82 FR 5367 - Adjustments to Civil Monetary Penalty Amounts
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 11 (January 18, 2017)
Federal Register Volume 82, Issue 11 (January 18, 2017)
| Page Range | 5367-5373 | |
| FR Document | 2017-00421 |
[Federal Register Volume 82, Number 11 (Wednesday, January 18, 2017)] [Rules and Regulations] [Pages 5367-5373] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-00421] ======================================================================= ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION 17 CFR Part 201 [Release Nos. 33-10276; 34-79749; IA-4599; IC-32414] Adjustments to Civil Monetary Penalty Amounts AGENCY: Securities and Exchange Commission. ACTION: Final rule. ----------------------------------------------------------------------- SUMMARY: The Securities and Exchange Commission (the ``Commission'') is adopting a final rule to implement the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (the ``2015 Act''), which amended the Federal Civil Penalties Inflation Adjustment Act of 1990 (the ``Inflation Adjustment Act''), as previously amended by the Debt Collection Improvement Act of 1996 (the ``DCIA''). The 2015 Act requires all agencies to annually adjust for inflation the civil monetary penalties that can be imposed under the statutes administered by the agency. Pursuant to this requirement, this final rule performs the first annual adjustment for inflation of the maximum amount of civil monetary penalties administered by the Commission under the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Company Act of 1940, the Investment Advisers Act of 1940, and certain penalties under the Sarbanes-Oxley Act of 2002. This adjustment will apply to all penalties imposed after the effective date of this final rule for violations after November 2, 2015. For violations that occurred on or before November 2, 2015, the Commission is reinstating the penalty amounts in the Commission's prior penalty adjustments performed under the DCIA. DATES: Effective Date: January 18, 2017. FOR FURTHER INFORMATION CONTACT: James A. Cappoli, Assistant General Counsel, Office of the General Counsel, at (202) 551-7923, or Stephen M. Ng, Senior Counsel, Office of the General Counsel, at (202) 551- 7957. SUPPLEMENTARY INFORMATION: I. Background This final rule implements the 2015 Act,\1\ which amended the Inflation Adjustment Act.\2\ The Inflation Adjustment Act previously had been amended by the DCIA \3\ to require that each federal agency adopt regulations at least once every four years that adjust for inflation the civil monetary penalties (``CMPs'') that could be imposed under the statutes administered by the agency. Pursuant to the requirements of the DCIA, the Commission previously adopted regulations in 1996, 2001, 2005, 2009, and 2013 to adjust the maximum amount of the CMPs that could be imposed under the statutes the Commission administers.\4\ --------------------------------------------------------------------------- \1\ Public Law 114-74 Sec. 701, 129 Stat. 599-601 (Nov. 2, 2015), codified at 28 U.S.C. 2461 note. \2\ Public Law 101-410, 104 Stat. 890-892 (1990), codified at 28 U.S.C. 2461 note. \3\ Public Law 104-134, Title III, Sec. 31001(s)(1), 110 Stat. 1321-373 (1996), codified at 28 U.S.C. 2461 note. \4\ See Release Nos. 33-7361, 34-37912, IA-1596, IC-22310, dated November 1, 1996 (effective December 9, 1996), previously found at 17 CFR 201.1001 and Table I to Subpart E of Part 201; Release Nos. 33-7946, 34-43897, IA-1921, IC-24846, dated January 31, 2001 (effective February 2, 2001), previously found at 17 CFR 201.1002 and Table II to Subpart E of Part 201; Release Nos. 33-8530, 34- 51136, IA-2348, IC-26748, dated February 9, 2005 (effective February 14, 2005), previously found at 17 CFR 201.1003 and Table III to Subpart E of Part 201; Release Nos. 33-9009, 34-59449, IA-2845, IC- 28635, dated February 25, 2009 (effective March 3, 2009), previously found at 17 CFR 201.1004 and Table IV to Subpart E of Part 201; and Release Nos. 33-9387, 34-68994, IA-3557, IC-30408, dated February 27, 2013 (effective March 5, 2013), previously found at 17 CFR 201.1005 and Table V to Subpart E of Part 201. --------------------------------------------------------------------------- [[Page 5368]] The 2015 Act replaces the inflation adjustment mechanism prescribed in the DCIA with a new mechanism for calculating the inflation-adjusted amount of CMPs. Each agency was first required to use this new mechanism to adjust the maximum amount of its CMPs \5\ in an initial ``catch-up'' adjustment.\6\ Pursuant to this requirement, the Commission issued an interim final rule adjusting its CMPs on June 27, 2016 (the ``June 2016 interim final rule'').\7\ After performing the catch-up adjustment, each agency must now perform annual adjustments for inflation, and publish these adjustments in the Federal Register by January 15 of each calendar year.\8\ --------------------------------------------------------------------------- \5\ The 2015 Act also applies to minimum penalty amounts and penalty ranges. See 28 U.S.C. 2461 note Sec. 5(a). All of the statutes administered by the Commission, however, only include maximum penalty amounts. Thus, in this final rule, we only refer to the effect of the 2015 Act on maximum penalty amounts. \6\ 28 U.S.C. 2461 note Sec. 4(b)(1); Office of Management and Budget, Implementation of the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (February 24, 2016) (``2016 OMB Guidance'') at 1, available at https://www.whitehouse.gov/sites/default/files/omb/memoranda/2016/m-16-06.pdf. \7\ Release Nos. 33-10104; 34-78156; IA-4437; IC-32162 (June 27, 2016). \8\ 28 U.S.C. 2461 note Sec. 4; 2016 OMB Guidance at 4. --------------------------------------------------------------------------- A CMP is defined in relevant part as any penalty, fine, or other sanction that: (1) Is for a specific amount, or has a maximum amount, as provided by federal law; and (2) is assessed or enforced by an agency in an administrative proceeding or by a federal court pursuant to federal law.\9\ This definition applies to the monetary penalty provisions contained in four statutes administered by the Commission: The Securities Act of 1933; the Securities Exchange Act of 1934 (the ``Exchange Act''); the Investment Company Act of 1940; and the Investment Advisers Act of 1940. In addition, the Sarbanes-Oxley Act of 2002 provides the Public Company Accounting Oversight Board (the ``PCAOB'') authority to levy civil monetary penalties in its disciplinary proceedings pursuant to 15 U.S.C. 7215(c)(4)(D).\10\ The definition of a CMP in the Inflation Adjustment Act encompasses such civil monetary penalties.\11\ --------------------------------------------------------------------------- \9\ 28 U.S.C. 2461 note Sec. 3(2). \10\ 15 U.S.C. 7215(c)(4)(D). \11\ The Commission may by order affirm, modify, remand, or set aside sanctions, including civil monetary penalties, imposed by the PCAOB. See Section 107(c) of the Sarbanes-Oxley Act of 2002, 15 U.S.C. 7217. The Commission may enforce such orders in federal district court pursuant to Section 21(e) of the Securities Exchange Act of 1934. As a result, penalties assessed by the PCAOB in its disciplinary proceedings are penalties ``enforced'' by the Commission for purposes of the Inflation Adjustment Act. See Adjustments to Civil Monetary Penalty Amounts, Release No. 33-8530 (Feb. 4, 2005) [70 FR 7606 (Feb. 14, 2005)]. --------------------------------------------------------------------------- II. Adjusting the Commission's Penalty Amounts for Inflation This final rule implements the first of the required annual adjustments under the 2015 Act for all penalties under the Securities Act, the Exchange Act, the Investment Company Act, and the Investment Advisers Act, and certain penalties under the Sarbanes-Oxley Act. As the baseline in calculating these new penalty amounts, the Commission uses the penalty amounts in the Commission's June 2016 interim final rule. The penalty amounts in that interim final rule used the new inflation adjustment mechanism in the 2015 Act as part of the ``catch-up adjustment'' required by that Act. The Commission affirms that the amounts in the June 2016 interim final rule were correct and that the adjusted amounts were appropriate.