[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2798 Introduced in House (IH)]

111th CONGRESS
  1st Session
                                H. R. 2798

 To increase securities protection coverage in the event of stolen or 
                missing assets, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 10, 2009

Mr. Arcuri (for himself and Mr. Maffei) introduced the following bill; 
       which was referred to the Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
 To increase securities protection coverage in the event of stolen or 
                missing assets, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Support Investment Protection for 
Customers Reform Act of 2009''.

SEC. 2. INCREASING SECURITIES INVESTOR PROTECTION CORPORATION CASH 
              COVERAGE.

    (a) Increasing the Cash Limit of Protection From $100,000 to 
$250,000.--Section 9 of the Securities Investor Protection Act (15 
U.S.C. 78fff-3) is amended--
            (1) in subsection (a)(1), by striking ``$100,000 for each 
        such customer'' and inserting ``the standard maximum cash 
        advance amount for each such customer, as determined in 
        accordance with subsection (d)''; and
            (2) by adding at the end the following new subsections:
    ``(d) Standard Maximum Cash Advance Amount.--For purposes of this 
Act, the term `standard maximum cash advance amount' means $250,000, 
adjusted as provided under subsection (e) after March 31, 2010.
    ``(e) Inflation Adjustment.--
            ``(1) In general.--Not later than April 1, 2010, and the 
        first day of each 5-year period thereafter, and subject to the 
        approval of the Commission, the Board of Directors of SIPC 
        shall consider the factors set forth under paragraph (5), and, 
        upon determining that an inflation adjustment is appropriate, 
        shall prescribe the amount by which the standard maximum cash 
        advance amount applicable to a customer claim shall be 
        increased by calculating the product of--
                    ``(A) $250,000; and
                    ``(B) the ratio of the annual value of the Personal 
                Consumption Expenditures Chain-Type Price Index (or any 
                successor index thereto), published by the Department 
                of Commerce, for the calendar year preceding the year 
                in which the adjustment is calculated under this 
                paragraph, to the published annual value of such index 
                for the calendar year preceding the date this 
                subparagraph takes effect. The values used in such 
                calculation shall be the applicable values most 
                recently published by the Department of Commerce.
            ``(2) Rounding.--If the amount determined under paragraph 
        (1) for any period is not a multiple of $10,000, the amount so 
        determined shall be rounded down to the nearest $10,000.
            ``(3) Publication and report to congress.--Not later than 
        April 5 of any calendar year in which an adjustment is required 
        to be calculated under paragraph (1) to the standard maximum 
        cash advance amount--
                    ``(A) the Commission shall publish in the Federal 
                Register the standard maximum cash advance amount, as 
                so calculated; and
                    ``(B) the Board of Directors of SIPC shall submit a 
                report to the Congress containing the amount described 
                in subparagraph (A).
            ``(4) 6-month implementation period.--Any increase in the 
        standard maximum cash advance amount shall take effect on 
        January 1 of the year immediately succeeding the calendar year 
        in which such increase is made.
            ``(5) Inflation adjustment consideration.--In making any 
        determination under paragraph (1) to increase the standard 
        maximum cash advance amount, the Board of Directors of SIPC 
        shall consider, among other factors--
                    ``(A) the overall state of the fund;
                    ``(B) the economic conditions affecting members of 
                SIPC; and
                    ``(C) potential problems affecting members of 
                SIPC.''.
    (b) Increasing SIPC Line of Credit With the Department of 
Treasury.--Section 4(h) of the Securities Investor Protection Act (15 
U.S.C. 78ddd(h)) is amended by striking out ``$1,000,000,000'' and 
inserting ``the lesser of $2,500,000,000 or the target amount of the 
SIPC Fund specified in the bylaws of SIPC''.

SEC. 3. AMENDMENTS TO THE SECURITIES INVESTOR PROTECTION ACT.

