15 U.S.C. § 78d–3 — Appearance and practice before the Commission

submitted 92 years ago by Pub. L. 107-204 to r/title-15-COMMERCE-AND-TRADE · 216 words · no verdicts yet

in plain englishAI-generated · not legal advice

After notice and a hearing, the SEC can censure a person or ban them — temporarily or permanently — from practicing before it, if they lack qualifications, lack integrity or acted unethically, or willfully violated securities laws. For accounting firms, the section defines what counts as improper professional conduct.

(a) Authority to censure. The SEC may censure a person, or bar them — for a limited time or permanently — from appearing or practicing before the SEC, if, after notice and a hearing, the SEC finds that person: (1) doesn't have the qualifications needed to represent others; (2) lacks character or integrity, or engaged in unethical or improper professional conduct; or (3) willfully violated, or willfully helped someone else violate, any securities law or related rule or regulation. (b) Definition. For a registered public accounting firm or a person associated with one, "improper professional conduct" means: (1) conduct that is intentional, knowing, or reckless and that breaks applicable professional standards; and (2) negligent conduct that is either (A) a single instance of highly unreasonable conduct violating professional standards, where the firm or person knew or should have known that extra care was called for, or (B) repeated unreasonable conduct, each instance violating professional standards, showing the firm or person isn't competent to practice before the SEC.

the actual law source: uscode.house.gov ↗public domain

(a) Authority to censure

The Commission may censure any person, or deny, temporarily or permanently, to any person the privilege of appearing or practicing before the Commission in any way, if that person is found by the Commission, after notice and opportunity for hearing in the matter—

(1)

not to possess the requisite qualifications to represent others;

(2)

to be lacking in character or integrity, or to have engaged in unethical or improper professional conduct; or

(3)

to have willfully violated, or willfully aided and abetted the violation of, any provision of the securities laws or the rules and regulations issued thereunder.

(b) Definition

With respect to any registered public accounting firm or associated person, for purposes of this section, the term “improper professional conduct” means—

(1)

intentional or knowing conduct, including reckless conduct, that results in a violation of applicable professional standards; and

(2)

negligent conduct in the form of—

(A)

a single instance of highly unreasonable conduct that results in a violation of applicable professional standards in circumstances in which the registered public accounting firm or associated person knows, or should know, that heightened scrutiny is warranted; or

(B)

repeated instances of unreasonable conduct, each resulting in a violation of applicable professional standards, that indicate a lack of competence to practice before the Commission.

Source credit: (June 6, 1934, ch. 404, title I, § 4C, as added Pub. L. 107–204, title VI, § 602, July 30, 2002, 116 Stat. 794.)

history & why it existsrecord from the source credit

1934Enacted · Pub. L. 107-204 · 116 Stat. 794

A history note hasn’t been published yet. The record shows enactment by Pub. L. 107-204 on 1934-06-06.

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