\12\ --------------------------------------------------------------------------- \12\ The 2015 Act provided that agencies could seek approval from OMB to reduce the amount of the catch-up adjustment required by the 2015 Act (a ``reduced catch-up determination'') if: (1) The otherwise required increase of the maximum amount of the CMPs administered by the agency would have a negative economic impact, or (2) the social costs of adopting the otherwise required increase of the maximum amount of these CMPs would outweigh the benefits. See 28 U.S.C. 2461 note Sec. 4(c); 2016 OMB Guidance at 3. As part of the June 2016 interim final rule, the Commission determined that it was not necessary to seek a reduced catch-up adjustment determination, but requested comments on whether the Commission should reconsider this decision. See Release No. 33-10104 at 8. The Commission did not receive any comments on this topic and the Commission affirms its decision not to seek a reduced catch-up adjustment determination. --------------------------------------------------------------------------- Pursuant to the 2015 Act, the Commission now adjusts the penalty amounts in the June 2016 interim final rule by multiplying these amounts by the percentage change between the Consumer Price Index for all Urban Consumers (``CPI-U'') for October 2015, and the October 2016 CPI-U.\13\ OMB has provided its calculation of this multiplier (the ``CPI-U Multiplier'') to agencies.\14\ After multiplying the June 2016 interim final rule amounts by this multiplier, the Commission must round all penalty amounts to the nearest dollar to determine the new inflation-adjusted penalty amounts. --------------------------------------------------------------------------- \13\ 28 U.S.C. 2461 note Sec. 5. \14\ Office of Management and Budget, Implementation of the 2017 Annual Adjustment Pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Dec. 16, 2016) (``2017 OMB Guidance'') at 1, available at https://www.whitehouse.gov/sites/default/files/omb/memoranda/2017/m-17-11_0.pdf. --------------------------------------------------------------------------- For example, the CMP for certain insider trading violations by controlling persons under Exchange Act Section 21A(a)(3) \15\ was readjusted for inflation on August 1, 2016, to $1,978,690. To determine the new CMP under this provision, the Commission multiplies the current CMP by the CPI-U Multiplier of 1.01636, and rounds to the nearest dollar. Thus, the new CMP for Exchange Act Section 21A(a)(3) is $2,011,061. --------------------------------------------------------------------------- \15\ 15 U.S.C. 78u-1(a)(3). --------------------------------------------------------------------------- Below is the Commission's calculation of the new penalty amounts for the penalties it administers. ---------------------------------------------------------------------------------------------------------------- Penalty amounts in New adjusted U.S. code citation Civil monetary penalty June 2016 CPI-U penalty description interim final multiplier amounts rule ---------------------------------------------------------------------------------------------------------------- 15 U.S.C. 77h-1(g) (Securities Act For natural person......... $8,156 1.01636 $8,289 Sec. 8A(g)). For any other person....... 81,559 1.01636 82,893 For any other person/fraud. 407,794 1.01636 414,466 For natural person/fraud/ 163,118 1.01636 165,787 substantial losses or risk of losses to others or gains to self. For any other person/fraud/ 788,401 1.01636 801,299 substantial losses or risk of losses to others or gain to self. 15 U.S.C. 77t(d) (Securities Act For natural person......... 8,908 1.01636 9,054 Sec. 20(d)). For any other person....... 89,078 1.01636 90,535 For natural person/fraud... 89,078 1.01636 90,535 For any other person/fraud. 445,390 1.01636 452,677 [[Page 5369]] For natural person/fraud/ 178,156 1.01636 181,071 substantial losses or risk of losses to others. For any other person/fraud/ 890,780 1.01636 905,353 substantial losses or risk of losses to others. 15 U.S.C. 78u(d)(3) (Exchange Act For natural person......... 8,908 1.01636 9,054 Sec. 21(d)(3)). For any other person....... 89,078 1.01636 90,535 For natural person/fraud... 89,078 1.01636 90,535 For any other person/fraud. 445,390 1.01636 452,677 For natural person/fraud/ 178,156 1.01636 181,071 substantial losses or risk of losses to others or gains to self. For any other person/fraud/ 890,780 1.01636 905,353 substantial losses or risk of losses to others or gain to self. 15 U.S.C. 78u-1(a)(3) (Exchange Act Insider Trading-- 1,978,690 1.01636 2,011,061 Sec. 21A(a)(3)). controlling person. 15 U.S.C. 78u-2 (Exchange Act Sec. For natural person......... 8,908 1.01636 9,054 21B). For any other person....... 89,078 1.01636 90,535 For natural person/fraud... 89,078 1.01636 90,535 For any other person/fraud. 445,390 1.01636 452,677 For natural person/fraud/ 178,156 1.01636 181,071 substantial losses or risk of losses to others. For any other person/fraud/ 890,780 1.01636 905,353 substantial losses or risk of losses to others. 15 U.S.C. 78ff(b) (Exchange Act Exchange Act/failure to 525 1.01636 534 Sec. 32(b)). file information documents, reports. 15 U.S.C. 78ff(c)(1)(B) (Exchange Foreign Corrupt Practices-- 19,787 1.01636 20,111 Act Sec. 32(c)(1)(B)). any issuer. 15 U.S.C. 78ff(c)(2)(B) (Exchange Foreign Corrupt Practices-- 19,787 1.01636 20,111 Act Sec. 32(c)(2)(B)). any agent or stockholder acting on behalf of issuer. 15 U.S.C. 80a-9(d) (Investment For natural person......... 8,908 1.01636 9,054 Company Act Sec. 9(d)). For any other person....... 89,078 1.01636 90,535 For natural person/fraud... 89,078 1.01636 90,535 For any other person/fraud. 445,390 1.01636 452,677 For natural person/fraud/ 178,156 1.01636 181,071 substantial losses or risk of losses to others or gains to self. For any other person/fraud/ 890,780 1.01636 905,353 substantial losses or risk of losses to others or gain to self. 15 U.S.C. 80a-41(e) (Investment For natural person......... 8,908 1.01636 9,054 Company Act Sec. 42(e)). For any other person....... 89,078 1.01636 90,535 For natural person/fraud... 89,078 1.01636 90,535 For any other person/fraud. 445,390 1.01636 452,677 For natural person/fraud/ 178,156 1.01636 181,071 substantial losses or risk of losses to others. For any other person/fraud/ 890,780 1.01636 905,353 substantial losses or risk of losses to others. 15 U.S.C. 80b-3(i) (Investment For natural person......... 8,908 1.01636 9,054 Advisers Act Sec. 203(i)). For any other person....... 89,078 1.01636 90,535 For natural person/fraud... 89,078 1.01636 90,535 For any other person/fraud. 