Securities Lawyer's Deskbook
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Sarbanes-Oxley Act of 2002

Section 803 -- Debts Nondischargeable if Incurred in Violation of Securities Fraud Laws

Section 523(a) of title 11, United States Code, is amended--
  1. in paragraph (17), by striking "or" after the semicolon;

  2. in paragraph (18), by striking the period at the end and inserting "; or"; and

  3. by adding at the end, the following:

    "(19) that--
      "(A) is for--
        "(i) the violation of any of the Federal securities laws (as that term is defined in section 3(a)(47) of the Securities Exchange Act of 1934), any of the State securities laws, or any regulation or order issued under such Federal or State securities laws; or
        "(ii) common law fraud, deceit, or manipulation in connection with the purchase or sale of any security; and
      "(B) results from--
        "(i) any judgment, order, consent order, or decree entered in any Federal or State judicial or administrative proceeding;
        "(ii) any settlement agreement entered into by the debtor; or
        "(iii) any court or administrative order for any damages, fine, penalty, citation, restitutionary payment, disgorgement payment, attorney fee, cost, or other payment owed by the debtor.".

Legislative History

July 30, 2002, 107 P.L. 204, Title VIII, § 803, 116 Stat. 745.

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