116 STAT. 794 PUBLIC LAW 107-204-^ULY 30, 2002 disciplinary efforts with respect to such auditors and services, as well as for additional professional support staff necessary to strengthen the programs of the Commission involving Full Disclosure and Prevention and Suppression of Fraud, risk management, industry technology review, compliance, inspections, examinations, market regulation, and investment management.". SEC. 602. APPEARANCE AND PRACTICE BEFORE THE COMMISSION. The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended by inserting after section 4B the following: 15 USC 78d-3. "SEC. 4C. APPEARANCE AND PRACTICE BEFORE THE COMMISSION. "(a) AUTHORITY TO CENSURE. —The Commission may censure any person, or deny, temporarily or permanently, to any person the privilege of appearing or practicing before the Commission in any way, if that person is foim.d by the Commission, after notice and opportunity for hearing in the matter— "(1) not to possess the requisite qualifications to represent others; "(2) to be lacking in character or integrity, or to have engaged in unethical or improper professional conduct; or "(3) to have willfully violated, or willfully aided and abetted the violation of, any provision of the securities laws or the rules and regulations issued thereunder. "(b) DEFINITION. —With respect to any registered public accounting firm or associated person, for purposes of this section, the term 'improper professional conduct' means— "(1) intentional or knowing conduct, including reckless conduct, that results in a violation of applicable professional standards; and "(2) negligent conduct in the form of— "(A) a single instance of highly unreasonable conduct that results in a violation of applicable professional standards in circumstances in which the registered public accounting firm or associated person knows, or should know, that heightened scrutiny is warranted; or "(B) repeated instances of unreasonable conduct, each resulting in a violation of applicable professional standards, that indicate a lack of competence to practice before the Commission.". SEC. 603. FEDERAL COURT AUTHORITY TO IMPOSE PENNY STOCK BARS. (a) SECURITIES EXCHANGE ACT OF 1934. —Section 21(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78u(d)), as amended by this Act, is amended by adding at the end the following: " (6) AUTHORITY OF A COURT TO PROHIBIT PERSONS FROM PARTICI- PATING IN AN OFFERING OF PENNY STOCK. — "(A) IN GENERAL. —In any proceeding under paragraph (1) against any person participating in, or, at the time of the alleged misconduct who was participating in, an offering of penny stock, the court may prohibit that person from participating in an offering of penny stock, conditionally or unconditionally, and permanently or for such period of time as the court shall determine. "(B) DEFINITION.— For purposes of this paragraph, the term 'person participating in an offering of penny stock' includes
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