445,390 1.01636 452,677 For natural person/fraud/ 178,156 1.01636 181,071 substantial losses or risk of losses to others or gains to self. For any other person/fraud/ 890,780 1.01636 905,353 substantial losses or risk of losses to others or gain to self. 15 U.S.C. 80b-9(e) (Investment For natural person......... 8,908 1.01636 9,054 Advisers Act Sec. 209(e)). For any other person....... 89,078 1.01636 90,535 For natural person/fraud... 89,078 1.01636 90,535 For any other person/fraud. 445,390 1.01636 452,677 For natural person/fraud/ 178,156 1.01636 181,071 substantial losses or risk of losses to others. For any other person/fraud/ 890,780 1.01636 905,353 substantial losses or risk of losses to others. 15 U.S.C. 7215(c)(4)(D)(i) For natural person......... 131,185 1.01636 133,331 (Sarbanes-Oxley Act Sec. For any other person....... 2,623,700 1.01636 2,666,624 105(c)(4)(D)(i)). 15 U.S.C. 7215(c)(4)(D)(ii) For natural person......... 983,888 1.01636 999,984 (Sarbanes-Oxley Act Sec. For any other person....... 19,677,750 1.01636 19,999,678 105(c)(4)(D)(ii)). ---------------------------------------------------------------------------------------------------------------- Pursuant to the 2015 Act, the Commission has determined that the adjusted penalty amounts in this final rule (and all penalty adjustments performed pursuant to the 2015 Act) will apply to penalties imposed after the effective date of the adjustment for violations that occurred after November 2, 2015, the 2015 Act's enactment date. [[Page 5370]] Consistent with this determination, the Commission is reinstating the penalty amounts contained in its prior penalty adjustments under the DCIA for violations that occurred from December 10, 1996, through November 2, 2015.\16\ --------------------------------------------------------------------------- \16\ One commenter to the June 2016 interim final rule requested that the Commission re-evaluate the application of the adjusted penalty amounts included in that interim final rule to violations that occurred before the enactment of the 2015 Act (see Ltr. from Wilmer Cutler Pickering Hale and Dorr LLP, Aug. 15, 2016). Our determination to apply the penalty amounts in this final rule to violations that occurred after November 2, 2015, renders the commenter's request moot. As explained below, the penalty amounts in this final rule supersede the penalty amounts in the June 2016 interim final rule. --------------------------------------------------------------------------- The Commission's prior penalty adjustments under the DCIA were previously included in the Code of Federal Regulations at 17 CFR 201.1001through 1005 and Tables I through V to Subpart E. In the June 2016 interim final rule, Section 201.1001 and Table I were replaced with the new penalty amounts from the interim final rule, and Sections 201.1002 through 201.1005 and Tables II to V were removed. As part of this final rule, the information in these tables will be added back into the Code of Federal Regulations. However, for ease of reference, the information in these tables will be consolidated and included in a single section (17 CFR 201.1001(a)) and Table (Table I to Section 201.1001). Further, each penalty adjustment performed pursuant to the 2015 Act supersedes the prior adjustments under that Act. Thus, the penalty amounts in this final rule supersede the amounts in the June 2016 interim final rule (except that for the first day this final rule is effective, the prior year's penalty amounts shall apply, see 28 U.S.C. 2461 note Sec. 6). Because of this, the amounts in the June 2016 interim final rule will be removed from the Code of Federal Regulations. The penalty amounts in this final rule, however, need only be published in the Federal Register and will not be added to the Code of Federal Regulations, in accordance with the 2015 Act and OMB guidance.\17\ As a result, the Commission is amending 17 CFR 201.1001 to add subsection (b) to indicate that all penalty adjustments performed under the 2015 Act will be published in the Federal Register and will be made available on the Commission's Web site.\18\ This framework will avoid the necessity of revising the Code of Federal Regulations every year to include the new inflation-adjusted penalty amounts. Section 201.1001(b) will also clarify that penalty adjustments performed pursuant to the 2015 Act will only apply to violations that occurred after November 2, 2015, the enactment date of the 2015 Act. --------------------------------------------------------------------------- \17\ 28 U.S.C. 2461 note Sec. 4(a)(2); 2017 OMB Guidance at 3. \18\ The Web site will also list the penalty amounts for violations that occurred on or before November 2, 2015. --------------------------------------------------------------------------- III. Procedural and Other Matters The Commission is required by the 2015 Act to adjust the CMPs within its jurisdiction for inflation using a statutorily prescribed formula and the 2015 Act mandates that agencies perform this adjustment annually by January 15th of each year.\19\ The 2015 Act further provides that these annual adjustments shall be made ``notwithstanding section 553 of title 5, United States Code.'' \20\ In light of this Congressional mandate, the Commission is not required to provide for public notice and comment pursuant to the notice and comment provisions of the Administrative Procedure Act.\21\ Under the Regulatory Flexibility Act, a regulatory flexibility analysis is required only when an agency must publish a general notice of proposed rulemaking.\22\ Because public notice and comment is not required for this final rule, a regulatory flexibility analysis is not required. Further, this rule does not contain any collection of information requirements as defined by the Paperwork Reduction Act of 1995 as amended.\23\ --------------------------------------------------------------------------- \19\ 28 U.S.C. 2461 note Sec. 4(a). \20\ 28 U.S.C. 2461 note Sec. 4(b)(2). \21\ 5 U.S.C. 553(b)(3)(B). This finding also satisfies the requirements of 5 U.S.C. 808(2), allowing the amendment to become effective notwithstanding the requirement of 5 U.S.C. 801 (if a federal agency finds that notice and public comment are impractical, unnecessary or contrary to the public interest, a rule shall take effect at such time as the federal agency promulgating the rule determines). \22\ 5 U.S.C. 603. \23\ 44 U.S.C. 3501 et. seq. --------------------------------------------------------------------------- IV. Economic Analysis \24\ --------------------------------------------------------------------------- \24\ The Commission did not receive any comments on the economic analysis in the June 2016 interim final rule. --------------------------------------------------------------------------- The Commission is sensitive to the costs and benefits that result from its rules. This regulation merely adjusts CMPs for inflation as required by the 2015 Act. It has no impact on disclosure or compliance costs. The Commission further notes that the CMPs ordered in SEC proceedings and PCAOB disciplinary proceedings in fiscal year 2016 totaled approximately $1.28 billion. The inflationary adjustment required by the 2015 Act results in the increase of the maximum amount of the CMPs administered by the Commission of 1.636%. Assuming that the Commission is successful in obtaining civil monetary penalties in fiscal year 2017 in similar proportion to that obtained in fiscal year 2016, the inflationary adjustment pursuant to this final rule would result in an increase in the CMPs ordered of approximately $21 million. This potential increase, however, overstates the effect of the rule. First, this figure represents the amount of penalties that could be potentially ordered, whereas the amount of penalties collected in any given year--the amount of penalties that would affect the economy-- can be lower than the ordered amount. Second, the adjusted penalty amounts will not apply to all penalties ordered, but rather only to those penalties whose associated violations occurred after November 2, 2015. Third, penalties imposed in insider trading cases brought in district court are based on the profit gained or loss avoided as a result of the violation rather than by reference to a statutory dollar amount that is affected by this regulation.