109 HR 5956 IH: Fair Fund Improvement U.S. House of Representatives 2006-07-28 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.

I 109th CONGRESS 2d Session H. R. 5956 IN THE HOUSE OF REPRESENTATIVES July 28, 2006 Mr. Baker (for himself, Mr. Kanjorski, Mr. Oxley, Mr. Frank of Massachusetts, and Mr. Shays) introduced the following bill; which was referred to the Committee on Financial Services A BILL To make all civil penalties collected by the Securities and Exchange Commission in securities law enforcement actions available for the benefit of victims of securities law violations, and for other purposes.

1.

Short title

This Act may be cited as the Fair Fund Improvement Act.

2.

Fair Fund Improvements

(a)

Amendment

Subsection (a) of section 308 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7246(a)) is amended to read as follows: (a)

Civil Penalties To Be Used for the Relief of Victims

If in any judicial or administrative action brought by the Commission under the securities laws (as such term is defined in section 3(a)(47) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(47)), the Commission obtains a civil penalty against any person for a violation of such laws, the amount of such civil penalty shall, on the motion or at the direction of the Commission, be added to and become part of a disgorgement fund or other fund established for the benefit of the victims of such violation. . (b)

Conforming Amendments

(1)Section 308(b) of such Act is amended— (A)by striking for a disgorgement fund described in subsection (a) and inserting for a disgorgement fund or other fund described in subsection (a); and (B)by striking in the disgorgement fund and inserting in such fund. (2)Section 308 of such Act is further amended by striking subsection (e).

3.

Authority to contract with private counsel for legal services to collect delinquent judgments and orders

Subsection (b) of section 4 of the Securities Exchange Act of 1934 (15 U.S.C. 78d(b)) is amended— (1)in the subsection heading by striking and leasing authority and inserting , leasing authority, and contracting authority; and (2)by adding at the end of such subsection the following new paragraph: (4)

Contracting authority

(A)

In general

Notwithstanding any other provision of law, the Commission is authorized to enter into contracts to retain private legal counsel to furnish legal services, including representation in litigation, negotiation, compromise, and settlement, in the case of any claim of indebtedness resulting from any judgment or order (either by litigation or settlement) obtained by the Commission in any judicial action or administrative proceeding brought by or on behalf of the Commission. Private counsel retained under this paragraph may represent the Commission in such debt collection matters to the same extent as the Commission may represent itself. (B)

Terms and conditions of contract

Each such contract shall include such terms and conditions as the Commission considers necessary and appropriate, and shall include provisions specifying— (i)the amount of the fee to be paid to the private counsel under such contract or the method for calculating that fee; (ii)that the Commission retains the authority to represent itself, resolve a dispute, compromise a claim, end collection efforts, and refer a matter to other private counsel or to the Attorney General; and (iii)that the Commission may terminate either the contract or the private counsel’s representation of the Commission in particular cases for any reason, including for the convenience of the Commission. (C)

Payment of fees

Notwithstanding section 3302(b) of title 31, United States Code, a contract under this paragraph may provide that fees and costs incurred by private counsel under such contracts are payable from the amounts recovered. (D)

Competition requirements

Nothing in this paragraph shall relieve the Commission of the competition requirements set forth in title III of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 251 et seq.). (E)

Counterclaims

In any action to recover indebtedness which is brought on behalf of the Commission by private counsel retained under this paragraph, no counterclaim may be asserted against the Commission unless the counterclaim is served directly on the Commission. Such service shall be made in accordance with the rules of procedure of the court in which the action is brought. .