§77o — Title 15 Commerce and Trade | U.S. Code

Summary

Anyone who controls another person—by owning stock, acting as an agent, by agreement, or in any other way—can be held legally responsible for that person's violations of the covered securities rules. The controller can be made to pay or face the same claims as the controlled person unless the controller did not know and had no reasonable reason to believe the facts that created the liability. When the SEC brings an enforcement case under its powers, anyone who knowingly or recklessly gives substantial help to a person violating these securities rules will be treated as having violated the rules to the same degree.

Title 15, §77o

Commerce and Trade — Source: USLM XML via OLRC

(a)Every person who, by or through stock ownership, agency, or otherwise, or who, pursuant to or in connection with an agreement or understanding with one or more other persons by or through stock ownership, agency, or otherwise, controls any person liable under section 77k or 77l of this title, shall also be liable jointly and severally with and to the same extent as such controlled person to any person to whom such controlled person is liable, unless the controlling person had no knowledge of or reasonable ground to believe in the existence of the facts by reason of which the liability of the controlled person is alleged to exist.

(b)For purposes of any action brought by the Commission under subparagraph (b) or (d) of section 77t of this title, any person that knowingly or recklessly provides substantial assistance to another person in violation of a provision of this subchapter, or of any rule or regulation issued under this subchapter, shall be deemed to be in violation of such provision to the same extent as the person to whom such assistance is provided.

Notes & Related Subsidiaries

Editorial Notes

Amendments

2010—Pub. L. 111–203 designated existing provisions as subsec. (a), inserted heading, and added subsec. (b). 1934—Act June 6, 1934, exempted from liability controlling persons having no knowledge or reasonable grounds for belief.

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.

§77o Liability of Controlling Persons

Summary

Title 15, §77o

Notes & Related Subsidiaries

Editorial Notes

Amendments

Statutory Notes and Related Subsidiaries

Effective Date

Effective Date

Citations & Metadata