I 111th CONGRESS 1st Session H. R. 3550 IN THE HOUSE OF REPRESENTATIVES September 10, 2009 Mr. Hodes (for himself and Ms. Moore of Wisconsin) introduced the following bill; which was referred to the Committee on Financial Services, and in addition to the Committee on the Judiciary, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To enhance penalties for violations of securities protections that involve targeting seniors.

1.

Short title

This Act may be cited as the Senior Investor Protections Enhancement Act of 2009.

2.

Definitions

(a)

In general

In this Act, the following definitions shall apply: (1)

Senior

The term senior means an individual who is 62 years of age or older. (2)

Securities laws

The term securities laws means the Securities Act of 1933 (15 U.S.C. 77b et seq.), the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.), the Investment Company Act of 1940 (15 U.S.C. 80a et seq.), and the Investment Advisers Act of 1940 (15 U.S.C. 80b et seq.). (b)

Application of senior definition

(1)

Securities Act of 1933

Section 2(a) of the Securities Act of 1933 (15 U.S.C. 77b(a)) is amended by adding at the end the following: (17)The term senior means an individual who is 62 years of age or older. . (2)

Securities Exchange Act of 1934

Section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)) is amended by adding at the end the following: (65)The term senior means an individual who is 62 years of age or older. . (3)

Investment Company Act of 1940

Section 2(a) of the Investment Company Act of 1940 (15 U.S.C. 80a–2(a)) is amended by adding at the end the following: (54)The term senior means an individual who is 62 years of age or older. . (4)

Investment Advisers Act of 1940

Section 202(a) of the Investment Advisers Act of 1940 (15 U.S.C. 80b–2(a)) is amended by adding at the end the following: (29)The term senior means an individual who is 62 years of age or older. .

3.

Enhanced penalties for violations of Securities Act of 1933

(a)

Civil actions

Section 20(d)(2) of the Securities Act of 1933 (15 U.S.C. 77t(d)(2)) is amended by adding at the end the following: (D)

Special rule for seniors

Notwithstanding subparagraphs (A), (B), and (C), if a person commits a violation described in paragraph (1), and the violation is directed toward, targets, or is committed against a person who, at the time of the violation, is a senior, the Commission, in addition to any other applicable civil penalty, may impose a civil penalty of not more than $50,000 for each such violation. . (b)

Other violations

Section 24 of the Securities Act of 1933 (15 U.S.C. 77x) is amended— (1)by inserting (a) In general.— before Any person; and (2)by adding at the end the following: (b)

Special rule for seniors

Notwithstanding subsection (a), if a person commits a violation described in subsection (a), and the violation is directed toward, targets, or is committed against a person who, at the time of the violation is a senior, the Commission, in addition to any other applicable civil penalty, may impose a civil penalty of not more than $50,000 for each such violation. .

4.

Enhanced penalties for violations of Securities Act of 1934

(a)

Civil actions

Section 21(d)(3)(B) of the Securities Exchange Act of 1934 (15 U.S.C. 78u(d)(3)(B)) is amended by adding at the end the following: (iv)

Special rule for seniors

Notwithstanding clauses (i), (ii), and (iii), if a person commits a violation described in subparagraph (A), and the violation is directed toward, targets, or is committed against a person who, at the time of the violation, is a senior, the Commission, in addition to any other applicable civil penalty, may impose a civil penalty of not more than $50,000 for each such violation. . (b)

Willful violations

Section 21B(b) of the Securities Exchange Act of 1934 (15 U.S.C. 78u–2(b)) is amended by adding at the end the following: (4)

Special rule for seniors

Notwithstanding paragraphs (1), (2), and (3), if a person engages in an act or omission described in subsection (a), and the violation is directed toward, targets, or is committed against a person who, at the time of the violation, is a senior, the Commission, in addition to any other applicable civil penalty, may impose a civil penalty of not more than $50,000 for each such violation. . (c)

Other violations

Section 32 of the Securities Exchange Act of 1934 (15 U.S.C. 78ff) is amended by adding at the end the following: (d)

Special rule for seniors

Notwithstanding subsections (a), (b), and (c), if a person commits a violation described in this section, and the violation is directed toward, targets, or is committed against a person, who at the time of the violation, is a senior, the Commission, in addition to any other applicable civil penalty, may impose a civil penalty of not more than $50,000 for each such violation. .