\25\ The average annual amount of penalties obtained in insider trading cases from FY 2010 through FY 2016 is $95.7 million. Third, in many cases where the Commission has obtained large civil monetary penalties, such penalties were calculated on the basis of the defendant's gross pecuniary gain rather than the maximum penalty dollar amount set by statute that will be adjusted by the proposed rule.\26\ In addition, the intent of the new regulation is merely to keep pace with changes in the economy, not to impose new costs. Therefore, for the instances in which CMPs affected by this rulemaking are imposed, the Commission does not believe that adjusting civil monetary penalties pursuant to the 2015 Act will significantly affect the amount of penalties it obtains beyond that necessary to keep pace with inflation. --------------------------------------------------------------------------- \25\ 15 U.S.C. 78u-1(a)(2). \26\ For example, 15 U.S.C. 77t(d)(2)(A), after adjusting for inflation as required by the 2015 Act, provides that the amount of the penalty shall not exceed the greater of $9,054 for a natural person or $90,535 for any other person, or the gross amount of pecuniary gain to such defendant as a result of the violation. --------------------------------------------------------------------------- The benefit provided by the inflationary adjustment to the maximum CMPs is that of maintaining the level of deterrence effectuated by the CMPs, and not allowing such deterrent effect to be diminished by inflation. The costs of implementing this rule should be negligible because the only change from the current, baseline situation is determining potential penalties using a new maximum dollar amount. [[Page 5371]] V. Statutory Basis The Commission is adopting these revisions to 17 CFR part 201, subpart E pursuant to the directives and authority of the Federal Civil Penalties Inflation Adjustment Act of 1990, Public Law 101-410, 104 Stat. 890-892 (1990), codified at 28 U.S.C. 2461 note, as amended. List of Subjects in 17 CFR Part 201 Administrative practice and procedure, Claims, Confidential business information, Lawyers, Penalties, Securities. Text of Amendment For the reasons set forth in the preamble, part 201, title 17, chapter II of the Code of Federal Regulations is amended as follows: PART 201--RULES OF PRACTICE Subpart E--Adjustment of Civil Monetary Penalties 0 1. The authority citation for Part 201, Subpart E continues to read as follows: Authority: 28 U.S.C. 2461 note. 0 2. Revise 201.1001 to read as follows: Sec. 201.1001 Adjustment of civil monetary penalties. (a) For violations from December 10, 1996, through November 2, 2015: As required by the Inflation Adjustment Act of 1990, as amended by the Debt Collection Improvement Act of 1996, the Commission has adjusted the maximum amounts of all civil monetary penalties it administers under the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Company Act of 1940, the Investment Advisers Act of 1940, and certain penalties under the Sarbanes-Oxley Act of 2002 for inflation in the releases and prior regulations listed in the footnotes to Table I. The penalty amounts provided in Table I apply to violations of these statutes that occurred from December 10, 1996, through November 2, 2015, with each column listing the penalty amounts for violations that occurred in a particular time frame. To determine the penalty amounts for violations that occurred prior to December 10, 1996, please refer to the applicable statutory text. To determine penalty amounts for violations after November 2, 2015, please refer to paragraph (b) of this section. (b) For violations after November 2, 2015: The Federal Civil Penalties Inflation Adjustment Act, as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (28 U.S.C. 2461 note), requires that civil monetary penalties be adjusted on an annual basis for inflation. Pursuant to this requirement, the maximum amounts of all civil monetary penalties under the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Company Act of 1940, and the Investment Advisers Act of 1940, and certain penalties under the Sarbanes-Oxley Act of 2002 will be adjusted annually for inflation. Notice of these adjusted penalty amounts will be published by the Commission in the Federal Register on or before January 15 of each calendar year and will be available, along with the Commission's prior inflation adjustments, on the Commission's Web site at https://www.sec.gov/enforce/civil-penalties-inflation-adjustments.htm. The adjusted penalty amounts will apply to all penalties imposed after the effective date of the adjustment (for the first day the adjustment is effective, the prior year's penalty amounts shall apply), for violations that occurred after November 2, 2015. The adjusted penalty amount each year will be the larger of: (1) The maximum penalty amount for the previous calendar year; or (2) An amount adjusted for inflation, calculated by multiplying the maximum penalty amount for the previous calendar year by the percentage by which the Consumer Price Index for all Urban Consumers (CPI-U) for the month of October preceding the current calendar year exceeds the CPI-U for the month of October of the calendar year two years prior to the current calendar year, adding that amount to the amount for the previous calendar year, and rounding the total to the nearest dollar. Table I to 201.1001--Civil Monetary Penalty Inflation Adjustments for Violations From December 10, 1996, Through November 2, 2015 -------------------------------------------------------------------------------------------------------------------------------------------------------- Date of violation and corresponding penalty ----------------------------------------------------------------------------------------- U.S. Code citation Civil monetary penalty Feb. 3, 2001- Feb. 15, 2005- Mar. 4, 2009- description Dec. 10, 1996- Feb. 14, 2005 Mar. 3, 2009 Mar. 5, 2013 Mar. 6, 2013- Feb. 2, 2001 \i\ \ii\ \iii\ \iv\ Nov. 2, 2015 \v\ -------------------------------------------------------------------------------------------------------------------------------------------------------- 15 U.S.C. 77h-1(g) (Securities Act For natural person..... N/A N/A N/A \vi\ $7,500 $7,500 Sec. 8A(g)). For any other person... N/A N/A N/A \vi\ 75,000 80,000 For natural person/ N/A N/A N/A \vi\ 75,000 80,000 fraud. For any other person/ N/A N/A N/A \vi\ 375,000 400,000 fraud. For natural person/ N/A N/A N/A \vi\ 150,000 160,000 fraud/substantial losses or risk of losses to others or gains to self. For any other person/ N/A N/A N/A \vi\ 725,000 775,000 fraud/substantial losses or risk of losses to others or gain to self. 15 U.S.C. 77t(d) (Securities Act Sec. For natural person..... $5,500 $6,500 $6,500 7,500 7,500 20(d)). For any other person... 