SECURITIES AND EXCHANGE COMMISSION

COMPARATIVE PRINT OF PROPOSED AMENDMENTS TO THE SECURITIES ACT OF 1933, AS AMENDED

[Deletions in black brackets; additions in italic]

Section 1 would amend paragraph (5) of section 2 of the Securities Act of 1933, as amended, as follows:

"(5) The term 'Commission' means the [Federal Trade Commission] Securities and Exchange Commission."

Section 2 would amend paragraph (6) of section 2 of the Securities Act of 1933, as amended, as follows:

"(6) The term "Territory' means [Alaska,] Hawaii, Puerto Rico, [the Philippine Islands,] Canal Zone, the Virgin Islands, and the insular possessions of the United States."

Section 3 would amend subsection (b) of section 3 of the Securities Act of 1933, as amended, as follows:

"(b) The Commission may from time to time by its rules and regulations, and subject to such terms and conditions as may be prescribed therein, add any class of securities to the securities exempted as provided in this section, if it finds that the enforcement of this title with respect to such securities is not necessary in the public interest and for the protection of investors by reason of the small amount involved or the limited character of the public offering; but no issue of securities shall be exempted under this subsection where the aggregate amount at which such issue is offered to the public exceeds [$300,000 $500,000."

Section 4 would amend subsection (a) of section 9 of the Securities Act of 1933, as amended, as follows:

"(a) Any person aggrieved by an order of the Commission may obtain a review of such order in the Court of Appeals of the United States, within any circuit wherein such person resides or has his principal place of business, or in the Court of Appeals of the District of Columbia, by filing in such court, within sixty days after the entry of such order, a written petition praying that the order of the Commission be modified or be set aside in whole or in part. A copy of such petition shall be forthwith served upon the Commission, and thereupon the Commission shall certify and file in the court a transcript of the record upon which the order complained of was entered. No objection to the order of the Commission shall be considered by the court unless such objection shall have been urged before the Commission. The finding of the Commission as to the facts, if supported by evidence, shall be conclusive. If either party shall apply to the court for leave to adduce additional evidence, and shall show to the satisfaction of the court that such additional evidence is material and that there were reasonable grounds for failure to adduce such evidence in the hearing before the Commission, the court may order such additional evidence to be taken before the Commission and to be adduced upon the hearing in such manner and upon such terms and conditions as to the court may seem proper. The Commission may modify its findings as to the facts, by reason of the additional evidence so taken, and it shall file such modified or new findings, which, if supported by evidence, shall be conclusive, and its recommendation, if any, for the modification or setting aside of the original order. The jurisdiction of the court shall be exclusive and its judgment and decree, affirming, modifying, or setting aside, in whole or in part, any order of the Commission, shall be final, subject to review by the Supreme Court of the United States upon certiorari or certification as provided in [sections 239 and 240 of the Judicial Code, as amended (U.S.C., title 28, secs. 346 and 347)] section 1254 of title 28, United States Code."

Section 5 would amend section 12 of the Securities Act of 1933, as amended, as follows:

"SEC. 12. (a) Any person who

"(1) offers or sells a security in violation of section 5, or

"(2) offers or sells a security (whether or not exempted by the provisions of section 3, other than paragraph (2) of subsection (a) thereof), [by the use of any means or instruments of transportation or communication in interstate commerce or of the mails,] by means of a prospectus or oral communication, which includes an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements,

in the light of the circumstances under which they were made, not misleading (the purchaser not knowing of such untruth or omission), and who shall not sustain the burden of proof that he did not know, and in the exercise of reasonable care could not have known, of such untruth or omission, shall be liable to the person purchasing such security from him, who may sue either at law or in equity in any court of competent jurisdiction, to recover the consideration paid for such security with interest thereon, less the amount of any income received thereon, upon the tender of such security, or for damages if he no longer owns the security []: Provided, That the provisions of clause (2) of this section shall apply only where the mails or any means or instruments of transportation or communication in interstate commerce is used, directly or indirectly, in connection with or in furtherance of such offer or sale or any related act or transaction. "(b) In case any statement or document filed with the Commission in connection with an offering of securities pursuant to an exemption under section 3(b) or section 3 (c), on the date of such statement or document, contained an untrue statement of a material fact or omitted to state a material fact required by the Commission's rules and regulations to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, any person (not knowing of such untruth or omission) who receives or is shown a copy of such statement or document in connection with a purchase of such securities, or who relies directly or indirectly on such untrue statement or omission in connection with such purchase, may, either at law or in equity, in any court of competent jurisdiction, sue the issuer, any person who signed such statement or document, and any person who made or caused to be made such untrue statement or omission therein, to recover the consideration paid for such security with interest thereon, less the amount of any income received thereon, upon the tender of such security to the person sued, or for damages if he no longer owns the security. No person other than the issuer shall be liable as provided herein if he shall sustain the burden of proof that he acted in good faith and did not know of the untruth or omission on which the action is based. Every person who becomes liable to make payment under this subsection may recover contribution as in cases of contract from any person who if sued separately would have been liable to make the same payment, unless the person who has become liable was primarily at fault."

