[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4084 Introduced in House (IH)]







107th CONGRESS
  2d Session
                                H. R. 4084

   To amend the Securities Exchange Act of 1934 to prohibit certain 
employees and shareholders from obtaining special loans, and for other 
                               purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 9, 2002

  Ms. Rivers introduced the following bill; which was referred to the 
                    Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
   To amend the Securities Exchange Act of 1934 to prohibit certain 
employees and shareholders from obtaining special loans, and for other 
                               purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Corporate Asset Protection Act of 
2002''.

SEC. 2. PROHIBITION ON SPECIAL EMPLOYEE OR SHAREHOLDER LOANS BY 
              PUBLICLY TRADED COMPANIES.

    (a) In General.--The Securities Exchange Act of 1934 (15 U.S.C. 78a 
et seq.) is amended by inserting after section 21E the following new 
section:

``SEC. 21F. PROHIBITION ON INSIDER LOANS.

    ``(a) Offering or Providing Loans.--A reporting issuer may not 
offer or provide a loan to an insider and no insider may accept such a 
loan, unless the issuer is a financial institution and the loan is not 
substantially more advantageous for the insider than for an individual 
who is not an insider.
    ``(b) Civil Penalty.--The following persons shall each be liable to 
the United States for a civil penalty, not to exceed the greater of 
three times the amount of the loan that violates this section or 
$100,000, imposed in an action brought by the Commission:
            ``(1) A reporting issuer that offers or provides a loan in 
        violation of subsection (a).
            ``(2) An official who has exercised decisionmaking 
        authority on behalf of a reporting issuer with respect to a 
        loan that violates subsection (a).
            ``(3) An insider who obtains a loan in knowing violation of 
        subsection (a).
    ``(c) Definitions.--In this section:
            ``(1) The term `reporting issuer' means any registrant 
        under section 12 or any other issuer required to file periodic 
        reports under section 13 or 15, or an affiliate (including a 
        wholly owned subsidiary) of such registrant or issuer.
            ``(2) The term `insider' means an individual who is an 
        employee, officer, board member, shareholder, consultant, or 
        independent contractor of a reporting issuer, or any entity in 
        which such an individual has an ownership interest greater than 
        1 percent (in accordance with regulations of the Commission to 
        determine such ownership interest).
            ``(3) The term `financial institution' has the meaning 
        given that term in section 509 of the Gramm-Leach-Bliley Act 
        (15 U.S.C. 6809).
    ``(d) Rulemaking.--The Commission may prescribe regulations to 
carry out this section.''.
    (b) Conforming Amendment.--Section 32(a) of such Act (15 U.S.C. 
78ff(a)) is amended by inserting ``or section 21F'' after ``other than 
section 30A''.
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