[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>