jurisdiction, by reason of any act or practice involving fraud, or breach of trust; and

(2)for any person continue to serve in any of the capacities described in paragraph (1), if—

(A)the person is convicted of a felony, or any other criminal offense involving dishonesty or breach of trust; or

(B)the person is found civilly liable in damages, or is permanently or temporarily enjoined by an order, judgment, or decree of a court of competent jurisdiction, by reason of any act or practice involving fraud or breach of trust.

§689n Unlawful Acts and Omissions; Breach of Fiduciary Duty

Summary

Title 15, §689n

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