    (a) Increasing the Minimum Assessment Paid by SIPC Members.--
Section 4(d)(1)(C) of the Securities Investor Protection Act (15 U.S.C. 
78ddd(d)(1)(C)) is amended by striking ``$150'' and inserting 
``$1,000''.
    (b) SIPC as Trustee in SIPA Liquidation Proceedings.--Section 
5(b)(3) of the Securities Investor Protection Act (15 U.S.C. 
78eee(b)(3)) is amended--
            (1) by striking ``SIPC has determined that the liabilities 
        of the debtor to unsecured general creditors and to 
        subordinated lenders appear to aggregate less than $750,000 and 
        that''; and
            (2) by striking ``five hundred'' and inserting ``5,000''.
    (c) Insiders Ineligible for SIPC Advance.--
            (1) In general.--Section 9(a)(4) of the Securities Investor 
        Protection Act (15 U.S.C. 78fff-3(a)(4)) is amended by 
        inserting ``an insider,'' after ``or net profits of the 
        debtor,''.
            (2) Insider defined.--Section 16 of the Securities Investor 
        Protection Act (15 U.S.C. 78lll) is amended by adding at the 
        end the following new paragraph:
            ``(15) Insider.--The term `insider' shall have the same 
        meaning as in section 101(31) of title 11, United States 
        Code.''.
    (d) Eligibility for Direct Payment Procedure.--Section 10(a)(4) of 
the Securities Investor Protection Act (15 U.S.C. 78fff-4(a)(4)) is 
amended by striking out ``$250,000'' and inserting ``$850,000''.
    (e) Increasing the Fine for Prohibited Acts Under SIPA.--Section 
14(c) of the Securities Investor Protection Act (15 U.S.C. 78jjj(c)) is 
amended by striking ``$50,000'' each place it appears and inserting 
``$250,000''.
    (f) Penalty for Misrepresentation of SIPC Membership or 
Protection.--Section 14 of the Securities Investor Protection Act (15 
U.S.C. 78jjj) is amended by inserting at the end the following new 
subsection:
    ``(d) Misrepresentation of SIPC Membership or Protection.--
            ``(1) Any person who falsely represents by any means 
        (including through the Internet or any other medium of mass 
        communication), with actual knowledge of the falsity of the 
        representation and with an intent to deceive or cause injury to 
        another, that such person, or another person, is a member of 
        SIPC or that any person or account is protected or is eligible 
        for protection by SIPC, shall be--
                    ``(A) civilly liable for any damages caused 
                thereby; and
                    ``(B) fined not more than $250,000 or imprisoned 
                for not more than 5 years.
            ``(2) Any Internet service provider who, on or through a 
        system or network controlled or operated by the service 
        provider, transmits, routes, provides connection for, or stores 
        any material containing any misrepresentation described in 
        paragraph (1) shall be civilly liable for any damages caused by 
        such misrepresentation, including damages suffered by SIPC, if 
        such Internet service provider--
                    ``(A) has actual knowledge that the material 
                contains a misrepresentation described in paragraph 
                (1), or
                    ``(B) in the absence of actual knowledge, is aware 
                of facts or circumstances from which it is apparent 
                that such material contains a misrepresentation 
                described in paragraph (1), and
        upon obtaining such knowledge or awareness, fails to act 
        expeditiously to remove, or disable access to, such material.
            ``(3) Any court having jurisdiction of a civil action 
        arising under this Act may grant temporary and final 
        injunctions on such terms as it deems reasonable to prevent or 
        restrain any violation of paragraph (1) or (2). Any such 
        injunction may be served anywhere in the United States on the 
        person enjoined, shall be operative throughout the United 
        States, and shall be enforceable, by proceedings in contempt or 
        otherwise, by any United States court having jurisdiction over 
        that person. The clerk of the court granting the injunction 
        shall, when requested by any other court in which enforcement 
        of the injunction is sought, transmit promptly to the other 
        court a certified copy of all papers in the case on file in 
        such clerk's office.''.

SEC. 4. COMMISSION STUDY ON INTERNATIONAL FINANCIAL COOPERATION.

    (a) Sense of Congress Regarding Necessity of an International 
Effort To Investigate and Thwart Global Investment Fraud.--It is the 
sense of Congress that--
            (1) international commerce and global investment have grown 
        exponentially since World War II, creating a marketplace 
        without borders;
            (2) investors of all sizes deserve assurances that their 
        financial assets are protected from theft, and their 
        transactions are legitimate and accounted for; and
            (3) the case against Bernard L. Madoff Investment 
        Securities, Inc. represents one of the worst and most 
        devastating instances of financial fraud and deception in this 
        Nation's history, resulting in untold billions of dollars in 
        missing assets and affecting thousands of investors in this 
        Nation and around the globe.
    (b) Federal Commission on International Financial Fraud.--
            (1) Establishment.--There is hereby established within the 
        Office of Inspector General of the Securities and Exchange 
        Commission a Commission on International Financial Fraud 
        (hereinafter in this subsection referred to as the 
        ``Commission'').
            (2) Membership.--The Commission shall be composed of the 
        following members:
                    (A) The Chairman of the Board of Directors of the 
                Securities Investor Protection Corporation.
                    (B) The Chairman of the Securities Exchange 
                Commission.
                    (C) The Secretary of the Treasury.
                    (D) The Chairman of the Board of Governors of the 
                Federal Reserve System.
                    (E) The Secretary of State.
                    (F) The Director of the Federal Bureau of 
                Investigation.
                    (G) One or more additional individuals, at the 
                discretion of the Inspector General of the Securities 
                and Exchange Commission, where each such individual is 
                the heads of a State, local, private, or not-for-profit 
                entity demonstrating research and academic expertise on 
                issues pertaining to international investment and 
                financial fraud.
            (3) Duties.--The Commission shall--
                    (A) study potential relevance, structure, and long-
                term benefit of--
                            (i) an international financial court; and
                            (ii) establishing an international process 
                        for the adjudication of cases of financial 
                        fraud;
                    (B) establish partnerships with State, local, 
                private, and not-for-profit entities demonstrating 
                research and academic expertise on issues pertaining to 
                international investment and financial fraud;
                    (C) subject to the approval of the Inspector 
                General of the Securities and Exchange Commission, 
                facilitate communication and information sharing with 
                international public, private, and not-for-private 
                entities relating to--
                            (i) the creation of an international 
                        financial court; and
                            (ii) establishing an international process 
                        for the adjudication of cases of financial 
                        fraud; and
                    (D) study investigative and insurance protection 
                frameworks for international United States investments.
            (4) Reports.--Not later than 3 months after the date of the 
        enactment of this Act, and quarterly thereafter, the Commission 
        shall issue a report to the Congress containing--
                    (A) the Commission's recommendations on how an 
                international financial court could be structured;
                    (B) the Commission's recommendation on how a 
                process for the international adjudication of claims of 
                financial fraud could be structured; and
                    (C) any additional recommendations of the 
                Commission.
            (5) Termination.--The Commission shall terminate on the 
        date that is 1 year after the date of the enactment of this 
        Act.
            (6) Funding.--The cost of funding the Commission shall be 
        divided equally among each Federal agency or department which 
        is represented by a Member of the Commission. Notwithstanding 
        the previous sentence, any State, local, private, or not-for-
        profit entity that chooses to may also contribute funds to pay 
        for the cost of funding the Commission.
                                 <all>