Securities Fraud Fines Triple for Repeat Offenders, Max Penalties Hit $10 Million Under New Enforcement Bill

This new legislation, the Stronger Enforcement of Civil Penalties Act of 2025, is basically a massive upgrade to the federal government’s fine schedule for securities violations. The core of the bill is simple: if you break the rules governing stocks, investments, or financial advice, the financial penalties are going way up. For standard violations across the Securities Act of 1933, the Exchange Act of 1934, and the Investment Company and Investment Advisers Acts of 1940, the maximum penalties are increasing by 33% to 100% in many cases. But the real game-changer is the introduction of new, higher-level penalty tiers designed to hit bad actors where it hurts: their wallets.

The New ‘Third Tier’ Fine: Matching the Harm

For most people, the biggest takeaway is the creation of a new “Third Tier” penalty for the worst kinds of misconduct (SEC. 2). If a violation involves outright fraud, deceit, manipulation, or even just "reckless disregard" for the rules, and it causes substantial losses or financial gain, the penalty jumps significantly. Instead of a fixed maximum, the fine will be the highest of three options: up to $1 million for an individual ($10 million for a company), three times the gross financial gain made by the violator, or the total amount of losses suffered by the victims. Think of a financial adviser who recklessly puts clients into a terrible, high-fee investment just to collect a big commission. Under current rules, they might face a capped fine. Under this bill, the fine is now directly linked to the harm they caused—meaning victims have a much better chance of seeing meaningful compensation recovered through the penalty process.

Three Strikes and You’re Tripled

If the Third Tier is about hitting hard, Section 3 of this bill is about hitting repeat offenders even harder. This section introduces a massive penalty multiplier for recidivists—people who have previously been convicted of securities fraud or settled a fraud case with the SEC. If they commit another violation within five years of that prior judgment, the maximum penalty for the new offense is three times the amount that would normally apply. This creates a de facto "Fourth Tier" of punishment. If you’re a financial professional who has already been sanctioned for fraud, the next time you slip up, the financial consequences are going to be astronomical. This provision is a clear signal that the government is aiming to permanently remove repeat bad actors from the financial markets by making the cost of doing business illegally too high.

The Daily Count: Ignoring the Judge Gets Expensive

Finally, Section 4 addresses what happens when someone is told to stop doing something by a court or the SEC, and they just keep doing it. The bill clarifies that if someone violates an injunction, bar, or cease-and-desist order, every single day they remain in violation counts as a separate offense. This is a huge deal for anyone subject to an SEC order. Say a court bars a former broker from contacting clients, but they send out an email every day for a week. That’s seven separate violations, and the penalties will stack up seven times. For small firms or individuals who might struggle with compliance or who try to drag their feet on an administrative order, this provision means the financial meter will be running continuously, potentially racking up massive fines very quickly. While this is intended to ensure swift compliance, it puts immense pressure on regulated entities to comply immediately with any order, regardless of administrative difficulty, or face exponentially growing penalties.