55,000 60,000 65,000 75,000 80,000 For natural person/ 55,000 60,000 65,000 75,000 80,000 fraud. For any other person/ 275,000 300,000 325,000 375,000 400,000 fraud. For natural person/ 110,000 120,000 130,000 150,000 160,000 fraud/substantial losses or risk of losses to others. For any other person/ 550,000 600,000 650,000 725,000 775,000 fraud/substantial losses or risk of losses to others. 15 U.S.C. 78u(d)(3) (Exchange Act For natural person..... 5,500 6,500 6,500 7,500 7,500 Sec. 21(d)(3)). For any other person... 55,000 60,000 65,000 75,000 80,000 For natural person/ 55,000 60,000 65,000 75,000 80,000 fraud. For any other person/ 275,000 300,000 325,000 375,000 400,000 fraud. [[Page 5372]] For natural person/ 110,000 120,000 130,000 150,000 160,000 fraud/substantial losses or risk of losses to others or gains to self. For any other person/ 550,000 600,000 650,000 725,000 775,000 fraud/substantial losses or risk of losses to others or gain to self. 15 U.S.C. 78u-1(a)(3) (Exchange Act Insider Trading-- 1,100,000 1,200,000 1,275,000 1,425,000 1,525,000 Sec. 21A(a)(3)). controlling person. 15 U.S.C. 78u-2 (Exchange Act Sec. For natural person..... 5,500 6,500 6,500 7,500 7,500 21B). For any other person... 55,000 60,000 65,000 75,000 80,000 For natural person/ 55,000 60,000 65,000 75,000 80,000 fraud. For any other person/ 275,000 300,000 325,000 375,000 400,000 fraud. For natural person/ 110,000 120,000 130,000 150,000 160,000 fraud/substantial losses or risk of losses to others. For any other person/ 550,000 600,000 650,000 725,000 775,000 fraud/substantial losses or risk of losses to others. 15 U.S.C. 78ff(b) (Exchange Act Sec. Exchange Act/failure to 110 110 110 110 210 32(b)). file information documents, reports. 15 U.S.C. 78ff(c)(1)(B) (Exchange Act Foreign Corrupt 11,000 11,000 11,000 16,000 16,000 Sec. 32(c)(1)(B)). Practices--any issuer. 15 U.S.C. 78ff(c)(2)(B) (Exchange Act Foreign Corrupt 11,000 11,000 11,000 16,000 16,000 Sec. 32(c)(2)(B)). Practices--any agent or stockholder acting on behalf of issuer. 15 U.S.C. 80a-9(d) (Investment For natural person..... 5,500 6,500 6,500 7,500 7,500 Company Act Sec. 9(d)). For any other person... 55,000 60,000 65,000 75,000 80,000 For natural person/ 55,000 60,000 65,000 75,000 80,000 fraud. For any other person/ 275,000 300,000 325,000 375,000 400,000 fraud. For natural person/ 110,000 120,000 130,000 150,000 160,000 fraud/substantial losses or risk of losses to others or gains to self. For any other person/ 550,000 600,000 650,000 725,000 775,000 fraud/substantial losses or risk of losses to others or gain to self. 15 U.S.C. 80a-41(e) (Investment For natural person..... 5,500 6,500 6,500 7,500 7,500 Company Act Sec. 42(e)). For any other person... 55,000 60,000 65,000 75,000 80,000 For natural person/ 55,000 60,000 65,000 75,000 80,000 fraud. For any other person/ 275,000 300,000 325,000 375,000 400,000 fraud. For natural person/ 110,000 120,000 130,000 150,000 160,000 fraud/substantial losses or risk of losses to others. For any other person/ 550,000 600,000 650,000 725,000 775,000 fraud/substantial losses or risk of losses to others. 15 U.S.C. 80b-3(i) (Investment For natural person..... 5,500 6,500 6,500 7,500 7,500 Advisers Act Sec. 203(i)). For any other person... 55,000 60,000 65,000 75,000 80,000 For natural person/ 55,000 60,000 65,000 75,000 80,000 fraud. For any other person/ 275,000 300,000 325,000 375,000 400,000 fraud. For natural person/ 110,000 120,000 130,000 150,000 160,000 fraud/substantial losses or risk of losses to others or gains to self. For any other person/ 550,000 600,000 650,000 725,000 775,000 fraud/substantial losses or risk of losses to others or gain to self. 15 U.S.C. 80b-9(e) (Investment For natural person..... 5,500 6,500 6,500 7,500 7,500 Advisers Act Sec. 209(e)). For any other person... 55,000 60,000 65,000 75,000 80,000 For natural person/ 55,000 60,000 65,000 75,000 80,000 fraud. For any other person/ 275,000 300,000 325,000 375,000 400,000 fraud. For natural person/ 110,000 120,000 130,000 150,000 160,000 fraud/substantial losses or risk of losses to others. For any other person/ 550,000 600,000 650,000 725,000 775,000 fraud/substantial losses or risk of losses to others. 15 U.S.C. 7215(c)(4)(D)(i) (Sarbanes- For natural person..... N/A \vii\ 100,000 110,000 120,000 130,000 Oxley Act Sec. 105(c)(4)(D)(i)). For any other person... N/A \vii\ 2,000,000 2,100,000 2,375,000 2,525,000 [[Page 5373]] 15 U.S.C. 7215(c)(4)(D)(ii) (Sarbanes- For natural person..... N/A \vii\ 750,000 800,000 900,000 950,000 Oxley Act Sec. 105(c)(4)(D)(ii)). For any other person... N/A \vii\ 15,000,000 15,825,000 17,800,000 18,925,000 -------------------------------------------------------------------------------------------------------------------------------------------------------- \i\ Release Nos. 33-7361, 34-37912, IA-1596, IC-22310, dated November 1, 1996 (effective December 9, 1996), previously found at 17 CFR 201.1001 and Table I to Subpart E of Part 201. \ii\ Release Nos. 33-7946, 34-43897, IA-1921, IC-24846, dated January 31, 2001 (effective February 2, 2001), previously found at 17 CFR 201.1002 and Table II to Subpart E of Part 201. \iii\ Release Nos. 33-8530, 34-51136, IA-2348, IC-26748, dated February 9, 2005 (effective February 14, 2005), previously found at 17 CFR 201.1003 and Table III to Subpart E of Part 201. \iv\ Release Nos. 33-9009, 34-59449, IA-2845, IC-28635, dated February 25, 2009 (effective March 3, 2009), previously found at 17 CFR 201.1004 and Table IV to Subpart E of Part 201. \v\ Release Nos. 33-9387, 34-68994, IA-3557, IC-30408, dated February 27, 2013 (effective March 5, 2013), previously found at 17 CFR 201.1005 and Table V to Subpart E of Part 201. \vi\ Effective from July 21, 2010 (enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. 111-203), through March 5, 2013. \vii\ Effective from July 30, 2002 (enactment of the Sarbanes-Oxley Act of 2002, Pub. L. 107-204), through February 14, 2005. By the Commission. January 6, 2017. Brent J. Fields, Secretary. [FR Doc. 2017-00421 Filed 1-13-17; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 82, No. 11 / Wednesday, January 18, 2017 / Rules and Regulations 5367
fuselage stringer STR37 between fuselage http://www.regulations.gov by searching for monetary penalties that can be imposed
station (STA) STA6805 and STA7305, in and locating Docket No. FAA–2016–9058. under the statutes administered by the
accordance with the Accomplishment agency. Pursuant to this requirement,
Instructions of Fokker Service Bulletin (k) Material Incorporated by Reference
SBF100–53–130, dated December 1, 2015. (1) The Director of the Federal Register this final rule performs the first annual
(1) For airplanes having 45,000 or more approved the incorporation by reference adjustment for inflation of the
total flight cycles as of the effective date of (IBR) of the service information listed in this maximum amount of civil monetary
this AD, since the date of issuance of the paragraph under 5 U.S.C. 552(a) and 1 CFR penalties administered by the
original airworthiness certificate or the date part 51. Commission under the Securities Act of
of issuance of the original export certificate (2) You must use this service information 1933, the Securities Exchange Act of
of airworthiness: Do the high and low as applicable to do the actions required by 1934, the Investment Company Act of
frequency eddy current inspections within this AD, unless this AD specifies otherwise. 1940, the Investment Advisers Act of
750 flight cycles after the effective date of (i) Fokker Service Bulletin SBF100–53–
this AD.
