DEFINITION of 'Civil Money Penalty - CMP'

A civil money penalty is a punitive fine imposed by the Securities and Exchange Commission, which holds primary responsibility for enforcing Federal securities laws.

BREAKING DOWN 'Civil Money Penalty - CMP'

Civil money penalties are imposed by the Securities and Exchange Commission, and are not limited to securities-law violations. They are typically equal to the gains made from the activity, and the money from these fines goes back to investors who have been victims of securities law violations.

Currently, the maximum civil monetary penalties in SEC enforcement actions are $181,071 per violation for individuals and $905,353 per violation for entities. If a bill introduced by a bipartisan group of U.S. senators — the Stronger Enforcement of Civil Penalties Act of 2017 — becomes law, then these penalties could increase to $1 million per violation for individuals and $10 million per violation for corporate entities.

RELATED TERMS
  1. Penalty Bid

    A penalty bid is an offer to purchase securities by a lead underwriter ...
  2. Civil Authority Clause

    A Civil Authority Clause is an insurance clause outlining coverage ...
  3. Penalty Repricing

    An increase in a credit card’s interest rate that occurs when ...
  4. Underpayment Penalty

    A tax penalty enacted on an individual for not paying enough ...
  5. Inspectorial Powers

    Inspectorial powers refer to an entity's power to investigate ...
  6. Civil Commotion

    A civil commotion is public gathering of a large number of people ...
Related Articles
  1. Financial Advisor

    Series 66 Exam Prep: The Broker-Dealer

    Before you take the series 66, you need to understand civil liabilities.
  2. Investing

    Deutsche Bank Faces New Fines

    The bank has paid fines for laundering money for Russian criminals and for selling toxic assets that caused the global recession. Now illegal currency trades may be the latest source of pain.
  3. Insights

    UPS Fined $73,000 For Safety Violations (UPS)

    The delivery company was fined for workplace safety violations at the company’s Louisville airline hangar.
  4. Insurance

    Obamacare Penalty: What Actually Happens (& When)

    If you didn't have health insurance last year – or miss this year's deadline – how is the Affordable Care Act penalty enforced?
  5. Insights

    Understanding the SEC

    The SEC's triple mandate of investor protection, maintenance of orderly markets and facilitation of capital formation makes it a vital player in capital markets.
  6. Tech

    Wells Fargo Draws $185M Fine for Fake Accounts (WFC)

    Wells Fargo to pay $185 million federal penalty after its employees created fake accounts and debit cards on behalf of unsuspecting customers since 2011.
  7. Insights

    How The SEC Tracks Insider Trading

    We look at how the SEC tracks and tries to stop insider trading - a seemingly impossible task.
  8. Insights

    The SEC: A Brief History Of Regulation

    The SEC has continued to make the market a safer place and to learn from and adapt to new scandals and crises.
  9. Insights

    The 3 Biggest Penalties for Insider Trading in the U.S.

    The three large penalties for insider trading in the United States have been handed down in recent years, leading to civil and criminal charges for the culprits.
  10. Taxes

    What To Do If You Filed Your Taxes Late

    What happens if you missed this year's April 17 deadline?
RELATED FAQS
  1. What happens to the fines collected by the Securities and Exchange Commission?

    When the Securities and Exchange Commission (SEC) enforces a civil action against a corporation or an individual found guilty ... Read Answer >>
Hot Definitions
  1. Quick Ratio

    The quick ratio measures a company’s ability to meet its short-term obligations with its most liquid assets.
  2. Leverage

    Leverage results from using borrowed capital as a source of funding when investing to expand the firm's asset base and generate ...
  3. Financial Risk

    Financial risk is the possibility that shareholders will lose money when investing in a company if its cash flow fails to ...
  4. Enterprise Value (EV)

    Enterprise Value (EV) is a measure of a company's total value, often used as a more comprehensive alternative to equity market ...
  5. Relative Strength Index - RSI

    Relative Strength Indicator (RSI) is a technical momentum indicator that compares the magnitude of recent gains to recent ...
  6. Dividend

    A dividend is a distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.
Trading Center