Section 6 would amend section 13 of the Securities Act of 1933, as amended, as follows:

"SEC. 13. No action shall be maintained to enforce any liability created under section 11, [or] section 12(a)(2) or section 12(b) unless brought within one year after the discovery of the untrue statement or the omission, or after such discovery should have been made by the exercise of reasonable diligence, or, if the action is to enforce a liability created under section 12(a) (1), unless brought within one year after the violation upon which it is based. In no event shall any such action be brought to enforce a liability created under section [11] 11, [or] section 12(a) (1) or section 12(b) more than three years after the security was bona fide offered to the public, or under section 12(a)(2) more than three years after the sale."

Section 7 would amend subsection (b) of section 20 of the Securities Act of 1933, as amended, as follows:

"(b) Whenever it shall appear to the Commision that any person [is engaged or about to engage] has engaged, is engaged, or is about to engage in any acts or practices [which constitute or will constitute] constituting a violation of the provisions of this title, or of any rule or regulation prescribed under authority thereof, or that any person has failed to comply with the provisions of this title, any rule or regulation prescribed under authority thereof, or any order of the Commission made in pursuance thereof, it may in its discretion, bring an action in any district court of the United States, United States court or any Territory, or the United States District Court for the District of Columbia to enjoin such acts or practices, and to enforce compliance with this title or any such rule, regulation or order [, and upon]. Upon a proper showing that such person has engaged, is engaged or it about to engage in any such act or practice, or that he has failed to comply with this title or any such rule, regulation, or order, a permanent or temporary injunction, [or] restraining order, or other order shall be granted without bond. The Commission may transmit such evidence as may be available concerning such acts or practices to the Attorney General who may, in his discretion, institute the necessary criminal proceedings under

this title. Any such criminal proceedings may be brought either in the district wherein the transmittal of the prospectus or security complained of begins, or in the district wherein such prospectus or security is received."

Section 8 would repeal subsection (c) of section 20 of the Securities Act of 1933, as amended, as follows:

"[(c) Upon application of the Commission the district courts of the United States, the United States courts of any Territory, and the United States District Court for the District of Columbia, shall also have jurisdiction to issue writs of mandamus commanding any person to comply with the provisions of this title or any order of the Commission made in pursuance thereof.]"

Section 9 would amend subsection (a) of section 22 of the Securities Act of 1933, as amended, as follows:

"(a) The district courts of the United States, the United States courts of any Territory, and the United States District Court for the District of Columbia shall have jurisdiction of offenses and violations under this title and under the rules and regulations promulgated by the Commission in respect thereto, and, concurrent with State and Territorial courts, of all suits in equity and actions at law brought to enforce any liability or duty created by this title. Any such suit or action may be brought in the district wherein the defendant is found or is an inhabitant or transacts business, or in the district where the offer or sale took place, if the defendant participated therein, and process in such cases may be served in any other district of which the defendant is an inhabitant or wherever the defendant may be found. Judgments and decrees so rendered shall be subject to review as provided in [sections 128 and 240 of the Judicial Code, as amended (U.S.C., title 28, secs. 225 and 347).] sections 1254, 1291, 1292, and 1293 of title 28, United States Code. No case arising under this title and brought in any State court of competent jurisdiction shall be removed to any court of the United States. No costs shall be assessed for or against the Commission in any proceeding under this title brought by or against it in the Supreme Court or such other courts."

Section 10 would amend section 24 of the Securities Act of 1933, as amended, as follows:

"Any person who willfully violates any of the provisons of this title, or the rules and regulations promulgated by the Commission under authority thereof, or any person who willfully, in a registration statement, application, report or document filed under this title or any rule or regulation thereunder, makes any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading, shall upon convicion be fined not more than $5,000 or imprisoned not more than five years, or both."

Section 11 would amend the Securities Act of 1933, as amended, by adding the following new section:

" ASSOCIATED PERSONS

"Sec. 29. It shall be unlawful for any person indirectly, or through or by means of any other person, to do any act or thing which it would be unlawful for such person to do directly under the provisions of this title or any rule or regulation thereunder. It shall be unlawful for any person to aid, abet, counsel, command, induce or procure the violation of any provision of this title or any rule or regulation thereunder by any other person. These provisions shall not constitute a limitation with respect to the applicability to this title of section 2 of title 18, United States Code."

SECURITIES ACT OF 1933

AS AMENDED TO AUGUST 10, 1954

[PUBLIC-No. 22-73D CONGRESS]

[H. R. 5480]

AN ACT

To provide full and fair disclosure of the character of securities sold in interstate and foreign commerce and through the mails, and to prevent frauds in the sale thereof, and for other purposes.

Be it enacted by the Senate and House of Representatives
of the United States of America in Congress assembled,

TITLE I