---
kind: "section"
citation: "15 U.S.C. § 78t–1"
title: "15"
title_heading: "Commerce and Trade"
number: "78t–1"
heading: "Liability to contemporaneous traders for insider trading"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/15/78t-1"
units:
  - "Chapter 2B — Securities Exchanges"
---

# §78t–1. Liability to contemporaneous traders for insider trading

- (a) **Private rights of action based on contemporaneous trading—** Any [person](/usc/15/78c.md?p=a-9) who violates any provision of this chapter or the rules or regulations thereunder by purchasing or selling a [security](/usc/15/78c.md?p=a-10) while in possession of material, nonpublic information shall be liable in an action in any court of competent jurisdiction to any [person](/usc/15/78c.md?p=a-9) who, contemporaneously with the [purchase](/usc/15/78c.md?p=a-13) or sale of [securities](/usc/15/78c.md?p=a-10) that is the subject of such violation, has purchased (where such violation is based on a sale of [securities](/usc/15/78c.md?p=a-10)) or sold (where such violation is based on a [purchase](/usc/15/78c.md?p=a-13) of [securities](/usc/15/78c.md?p=a-10)) [securities](/usc/15/78c.md?p=a-10) of the same class.
- (b) **Limitations on liability—**
  - (1) **Contemporaneous trading actions limited to profit gained or loss avoided—** The total amount of damages imposed under [subsection (a)](#a) shall not exceed the profit gained or loss avoided in the transaction or transactions that are the subject of the violation.
  - (2) **Offsetting disgorgements against liability—** The total amount of damages imposed against any [person](/usc/15/78c.md?p=a-9) under [subsection (a)](#a) shall be diminished by the amounts, if any, that such [person](/usc/15/78c.md?p=a-9) may be required to disgorge, pursuant to a court order obtained at the instance of the [Commission](/usc/15/78c.md?p=a-15), in a proceeding brought under [section 78u(d) of this title](/usc/15/78u.md?p=d) relating to the same transaction or transactions.
  - (3) **Controlling person liability—** No [person](/usc/15/78c.md?p=a-9) shall be liable under this section solely by reason of employing another [person](/usc/15/78c.md?p=a-9) who is liable under this section, but the liability of a controlling [person](/usc/15/78c.md?p=a-9) under this section shall be subject to [section 78t(a) of this title](/usc/15/78t.md?p=a).
  - (4) **Statute of limitations—** No action may be brought under this section more than 5 years after the date of the last transaction that is the subject of the violation.
- (c) **Joint and several liability for communicating—** Any [person](/usc/15/78c.md?p=a-9) who violates any provision of this chapter or the rules or regulations thereunder by communicating material, nonpublic information shall be jointly and severally liable under [subsection (a)](#a) with, and to the same extent as, any [person](/usc/15/78c.md?p=a-9) or [persons](/usc/15/78c.md?p=a-9) liable under [subsection (a)](#a) to whom the communication was directed.
- (d) **Authority not to restrict other express or implied rights of action—** Nothing in this section shall be construed to limit or condition the right of any [person](/usc/15/78c.md?p=a-9) to bring an action to enforce a requirement of this chapter or the availability of any cause of action implied from a provision of this chapter.
- (e) **Provisions not to affect public prosecutions—** This section shall not be construed to bar or limit in any manner any action by the [Commission](/usc/15/78c.md?p=a-15) or the Attorney General under any other provision of this chapter, nor shall it bar or limit in any manner any action to recover penalties, or to seek any other order regarding penalties.

## Source credit

(June 6, 1934, ch. 404, title I, § 20A, as added Pub. L. 100–704, § 5, Nov. 19, 1988, 102 Stat. 4680.)

## Notes

### Editorial Notes

### References in Text

This chapter, referred to in subsecs. (a), (c), (d), and (e), was in the original “this title”. See References in Text note set out under section 78a of this title.

### Statutory Notes and Related Subsidiaries

### Effective Date

Section not applicable to actions occurring before Nov. 19, 1988, see section 9 of Pub. L. 100–704 set out as an Effective Date of 1988 Amendment note under section 78o of this title.