NCJ Number
131406
Date Published
1987
Length
8 pages
Annotation
The Government Securities Act (GSA) of 1986 is summarized and applied to the sanctioning of registered brokers or dealers convicted of insider trading violations.
Abstract
Prior to the GSA of 1986 there were no provisions for the regulation of government securities dealers except for the antifraud provision of the Securities Exchange Act of 1934. The GSA of 1986 places several disclosure requirements on government securities dealers or brokers and financial institutions. It makes it unlawful for them to use mail or interstate commerce to affect any transaction in any government security unless they are registered with the Securities Exchange Commission (SEC) and have filed written notice with the appropriate regulatory agency. A sanctions provision requires the SEC to censure, limit activities, suspend, or revoke registration of those dealers who filed false or misleading information with the SEC, violated any of the four major securities acts, or were convicted within 10 years of any felony involving purchase or sale of securities. The sanctions provision in the GAS appears to expect the SEC to impose sanctions on dealers convicted of felony or misdemeanor related to trading of securities and seems to apply to violation of the insider trading laws by government securities brokers or dealers. Statutory provisions in Section 16, Section 10b, and rule 10b-5 of the 1934 act as well as in the Insider Trading Sanction Act of 1984, the Investment Company Act, and the Investment Advisers Act may be used in sanctioning registered brokers or dealers convicted of insider trading violations. 27 references