---
kind: "section"
citation: "15 U.S.C. § 689n"
title: "15"
title_heading: "Commerce and Trade"
number: "689n"
heading: "Unlawful acts and omissions; breach of fiduciary duty"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/15/689n"
units:
  - "Chapter 14B — Small Business Investment Program"
  - "Subchapter III — Investment Division Programs"
  - "Part B — New Markets Venture Capital Program"
---

# §689n. Unlawful acts and omissions; breach of fiduciary duty

- (a) **Parties deemed to commit a violation—** Whenever any [New Markets Venture Capital company](/usc/15/689.md?p=4) violates any provision of this chapter, of a regulation issued under this chapter, or of a [participation agreement](/usc/15/689.md?p=6) entered into under this chapter, by reason of its failure to comply with its terms or by reason of its engaging in any act or practice that constitutes or will constitute a violation thereof, such violation shall also be deemed to be a violation and an unlawful act committed by any [person](/usc/15/7a.md?p=6) who, directly or indirectly, authorizes, orders, participates in, causes, brings about, counsels, aids, or abets in the commission of any acts, practices, or transactions that constitute or will constitute, in whole or in part, such violation.
- (b) **Fiduciary duties—** It shall be unlawful for any officer, director, employee, agent, or other participant in the management or conduct of the affairs of a [New Markets Venture Capital company](/usc/15/689.md?p=4) to engage in any act or practice, or to omit any act or practice, in breach of the [person](/usc/15/7a.md?p=6)’s fiduciary duty as such officer, director, employee, agent, or participant if, as a result thereof, the [company](/usc/15/662.md?p=3) suffers or is in imminent danger of suffering financial loss or other damage.
- (c) **Unlawful acts—** Except with the written consent of the [Administrator](/usc/15/662.md?p=2), it shall be unlawful—
  - (1) for any [person](/usc/15/7a.md?p=6) to take office as an officer, director, or employee of any [New Markets Venture Capital company](/usc/15/689.md?p=4), or to become an agent or participant in the conduct of the affairs or management of such a [company](/usc/15/662.md?p=3), if the [person](/usc/15/7a.md?p=6)—
    - (A) has been convicted of a felony, or any other criminal offense involving dishonesty or breach of trust; or
    - (B) has been found civilly liable in damages, or has been permanently or temporarily enjoined by an order, judgment, or decree of a court of competent jurisdiction, by reason of any act or practice involving fraud, or breach of trust; and
  - (2) for any [person](/usc/15/7a.md?p=6)[^1] continue to serve in any of the capacities described in [paragraph (1)](#c-1), if—
    - (A) the [person](/usc/15/7a.md?p=6) is convicted of a felony, or any other criminal offense involving dishonesty or breach of trust; or
    - (B) the [person](/usc/15/7a.md?p=6) is found civilly liable in damages, or is permanently or temporarily enjoined by an order, judgment, or decree of a court of competent jurisdiction, by reason of any act or practice involving fraud or breach of trust.

## Footnotes

[^1]: So in original. Probably should be followed by “to”.

## Source credit

(Pub. L. 85–699, title III, § 365, as added Pub. L. 106–554, § 1(a)(8) [§ 1(b)(3)], Dec. 21, 2000, 114 Stat. 2763, 2763A–663.)

## Notes

### Editorial Notes

### References in Text

For definition of “this chapter”, referred to in subsec. (a), see References in Text note set out under section 661 of this title.