[Congressional Record Volume 155, Number 177 (Wednesday, December 2, 2009)]
[House]
[Pages H13404-H13405]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               ENHANCED S.E.C. ENFORCEMENT AUTHORITY ACT

  Mr. KANJORSKI. Madam Speaker, I move to suspend the rules and pass 
the bill (H.R. 2873) to provide enhanced enforcement authority to the 
Securities and Exchange Commission, as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 2873

       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 ``Enhanced S.E.C. Enforcement 
     Authority Act''.

     SEC. 2. NATIONWIDE SERVICE OF PROCESS.

       (a) Securities Act of 1933.--Section 22(a) of the 
     Securities Act of 1933 (15 U.S.C. 77v(a)) is amended by 
     inserting after the second sentence the following: ``In any 
     civil action instituted by the Commission under this title in 
     a United States district court for any judicial district, 
     subpoenas issued to compel the attendance of witnesses or the 
     production of documents or tangible things (or both) at any 
     hearing or trial may be served at any place within the United 
     States. Rule 45(c)(3)(A)(ii) of the Federal Rules of Civil 
     Procedure does not apply to a subpoena so issued.''.
       (b) Securities Exchange Act of 1934.--Section 27 of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78aa) is amended 
     by inserting after the third sentence the following: ``In any 
     civil action instituted by the Commission under this title in 
     a United States district court for any judicial district, 
     subpoenas issued to compel the attendance of witnesses or the 
     production of documents or tangible things (or both) at any 
     hearing or trial may be served at any place within the United 
     States. Rule 45(c)(3)(A)(ii) of the Federal Rules of Civil 
     Procedure does not apply to a subpoena so issued.''.
       (c) Investment Company Act of 1940.--Section 44 of the 
     Investment Company Act of 1940 (15 U.S.C. 80a-43) is amended 
     by inserting after the fourth sentence the following: ``In 
     any civil action instituted by the Commission under this 
     title in a United States district court for any judicial 
     district, subpoenas issued to compel the attendance of 
     witnesses or the production of documents or tangible things 
     (or both) at any hearing or trial may be served at any place 
     within the United States. Rule 45(c)(3)(A)(ii) of the Federal 
     Rules of Civil Procedure does not apply to a subpoena so 
     issued.''.
       (d) Investment Advisers Act of 1940.--Section 214 of the 
     Investment Advisers Act of 1940 (15 U.S.C. 80b-14) is amended 
     by inserting after the third sentence the following: ``In any 
     civil action instituted by the Commission under this title in 
     a United States district court for any judicial district, 
     subpoenas issued to compel the attendance of witnesses or the 
     production of documents or tangible things (or both) at any 
     hearing or trial may be served at any place within the United 
     States. Rule 45(c)(3)(A)(ii) of the Federal Rules of Civil 
     Procedure does not apply to a subpoena so issued.''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Pennsylvania (Mr. Kanjorski) and the gentleman from California (Mr. 
Campbell) each will control 20 minutes.
  The Chair recognizes the gentleman from Pennsylvania.


                             General Leave

  Mr. KANJORSKI. Madam Speaker, I ask unanimous consent that all 
Members may have 5 legislative days within which to revise and extend 
their remarks on this legislation and to insert extraneous material 
thereon.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Pennsylvania?
  There was no objection.
  Mr. KANJORSKI. Madam Speaker, I yield myself such time as I may 
consume and rise today to speak in support of H.R. 2873, the Enhanced 
S.E.C. Enforcement Authority Act, and to congratulate the gentleman 
from California (Mr. Campbell) for his work on these matters.

