---
kind: "section"
citation: "15 U.S.C. § 78j"
title: "15"
title_heading: "Commerce and Trade"
number: "78j"
heading: "Manipulative and deceptive devices"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/15/78j"
units:
  - "Chapter 2B — Securities Exchanges"
---

# §78j. Manipulative and deceptive devices


It shall be unlawful for any [person](/usc/15/78c.md?p=a-9), directly or indirectly, by the use of any means or instrumentality of [interstate commerce](/usc/15/78c.md?p=a-17) or of the mails, or of any [facility](/usc/15/78c.md?p=a-2) of any national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1)—

- (a)
  - (1) To effect a short sale, or to use or employ any stop-loss order in connection with the [purchase](/usc/15/78c.md?p=a-13) or sale, of any [security](/usc/15/78c.md?p=a-10) other than a government [security](/usc/15/78c.md?p=a-10), in contravention of such rules and regulations as the [Commission](/usc/15/78c.md?p=a-15) may prescribe as necessary or appropriate in the public interest or for the protection of investors.
  - (2) Paragraph (1) of this subsection shall not apply to [security futures products](/usc/15/78c.md?p=a-56).
- (b) To use or employ, in connection with the [purchase](/usc/15/78c.md?p=a-13) or sale of any [security](/usc/15/78c.md?p=a-10) registered on a national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) or any [security](/usc/15/78c.md?p=a-10) not so registered, or any [securities](/usc/15/78c.md?p=a-10)-based [swap](/usc/15/78c.md?p=a-69) [agreement](/usc/15/7a.md?p=2)[^1] any manipulative or deceptive [device](/usc/15/55.md?p=d) or contrivance in contravention of such rules and regulations as the [Commission](/usc/15/78c.md?p=a-15) may prescribe as necessary or appropriate in the public interest or for the protection of investors.
- (c)
  - (1) To effect, accept, or facilitate a transaction involving the loan or borrowing of [securities](/usc/15/78c.md?p=a-10) in contravention of such rules and regulations as the [Commission](/usc/15/78c.md?p=a-15) may prescribe as necessary or appropriate in the public interest or for the protection of investors.
  - (2) Nothing in [paragraph (1)](#c-1) may be construed to limit the authority of the [appropriate Federal banking agency](/usc/15/78c.md?p=a-72) (as defined in [section 1813(q) of title 12](/usc/12/1813.md?p=q)), the National Credit Union [Administration](/usc/15/636e.md?p=1), or any other Federal department or agency having a responsibility under Federal law to prescribe rules or regulations restricting transactions involving the loan or borrowing of [securities](/usc/15/78c.md?p=a-10) in order to protect the safety and soundness of a [financial institution](/usc/15/78c.md?p=a-46) or to protect the financial system from systemic risk.

Rules promulgated under [subsection (b)](#b) that prohibit fraud, manipulation, or insider trading (but not rules imposing or specifying reporting or recordkeeping requirements, procedures, or standards as prophylactic measures against fraud, manipulation, or insider trading), and judicial precedents decided under [subsection (b)](#b) and rules promulgated thereunder that prohibit fraud, manipulation, or insider trading, shall apply to [security-based swap agreements](/usc/15/78c.md?p=a-78-A) to the same extent as they apply to [securities](/usc/15/78c.md?p=a-10). Judicial precedents decided under [section 77q(a) of this title](/usc/15/77q.md?p=a) and sections [78i](/usc/15/78i.md), [78o](/usc/15/78o.md), [78p](/usc/15/78p.md), [78t](/usc/15/78t.md), and [78u–1](/usc/15/78u–1.md) of this title, and judicial precedents decided under applicable rules promulgated under such sections, shall apply to [security-based swap agreements](/usc/15/78c.md?p=a-78-A) to the same extent as they apply to [securities](/usc/15/78c.md?p=a-10).


## Footnotes

[^1]: So in original. Probably should be followed by a comma.

## Source credit

(June 6, 1934, ch. 404, title I, § 10, 48 Stat. 891; Pub. L. 106–554, § 1(a)(5) [title II, § 206(g), title III, § 303(d)], Dec. 21, 2000, 114 Stat. 2763, 2763A–432, 2763A–454; Pub. L. 111–203, title VII, § 762(d)(3), title IX, §§ 929L(2), 984(a), July 21, 2010, 124 Stat. 1761, 1861, 1932.)

