Securities Enforcement Remedies and Penny Stock Reform Act of 1990
Public Law 101-429 · S. 647 · 101st Congress · began in the Senate
Signed by George H. W. Bush (R) on Oct 15, 1990 · Finance and Financial Sector
Sponsor: Sen. Christopher Dodd (D-CT)
Cosponsors (1): Sen. Henry Heinz
Passage votes
- HouseVoice vote
- SenateVoice vote
Data notes
The final version of the law, as each chamber passed it. A chamber that passed it by voice vote or unanimous consent has no count. “Method not stated” means the record does not say how the chamber voted. Where the record has a member-by-member vote, the “Who voted for it” section shows who voted yea.
Summary
The Congressional Research Service’s plain-language summary of what the law does.
Securities Enforcement Remedies and Penny Stock Reform Act of 1990 - Title I: Amendments to the Securities Act of 1933 - Amends the Securities Act of 1933 to establish tiered civil money penalties for violations. Permits a court to prohibit violators from serving as officers and directors of securities-issuing entities.
Authorizes the Securities and Exchange Commission (SEC) to issue: (1) cease and desist orders; (2) temporary restraining orders; and (3) orders for accounting and disgorgement.
Title II: Amendments to the Securities Exchange Act of 1934 - Amends the Securities Exchange Act of 1934 to: (1) authorize a court to prohibit individuals from acting as officers or directors of securities-issuing entities if they have demonstrated a substantial unfitness to serve in that capacity; and (2) impose tiered civil money penalties for violations of such Act. Sets forth circumstances under which the SEC (or the appropriate regulatory agency) may: (1) impose tiered civil money penalties pursuant to administrative findings of violations of the Act; (2) enter an order requiring an accounting and disgorgement; (3) issue cease and desist orders; and (4) issue temporary restraining orders. Requires the SEC to establish regulations providing for the expeditious conduct of hearings and rendering of decisions in cease and desist order proceedings.
Prohibits a registered transfer agent from engaging in any activity in connection with the guarantee of a signature of an endorser of a security, including the acceptance or rejection of such guarantee, in contravention of SEC rules and regulations.
Title III: Amendments to the Investment Company Act of 1940 - Amends the Investment Company Act of 1940 to authorize the SEC to impose civil remedies pursuant to civil and administrative proceedings, including: (1) tiered money penalties; (2) orders requiring an accounting and disgorgement; (3) cease and desist orders; and (4) temporary restraining orders.
Title IV: Amendments to the Investment Advisers Act of 1940 - Amends the Investment Advisers Act of 1940 to authorize the SEC to impose civil remedies pursuant to administrative and civil proceedings, including: (1) tiered money penalties; (2) orders requiring an accounting and disgorgement; (3) cease and desist orders; and (4) temporary restraining orders.
Title V: Penny Stock Reform - Penny Stock Reform Act of 1990 - Amends the Securities Exchange Act of 1934 to define "penny stock" securities and to extend regulatory authority over persons engaged in penny stock activities. Requires the SEC to prescribe rules implementing such authority by a specified deadline.
Empowers the SEC to exclude persons from participating in penny stock distributions if they have violated certain registration regulations. Requires the SEC to make recommendations to each House of Congress on further revision of such Act, including the possibility of expanding its applicability.
Prescribes requirements for brokers and dealers in penny stock transactions, including guidelines for mandatory risk disclosure statements.
Requires the SEC to: (1) facilitate the establishment of automated penny stock quotation systems according to specified guidelines; and (2) submit annual status reports to the Congress.
Authorizes the SEC to designate rules whose violation shall not automatically render a contract void.
Amends the Securities Act of 1933 to require the SEC to prescribe special rules for registration statements filed by any issuer that is a blank check company (one with no specific business plan or purpose, or whose intent is to merge with an unidentified company). Authorizes such rules to include the right of shareholder rescission.
Amends the Securities Exchange Act of 1934 to require registered securities associations to establish a toll-free consumer hotline regarding broker-dealer disciplinary history.
Requires the Comptroller General to report to the Congress on the results of a review of the oversight and enforcement activities of self-regulatory organizations under the Securities Exchange Act of 1934 with respect to penny stocks.
Committees
The committees the bill was sent to, and what each did with it.
Banking, Housing, and Urban Affairs Committee · Senate · markup by, referred to, reported bySubcommittee: Securities, Insurance, and Investment Subcommittee
Data notes
A committee links to its page only where it exists in the current Congress; older and renamed committees are named without a link.
Timeline
From introduction to signing, newest first: the committees, the floor and the president. 20 actions.
- Oct 15, 1990Became lawBecame law · Became Public Law No: 101-429.
- Became lawBecame law · Signed by President.
- Oct 4, 1990PresidentPresident · Presented to President.
- Oct 1, 1990Resolving differencesResolving differences · Motion to reconsider laid on the table Agreed to without objection.
- Resolving differencesResolving differences · On motion that the House agree to the Senate amendment to the House amendments Agreed to by voice vote.
- Resolving differencesResolving differences · Mr. Rinaldo demanded a second on the motion to suspend the rules. Without objection a second was ordered.
- Resolving differencesResolving differences · Mr. Markey moved that the House suspend the rules and agree to the Senate amendment to the House amendments.
- Sep 27, 1990Resolving differencesResolving differences · Senate concurred in the House amendments with an amendment and agree to the House title amendment by Voice Vote.
- Jul 23, 1990FloorFloor · Motion to reconsider laid on the table Agreed to without objection.
- FloorFloor · The title of the measure was amended to that of similar measure H.R. 5325. Agreed to without objection.
- FloorFloor · A similar measure H.R. 5325 was laid on the table without objection.
- FloorFloor · On passage Passed without objection.
- FloorFloor · The House struck all after the enacting clause and inserted in lieu thereof the provisions of a similar measure H.R. 5325. Agreed to without objection.
- FloorFloor · Considered by unanimous consent.
- Jul 18, 1990FloorFloor · Passed Senate with an amendment by Voice Vote.
- Jun 26, 1990CommitteeCommittee · Reported by Senate Banking, Housing, and Urban Affairs Committee
- May 24, 1990CommitteeCommittee · Markup by Senate Banking, Housing, and Urban Affairs Committee
- Feb 8, 1990CommitteeCommittee · Hearings by Securities, Insurance, and Investment Subcommittee of the Senate Banking, Housing, and Urban Affairs Committee
- Mar 17, 1989CommitteeCommittee · Referred to Senate Banking, Housing, and Urban Affairs Committee
- IntroducedIntroduced · Introduced in the Senate
Data notes
Shows the introduction, each committee and subcommittee step the source dates (referral, hearings, markup, report, discharge), and the floor, conference, presidential and became-law steps. Calendar placements, messages between the chambers, amendments and committee report numbers are not shown for laws before the 108th Congress. Two entries the source lists twice are shown once.
Official record
The bill’s full text and every action, including introduction and committee steps, are on Congress.gov. Data through Oct 7, 2026.