                              {time}  1200

  H.R. 2873 enjoys bipartisan support and previously passed the House 
in a slightly different form as part of the Securities Act of 2008 in 
the 110th Congress. In the 111th Congress, we've also incorporated this 
commonsense legislative reform in the Investors Protection Act of 2009. 
The House Financial Services Committee recently approved the Investors 
Protection Act, and that bill will come to the House floor in the near 
future as part of the broader financial services regulatory reform 
package.
  The U.S. Securities and Exchange Commission currently has nationwide 
service of process of subpoenas in administrative proceedings. This 
bill will enhance the Commission's enforcement

[[Page H13405]]

program by allowing subpoenas to be served nationwide in civil actions 
brought by the agency in Federal court. Currently, the Commission can 
issue a subpoena only within the Federal jurisdictional district where 
a trial takes place or within 100 miles of the courthouse. Witnesses in 
civil cases brought by the Commission are, however, often located 
outside of a trial court's subpoena range.
  With the proliferation of Internet scams that are perpetrated in 
multiple States, this quirk in the law has hampered the Commission's 
ability to efficiently and effectively mount its cases. Unless 
witnesses volunteer to appear at civil trials, the Commission must take 
depositions where the witnesses are located and use their written or 
videotaped deposition testimony at trial. Because of the associated 
travel for numerous lawyers and associates that must be present, 
depositions are generally more expensive than having a witness attend a 
trial.
  H.R. 2873 would fix this problem by allowing the Commission to have 
nationwide service of process just as it currently has for its 
administrative proceedings. These changes in subpoena procedures for 
civil cases would apply to the Securities Exchange Act of 1933, the 
Securities Exchange Act of 1934, the Investment Company Act of 1940, 
and the Investment Advisers Act of 1940. Nationwide service of process 
would produce a number of substantial advantages, including a 
significant savings in terms of travel costs and staff time.
  During these difficult economic times, we need to ensure that Federal 
agencies operate more efficiently. Additionally, we need to ensure that 
the Commission maximizes its limited resources to investigate and 
resolve wrongdoing in our securities markets. H.R. 2873 achieves both 
of these important objectives.
  Moreover, the bill that the House is considering today incorporates 
the recommendations of the Commission, the Justice Department and our 
colleagues on the House Judiciary Committee. The consensus legislation, 
therefore, not only has bipartisan support in the House but it also has 
support from within the administration and across committee 
jurisdictions in the House. In short, H.R. 2873 is a commonsense bill 
that will allow the U.S. Securities and Exchange Commission to operate 
more efficiently.
  Madam Speaker, I again commend the gentleman from California for his 
work on these matters, and I urge my colleagues to support this bill.
  I reserve the balance of my time.
  Mr. CAMPBELL. Mr. Speaker, I yield myself such time as I may consume.
  I would like to thank my colleague from Pennsylvania (Mr. Kanjorski) 
for his support of this bill and his kind words about this bill. I 
would also like to thank the Judiciary Committee for working with us on 
the Financial Services Committee to come up with language that is 
mutually acceptable and works for everyone on this bill.
  In light of the recent Wall Street scandals with Bernie Madoff and 
Stanford and others, we think it's appropriate to grant the Securities 
and Exchange Commission some additional enforcement tools that they 
need to fight fraud and corruption in the markets. As Mr. Kanjorski 
suggested--and I won't repeat the details of the bill which he 
accurately described--but if you think about it, most of these SEC 
enforcement issues will involve investors and perhaps conspirators from 
all over the country. But yet under current law, the SEC only has the 
authority to subpoena someone if they live within 100 miles of the 
Federal courthouse in which the trial is held.
  So this means that if they need witness testimony from a victim, from 
a co-conspirator, from somebody involved with the investment, from 
somebody who participated in the alleged crime or who was a victim of 
the alleged crime, they have to get a deposition from them if they live 
more than 100 miles outside of the courthouse. Those depositions can be 
costly, difficult to get, and they clearly are not as effective in a 
trial circumstance as a witness actually in the trial.
  This bill would correct that and simply give the SEC the same 
enforcement capabilities, the same subpoena capabilities that many 
other Federal enforcement agencies have in similar circumstances.
  So I appreciate the bipartisan support. I appreciate the comments.
  I reserve the balance of my time.
  Mr. KANJORSKI. Mr. Speaker, I have no further requests for time and 
yield back the balance of my time.
  Mr. CAMPBELL. I will yield back the balance of my time as well.
  The SPEAKER pro tempore (Mr. Blumenauer). The question is on the 
motion offered by the gentleman from Pennsylvania (Mr. Kanjorski) that 
the House suspend the rules and pass the bill, H.R. 2873, as amended.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

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