1940, and certain penalties under the
130, dated December 1, 2015.
(2) For airplanes having 40,000 or more (ii) Reserved. Sarbanes-Oxley Act of 2002. This
total flight cycles, but less than 45,000 total (3) For service information identified in adjustment will apply to all penalties
flight cycles as of the effective date of this this AD, contact Fokker Services B.V., imposed after the effective date of this
AD, since the date of issuance of the original Technical Services Dept., P.O. Box 1357, final rule for violations after November
airworthiness certificate or the date of 2130 EL Hoofddorp, the Netherlands; 2, 2015. For violations that occurred on
issuance of the original export certificate of telephone: +31 (0)88–6280–350; fax: +31 or before November 2, 2015, the
airworthiness: Do the high and low frequency (0)88–6280–111; email: technicalservices@ Commission is reinstating the penalty
eddy current inspections within 1,500 flight fokker.com; Internet http://
cycles after the effective date of this AD.
amounts in the Commission’s prior
www.myfokkerfleet.com.
penalty adjustments performed under
(h) Corrective Action (4) You may view this service information
at the FAA, Transport Airplane Directorate, the DCIA.
If any crack is found during any inspection 1601 Lind Avenue SW., Renton, WA. For DATES: Effective Date: January 18, 2017.
required by paragraph (g) of this AD: Before information on the availability of this FOR FURTHER INFORMATION CONTACT:
further flight, repair using a method material at the FAA, call 425–227–1221.
approved by the Manager, International
James A. Cappoli, Assistant General
(5) You may view this service information Counsel, Office of the General Counsel,
Branch, ANM 116, Transport Airplane that is incorporated by reference at the
Directorate, FAA; or the European Aviation at (202) 551–7923, or Stephen M. Ng,
National Archives and Records
Safety Agency (EASA); or Fokker B.V. Administration (NARA). For information on
Senior Counsel, Office of the General
Service’s EASA Design Organization the availability of this material at NARA, call Counsel, at (202) 551–7957.
Approval (DOA). 202–741–6030, or go to: http:// SUPPLEMENTARY INFORMATION:
(i) Other FAA AD Provisions www.archives.gov/federal-register/cfr/ibr-
locations.html.
I. Background
The following provisions also apply to this
AD: Issued in Renton, Washington, on This final rule implements the 2015
(1) Alternative Methods of Compliance December 27, 2016. Act,1 which amended the Inflation
(AMOCs): The Manager, International Jeffrey E. Duven, Adjustment Act.2 The Inflation
Branch, ANM–116, Transport Airplane Adjustment Act previously had been
Manager, Transport Airplane Directorate,
Directorate, FAA, has the authority to
Aircraft Certification Service. amended by the DCIA 3 to require that
approve AMOCs for this AD, if requested each federal agency adopt regulations at
using the procedures found in 14 CFR 39.19. [FR Doc. 2017–00410 Filed 1–17–17; 8:45 am]
least once every four years that adjust
In accordance with 14 CFR 39.19, send your BILLING CODE 4910–13–P
for inflation the civil monetary penalties
request to your principal inspector or local
Flight Standards District Office, as (‘‘CMPs’’) that could be imposed under
appropriate. If sending information directly the statutes administered by the agency.
SECURITIES AND EXCHANGE Pursuant to the requirements of the
to the International Branch, send it to ATTN:
Tom Rodriguez, Aerospace Engineer, COMMISSION DCIA, the Commission previously
International Branch, ANM–116, Transport adopted regulations in 1996, 2001, 2005,
Airplane Directorate, FAA, 1601 Lind 17 CFR Part 201
2009, and 2013 to adjust the maximum
Avenue SW., Renton, WA 98057–3356; [Release Nos. 33–10276; 34–79749; IA– amount of the CMPs that could be
telephone 425–227–1137; fax 425–227–1149. 4599; IC–32414] imposed under the statutes the
Information may be emailed to: 9–ANM–116–
AMOC–REQUESTS@faa.gov. Before using Commission administers.4
Adjustments to Civil Monetary Penalty
any approved AMOC, notify your appropriate Amounts 1 Public Law 114–74 Sec. 701, 129 Stat. 599–601
principal inspector, or lacking a principal
(Nov. 2, 2015), codified at 28 U.S.C. 2461 note.
inspector, the manager of the local flight AGENCY: Securities and Exchange 2 Public Law 101–410, 104 Stat. 890–892 (1990),
standards district office/certificate holding Commission. codified at 28 U.S.C. 2461 note.
district office.
ACTION: Final rule. 3 Public Law 104–134, Title III, § 31001(s)(1), 110
(2) Contacting the Manufacturer: For any Stat. 1321–373 (1996), codified at 28 U.S.C. 2461
requirement in this AD to obtain corrective SUMMARY: The Securities and Exchange note.
actions from a manufacturer, the action must 4 See Release Nos. 33–7361, 34–37912, IA–1596,
be accomplished using a method approved Commission (the ‘‘Commission’’) is
IC–22310, dated November 1, 1996 (effective
by the Manager, International Branch, ANM– adopting a final rule to implement the December 9, 1996), previously found at 17 CFR
116, Transport Airplane Directorate, FAA; or Federal Civil Penalties Inflation 201.1001 and Table I to Subpart E of Part 201;
EASA; or Fokker Services B.V.’s EASA DOA. Adjustment Act Improvements Act of Release Nos. 33–7946, 34–43897, IA–1921, IC–
If approved by the DOA, the approval must 2015 (the ‘‘2015 Act’’), which amended 24846, dated January 31, 2001 (effective February
mstockstill on DSK3G9T082PROD with RULES
include the DOA-authorized signature. 2, 2001), previously found at 17 CFR 201.1002 and
the Federal Civil Penalties Inflation Table II to Subpart E of Part 201; Release Nos. 33–
(j) Related Information Adjustment Act of 1990 (the ‘‘Inflation 8530, 34–51136, IA–2348, IC–26748, dated
Refer to Mandatory Continuing
Adjustment Act’’), as previously February 9, 2005 (effective February 14, 2005),
amended by the Debt Collection previously found at 17 CFR 201.1003 and Table III
Airworthiness Information (MCAI) EASA AD to Subpart E of Part 201; Release Nos. 33–9009, 34–
2016–0029R1, dated November 17, 2016, for Improvement Act of 1996 (the ‘‘DCIA’’). 59449, IA–2845, IC–28635, dated February 25, 2009
related information. This MCAI may be The 2015 Act requires all agencies to (effective March 3, 2009), previously found at 17
found in the AD docket on the Internet at annually adjust for inflation the civil Continued
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![5368 Federal Register / Vol. 82, No. 11 / Wednesday, January 18, 2017 / Rules and Regulations
The 2015 Act replaces the inflation the Investment Advisers Act of 1940. In that the adjusted amounts were
adjustment mechanism prescribed in addition, the Sarbanes-Oxley Act of appropriate.12
the DCIA with a new mechanism for 2002 provides the Public Company Pursuant to the 2015 Act, the
calculating the inflation-adjusted Accounting Oversight Board (the Commission now adjusts the penalty
amount of CMPs. Each agency was first ‘‘PCAOB’’) authority to levy civil amounts in the June 2016 interim final
required to use this new mechanism to monetary penalties in its disciplinary rule by multiplying these amounts by
adjust the maximum amount of its proceedings pursuant to 15 U.S.C. the percentage change between the
CMPs 5 in an initial ‘‘catch-up’’ 7215(c)(4)(D).10 The definition of a CMP Consumer Price Index for all Urban
adjustment.6 Pursuant to this in the Inflation Adjustment Act Consumers (‘‘CPI–U’’) for October 2015,
requirement, the Commission issued an encompasses such civil monetary and the October 2016 CPI–U.13 OMB has
interim final rule adjusting its CMPs on penalties.11 provided its calculation of this
June 27, 2016 (the ‘‘June 2016 interim multiplier (the ‘‘CPI–U Multiplier’’) to
final rule’’).7 After performing the catch- II. Adjusting the Commission’s Penalty agencies.14 After multiplying the June
up adjustment, each agency must now Amounts for Inflation 2016 interim final rule amounts by this
perform annual adjustments for multiplier, the Commission must round
This final rule implements the first of
inflation, and publish these adjustments all penalty amounts to the nearest dollar
the required annual adjustments under
in the Federal Register by January 15 of to determine the new inflation-adjusted
the 2015 Act for all penalties under the
each calendar year.8 penalty amounts.