5.

Enhanced penalties for violations of Investment Company Act of 1940

(a)

Willful violations

Section 9(d)(2) of the Investment Company Act of 1940 (15 U.S.C. 80a–9(d)(2)) is amended by adding at the end the following: (D)

Special rule for seniors

Notwithstanding subparagraphs (A), (B), and (C), if a person engages in an act or omission described in paragraph (1), and the violation is directed toward, targets, or is committed against a person, who, at the time of the violation, is a senior, the Commission, in addition to any other applicable civil penalty, may impose a civil penalty of not more than $50,000 for each such violation. . (b)

Civil actions

Section 42(e)(2) of the Investment Company Act of 1940 (15 U.S.C. 80a–41(e)(2)) is amended by adding at the end the following: (D)

Special rule for seniors

Notwithstanding subparagraphs (A), (B), and (C), if a person commits a violation described in paragraph (1), and the violation is directed toward, targets, or is committed against a person who, at the time of the violation, is senior, the Commission, in addition to any other applicable civil penalty, may impose a civil penalty not more than $50,000 for each such violation. . (c)

Other violations

Section 49 of the Investment Company Act of 1940 (15 U.S.C. 80a–48) is amended— (1)by inserting (a) In general.— before Any person; and (2)by adding at the end the following: (b)

Special rule for seniors

Notwithstanding subsection (a), if a person commits a violation described in subsection (a), and the violation is directed toward, targets, or is committed against a person who, at the time of the violation, is a senior, the Commission, in addition to any other applicable civil penalty, may impose a civil penalty of not more than $50,000 for each such violation. .

6.

Enhanced penalties for violations of Investment Advisers Act of 1940

(a)

Willful violations

Section 203(i)(2) of the Investment Advisers Act of 1940 (15 U.S.C. 80b–3(i)(2)) is amended by adding at the end the following: (D)

Special rule for seniors

Notwithstanding subparagraphs (A), (B), and (C), if a person engages in an act or omission described in paragraph (1), and the violation is directed toward, targets, or is committed against a person who, at the time of the violation, is a senior, the Commission, in addition to any other applicable civil penalty, may impose a civil penalty of not more than $50,000 for each such violation. . (b)

Civil actions

Section 209(e)(2) of the Investment Advisers Act of 1940 (15 U.S.C. 80b–9(e)(2)) is amended by adding at the end the following: (D)

Special rule for seniors

Notwithstanding subparagraphs (A), (B), and (C), if a person commits a violation under this title, and the violation is directed toward, targets, or is committed against a person who, at the time of the violation, is a senior, the Commission, in addition to any other applicable civil penalty, may impose a civil penalty of not more than $50,000 for each such violation. . (c)

Other violations

Section 217 of the Investment Advisers Act of 1940 (15 U.S.C. 80b–17) is amended— (1)by inserting (a) In general.— before Any person; and (2)by adding at the end the following: (b)

Special rule for seniors

Notwithstanding subsection (a), if a person commits a violation described in subsection (a), and the violation is directed toward, targets, or is committed against a person who, at the time of the violation, is a senior, the Commission, in addition to any other applicable civil penalty, may impose a civil penalty of not more than $50,000 for each such violation. .

7.

Directive to the United States Sentencing Commission

(a)

In general

Pursuant to its authority under section 994(p) of title 28, United States Code, and in accordance with this section, the United States Sentencing Commission shall review and amend the Federal sentencing guidelines and policy statements to ensure that the guideline offense levels and enhancements appropriately punish violations of the securities laws against seniors. (b)

Requirements

In carrying out this section, the United States Sentencing Commission shall— (1)ensure that section 2B1.1 and 2C1.1 of the Federal sentencing guidelines (and any successors thereto) apply to and punish offenses in which the victim of a violation of the securities laws is a senior; (2)ensure reasonable consistency with other relevant directives, provisions of the Federal sentencing guidelines, and statutory provisions; (3)make any necessary and conforming changes to the Federal sentencing guidelines, in accordance with the amendments made by this Act; and (4)ensure that the Federal sentencing guidelines adequately meet the purposes of sentencing set forth in section 3553(a)(2) of title 18, United States Code.