## Notes

### Editorial Notes

### Amendments

2010—Pub. L. 111–203, § 762(d)(3)(B), which directed amendment of the matter following subsection (b) “by striking ‘(as defined in section 206B of the Gramm-Leach-Bliley Act), in each place that such terms appear’ ”, was executed by striking out “(as defined in section 206B of the Gramm-Leach-Bliley Act)” after “security-based swap agreements” in two places in concluding provisions following subsec. (c) to reflect the probable intent of Congress.

Subsec. (a)(1). Pub. L. 111–203, § 929L(2), substituted “other than a government security” for “registered on a national securities exchange”.

Subsec. (b). Pub. L. 111–203, § 762(d)(3)(A), struck out “(as defined in section 206B of the Gramm-Leach-Bliley Act),” after “securities-based swap agreement”.

Subsec. (c). Pub. L. 111–203, § 984(a), which directed amendment of this section by adding subsec. (c) at the end, was executed by adding subsec. (c) after subsec. (b) to reflect the probable intent of Congress.

2000—Pub. L. 106–554, § 1(a)(5) [title III, § 303(d)(2)], inserted concluding provisions at end.

Subsec. (a). Pub. L. 106–554, § 1(a)(5) [title II, § 206(g)], designated existing provisions as par. (1) and added par. (2).

Subsec. (b). Pub. L. 106–554, § 1(a)(5) [title III, § 303(d)(1)], inserted “or any securities-based swap agreement (as defined in section 206B of the Gramm-Leach-Bliley Act),” before “any manipulative or deceptive device”.

### Statutory Notes and Related Subsidiaries

### Effective Date of 2010 Amendment

Amendment by sections 929L(2) and 984(a) of Pub. L. 111–203 effective 1 day after July 21, 2010, except as otherwise provided, see section 4 of Pub. L. 111–203, set out as an Effective Date note under section 5301 Title 12, Banks and Banking.

Amendment by section 762(d)(3) of Pub. L. 111–203 effective on the later of 360 days after July 21, 2010, or, to the extent a provision of subtitle B (§§ 761–774) of title VII of Pub. L. 111–203 requires a rulemaking, not less than 60 days after publication of the final rule or regulation implementing such provision of subtitle B, see section 774 of Pub. L. 111–203, set out as a note under section 77b of this title.

### Regulations

Pub. L. 111–203, title IX, § 984(b), July 21, 2010, 124 Stat. 1933, provided that: “Not later than 2 years after the date of enactment of this Act [July 21, 2010], the Commission shall promulgate rules that are designed to increase the transparency of information available to brokers, dealers, and investors, with respect to the loan or borrowing of securities.”

[For definitions of terms used in section 984(b) of Pub. L. 111–203, set out above, see section 5301 of Title 12, Banks and Banking.]

### Prohibition of Insider Trading

Pub. L. 112–105, § 4(a), Apr. 4, 2012, 126 Stat. 292, provided that: “Members of Congress and employees of Congress are not exempt from the insider trading prohibitions arising under the securities laws, including section 10(b) of the Securities Exchange Act of 1934 [15 U.S.C. 78j(b)] and Rule 10b–5 thereunder.”

[For definitions of “Member of Congress” and “employee of Congress”, see section 2 of Pub. L. 112–105, set out as a Definitions note under section 13101 of Title 5, Government Organization and Employees.]

### Application of Insider Trading Laws

Pub. L. 112–105, § 9(b)(1), Apr. 4, 2012, 126 Stat. 297, provided that: “Executive branch employees, judicial officers, and judicial employees are not exempt from the insider trading prohibitions arising under the securities laws, including section 10(b) of the Securities Exchange Act of 1934 [15 U.S.C. 78j(b)] and Rule 10b–5 thereunder.”

[For definitions of “executive branch employees”, “judicial officers”, and “judicial employees”, see section 2 of Pub. L. 112–105, set out as a Definitions note under section 13101 of Title 5, Government Organization and Employees.]

### Executive Documents

### Transfer of Functions

For transfer of functions of Securities and Exchange Commission, with certain exceptions, to Chairman of such Commission, see Reorg. Plan No. 10 of 1950, §§ 1, 2, eff. May 24, 1950, 15 F.R. 3175, 64 Stat. 1265, set out under section 78d of this title.