Securities Act, the Exchange Act, the
A CMP is defined in relevant part as For example, the CMP for certain
any penalty, fine, or other sanction that: Investment Company Act, and the insider trading violations by controlling
(1) Is for a specific amount, or has a Investment Advisers Act, and certain persons under Exchange Act Section
maximum amount, as provided by penalties under the Sarbanes-Oxley Act. 21A(a)(3) 15 was readjusted for inflation
federal law; and (2) is assessed or As the baseline in calculating these on August 1, 2016, to $1,978,690. To
enforced by an agency in an new penalty amounts, the Commission determine the new CMP under this
administrative proceeding or by a uses the penalty amounts in the provision, the Commission multiplies
federal court pursuant to federal law.9 Commission’s June 2016 interim final the current CMP by the CPI–U
This definition applies to the monetary rule. The penalty amounts in that Multiplier of 1.01636, and rounds to the
penalty provisions contained in four interim final rule used the new inflation nearest dollar. Thus, the new CMP for
statutes administered by the adjustment mechanism in the 2015 Act Exchange Act Section 21A(a)(3) is
Commission: The Securities Act of as part of the ‘‘catch-up adjustment’’ $2,011,061.
1933; the Securities Exchange Act of required by that Act. The Commission Below is the Commission’s
1934 (the ‘‘Exchange Act’’); the affirms that the amounts in the June calculation of the new penalty amounts
Investment Company Act of 1940; and 2016 interim final rule were correct and for the penalties it administers.
Penalty
amounts in New adjusted
CPI–U
U.S. code citation Civil monetary penalty description June 2016 penalty
multiplier
interim amounts
final rule
15 U.S.C. 77h–1(g) (Securities Act For natural person .................................................... $8,156 1.01636 $8,289
Sec. 8A(g)). For any other person ................................................ 81,559 1.01636 82,893
For any other person/fraud ....................................... 407,794 1.01636 414,466
For natural person/fraud/substantial losses or risk 163,118 1.01636 165,787
of losses to others or gains to self.
For any other person/fraud/substantial losses or 788,401 1.01636 801,299
risk of losses to others or gain to self.
15 U.S.C. 77t(d) (Securities Act Sec. For natural person .................................................... 8,908 1.01636 9,054
20(d)). For any other person ................................................ 89,078 1.01636 90,535
For natural person/fraud ........................................... 89,078 1.01636 90,535
For any other person/fraud ....................................... 445,390 1.01636 452,677
CFR 201.1004 and Table IV to Subpart E of Part 201; 9 28U.S.C. 2461 note Sec. 3(2). increase of the maximum amount of these CMPs
and Release Nos. 33–9387, 34–68994, IA–3557, IC– 10 15U.S.C. 7215(c)(4)(D). would outweigh the benefits. See 28 U.S.C. 2461
30408, dated February 27, 2013 (effective March 5, 11 The Commission may by order affirm, modify, note Sec. 4(c); 2016 OMB Guidance at 3. As part
2013), previously found at 17 CFR 201.1005 and remand, or set aside sanctions, including civil of the June 2016 interim final rule, the Commission
Table V to Subpart E of Part 201. monetary penalties, imposed by the PCAOB. See
5 The 2015 Act also applies to minimum penalty
determined that it was not necessary to seek a
Section 107(c) of the Sarbanes-Oxley Act of 2002, reduced catch-up adjustment determination, but
amounts and penalty ranges. See 28 U.S.C. 2461 15 U.S.C. 7217. The Commission may enforce such
note Sec. 5(a). All of the statutes administered by requested comments on whether the Commission
orders in federal district court pursuant to Section
the Commission, however, only include maximum should reconsider this decision. See Release No.
21(e) of the Securities Exchange Act of 1934. As a
penalty amounts. Thus, in this final rule, we only result, penalties assessed by the PCAOB in its 33–10104 at 8. The Commission did not receive any
refer to the effect of the 2015 Act on maximum disciplinary proceedings are penalties ‘‘enforced’’ comments on this topic and the Commission affirms
penalty amounts. by the Commission for purposes of the Inflation its decision not to seek a reduced catch-up
6 28 U.S.C. 2461 note Sec. 4(b)(1); Office of Adjustment Act. See Adjustments to Civil Monetary adjustment determination.
Management and Budget, Implementation of the Penalty Amounts, Release No. 33–8530 (Feb. 4, 13 28 U.S.C. 2461 note Sec. 5.
mstockstill on DSK3G9T082PROD with RULES
Federal Civil Penalties Inflation Adjustment Act 2005) [70 FR 7606 (Feb. 14, 2005)]. 14 Office of Management and Budget,
Improvements Act of 2015 (February 24, 2016) 12 The 2015 Act provided that agencies could seek
Implementation of the 2017 Annual Adjustment
(‘‘2016 OMB Guidance’’) at 1, available at https:// approval from OMB to reduce the amount of the
www.whitehouse.gov/sites/default/files/omb/ Pursuant to the Federal Civil Penalties Inflation
catch-up adjustment required by the 2015 Act (a
memoranda/2016/m-16-06.pdf. Adjustment Act Improvements Act of 2015 (Dec. 16,
‘‘reduced catch-up determination’’) if: (1) The
7 Release Nos. 33–10104; 34–78156; IA–4437; IC–
otherwise required increase of the maximum 2016) (‘‘2017 OMB Guidance’’) at 1, available at
32162 (June 27, 2016). amount of the CMPs administered by the agency https://www.whitehouse.gov/sites/default/files/
8 28 U.S.C. 2461 note Sec. 4; 2016 OMB Guidance would have a negative economic impact, or (2) the omb/memoranda/2017/m-17-11_0.pdf.
at 4. social costs of adopting the otherwise required 15 15 U.S.C. 78u–1(a)(3).
