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Johnny Jones does not disclose periodic and current reports for the company that has expanded instead he is seen to enrich their stock portfolio which is taken as an unlawful activity. The Securities Act provides a penalty of not more than $10,000 upon conviction while the security exchange act provides that any person or anyone who becomes associated with someone who violates the requirements of the act or makes a false and misleading statement with regard to the act will be liable to a fine of $ 5,000,000 or imprisonment that does not exceed 20 years.