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TABLE I TO 201.1001—CIVIL MONETARY PENALTY INFLATION ADJUSTMENTS FOR VIOLATIONS FROM DECEMBER 10, 1996,
THROUGH NOVEMBER 2, 2015—Continued
Date of violation and corresponding penalty
Civil monetary penalty
U.S. Code citation description Dec. 10, 1996– Feb. 3, 2001– Feb. 15, 2005– Mar. 4, 2009– Mar. 6, 2013–
Feb. 2, 2001 i Feb. 14, 2005 ii Mar. 3, 2009 iii Mar. 5, 2013 iv Nov. 2, 2015 v
15 U.S.C. 7215(c)(4)(D)(ii) (Sar- For natural person ..................... N/A vii 750,000 800,000 900,000 950,000
banes-Oxley Act Sec. For any other person ................ N/A vii 15,000,000 15,825,000 17,800,000 18,925,000
105(c)(4)(D)(ii)).
i Release Nos. 33–7361, 34–37912, IA–1596, IC–22310, dated November 1, 1996 (effective December 9, 1996), previously found at 17 CFR 201.1001 and Table I
to Subpart E of Part 201.
ii Release Nos. 33–7946, 34–43897, IA–1921, IC–24846, dated January 31, 2001 (effective February 2, 2001), previously found at 17 CFR 201.1002 and Table II to
Subpart E of Part 201.
iii Release Nos. 33–8530, 34–51136, IA–2348, IC–26748, dated February 9, 2005 (effective February 14, 2005), previously found at 17 CFR 201.1003 and Table III
to Subpart E of Part 201.
iv Release Nos. 33–9009, 34–59449, IA–2845, IC–28635, dated February 25, 2009 (effective March 3, 2009), previously found at 17 CFR 201.1004 and Table IV to
Subpart E of Part 201.
v Release Nos. 33–9387, 34–68994, IA–3557, IC–30408, dated February 27, 2013 (effective March 5, 2013), previously found at 17 CFR 201.1005 and Table V to
Subpart E of Part 201.
vi Effective from July 21, 2010 (enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. 111–203), through March 5, 2013.
vii Effective from July 30, 2002 (enactment of the Sarbanes-Oxley Act of 2002, Pub. L. 107–204), through February 14, 2005.
By the Commission. Occupational Safety and Health calling (202) 693–5959 (this is not a toll-
January 6, 2017. Administration, Employee Benefits free number). TTY/TDD callers may dial
Brent J. Fields, Security Administration, and Mine toll-free 1–877–889–5627 to obtain
Secretary. Safety and Health Administration, information or request materials in
[FR Doc. 2017–00421 Filed 1–13–17; 8:45 am] Department of Labor. alternative formats.
BILLING CODE 8011–01–P ACTION: Final rule. SUPPLEMENTARY INFORMATION:
SUMMARY: The U.S. Department of Labor Preamble Table of Contents
(Department) is publishing this final I. Background
DEPARTMENT OF LABOR rule to adjust for inflation the civil II. Adjustment for 2017
monetary penalties assessed or enforced III. Discussion of Public Comments
Employment and Training IV. Paperwork Reduction Act
in its regulations, pursuant to the
Administration V. Administrative Procedure Act
Federal Civil Penalties Inflation VI. Executive Order 12866: Regulatory
Adjustment Act of 1990 as amended by Planning and Review, and Executive
20 CFR Part 655
the Federal Civil Penalties Inflation Order 13563: Improving Regulation and
Adjustment Act Improvements Act of Regulatory Review
Office of Workers’ Compensation
2015 (Inflation Adjustment Act). The VII. Regulatory Flexibility Act and Small
Programs Business Regulatory Enforcement
Inflation Adjustment Act requires the
Department to annually adjust its civil Fairness Act
20 CFR Parts 702, 725, and 726 VIII. Other Regulatory Considerations
money penalty levels for inflation no
A. The Unfunded Mandates Reform Act of
later than January 15 of each year. The 1995
Wage and Hour Division
Inflation Adjustment Act provides that B. Executive Order 13132: Federalism
agencies shall adjust civil monetary C. Executive Order 13175: Indian Tribal
29 CFR Parts 500, 501, 530, 570, 578,
penalties notwithstanding Section 553 Governments
579, 801, and 825
of the Administrative Procedure Act D. The Treasury and General Government
(APA). Additionally, the Inflation Appropriations Act of 1999: Assessment
Occupational Safety and Health of Federal Regulations and Policies on
Adjustment Act provides a cost-of-living
Administration Families
formula for adjustment of the civil
E. Executive Order 13045: Protection of
penalties. Accordingly, this final rule Children From Environmental Health
29 CFR Part 1903
sets forth the Department’s 2017 annual Risks and Safety Risks
adjustments for inflation to its civil F. Environmental Impact Assessment
Employee Benefits Security
monetary penalties, effective January 13, G. Executive Order 13211: Energy Supply
Administration
2017. H. Executive Order 12630: Constitutionally
DATES: This final rule is effective on
Protected Property Rights
29 CFR Part 2560, 2575, and 2590 I. Executive Order 12988: Civil Justice
January 13, 2017. As provided by the Reform Analysis
Mine Safety and Health Administration Inflation Adjustment Act, the increased
penalty levels apply to any penalties I. Background
30 CFR Part 100 assessed after the effective date of this On November 2, 2015, Congress
rule. enacted the Federal Civil Penalties
RIN 1290–AA31 FOR FURTHER INFORMATION CONTACT: Inflation Adjustment Act Improvements
Department of Labor Federal Civil Pamela Peters, Program Analyst, U.S. Act of 2015, Public Law 114–74, 701
mstockstill on DSK3G9T082PROD with RULES
Penalties Inflation Adjustment Act Department of Labor, Room S–2312, 200 (Inflation Adjustment Act), which
Annual Adjustments for 2017 Constitution Avenue, NW., Washington, further amended the Federal Civil
DC 20210; telephone: (202) 693–5959 Penalties Inflation Adjustment Act of
AGENCY: Employment and Training (this is not a toll-free number). Copies 1990 as previously amended by the
Administration, Office of Workers’ of this final rule may be obtained in 1996 Debt Collection Improvement Act
Compensation Programs, Office of the alternative formats (large print, Braille, (collectively, the ‘‘Prior Inflation
Secretary, Wage and Hour Division, audio tape or disc), upon request, by Adjustment Act’’), to improve the
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Document Created: 2018-02-01 15:19:09
Document Modified: 2018-02-01 15:19:09
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Rules and Regulations | |
| Action | Final rule. | |
| Dates | Effective Date: January 18, 2017. | |
| Contact | James A. Cappoli, Assistant General Counsel, Office of the General Counsel, at (202) 551-7923, or Stephen M. Ng, Senior Counsel, Office of the General Counsel, at (202) 551- 7957. | |
| FR Citation | 82 FR 5367 | |
| CFR Associated | Administrative Practice and Procedure; Claims; Confidential Business Information; Lawyers; Penalties and Securities |
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