[Congressional Record Volume 155, Number 178 (Thursday, December 3, 2009)]
[Extensions of Remarks]
[Pages E2879-E2880]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               ENHANCED S.E.C. ENFORCEMENT AUTHORITY ACT

                                 ______
                                 

                               speech of

                        HON. SHEILA JACKSON-LEE

                                of texas

                    in the house of representatives

                      Wednesday, December 2, 2009

  Ms. JACKSON-LEE of Texas. Madam Speaker, I stand here today in 
support of H.R. 2873, the Enhanced S.E.C. Enforcement Authority Act, 
which will give the Securities and Exchange Commission, SEC, nationwide 
service of process. I support this legislation because I believe that 
it is important that the agency responsible for oversight of our 
financial system have the necessary tools for legal action against 
potential violations of the law.
  I would like to first thank my colleague, Congressman John Campbell, 
for introducing this valuable piece of legislation. On December 11, 
2008, nearly one year ago, Bernard Madoff was arrested for securities 
fraud, money laundering, and perjury in one of the largest Ponzi 
schemes in the history of this country. Estimates of the magnitude of 
the Madoff scheme were between $50 and $65 billion. The presiding judge 
in the case declared the crimes, ``extraordinary evil.'' Congress and 
the American people were appalled by this scandal. The country wondered 
how our regulatory agencies could fail to recognize fraud of this 
magnitude for so long.
  In the year since the Madoff scandal first came to light, both the 
Securities and Exchange Commission and Congress have worked to enhance 
the ability of the SEC to conduct oversight. Internal procedures have 
been reformed to make it easier for the SEC to open investigations into 
violations of securities law. New personnel at the SEC, such as the 
Director of Enforcement, have been hired to ensure that oversight 
efforts were carried out with the appropriate level of enthusiasm.

[[Page E2880]]

Congress has also worked to improve the tools of the SEC to conduct 
oversight. This bill is in line with the effort to reform the oversight 
of securities and ensure that massive fraud that was committed on the 
scale of Bernard Madoff never happens again.
  Currently, the Securities and Exchange Commission has to issue 
subpoenas in the judicial district where the trial takes place or 
within a ``100-mile bulge'' of the courthouse. This unnecessarily 
burdens the staff, which has to travel to the courts where the trial 
takes place, wasting both time and money. Furthermore, by requiring the 
SEC to seek action in remote district courts, civil cases may be 
weakened. Witnesses in cases filed by the SEC are frequently located 
outside of the trial court's subpoena range. Because witnesses who are 
not able to travel would have to provide an alternative to live 
testimony, such as a videotaped deposition or written testimony, the 
impact of their statement is lost. Additionally, securities violations 
using the internet involve persons across jurisdictions.
  H.R. 2873 will streamline the SEC's ability to investigate potential 
cases of violations of securities law. This bill will allow nationwide 
service of subpoenas in civil actions brought by the SEC in Federal 
courts. By granting the SEC this authority, this legislation will 
eliminate repetitive depositions. While the Congressional Budget Office 
has not scored this legislation, logically, this legislation will 
reduce costs for the SEC. The costs of creating and presenting 
videotaped depositions will be reduced. Additionally, SEC staff will no 
longer have to travel to file motions in remote district courts, saving 
the staff time and the taxpayer money.
  Other agencies with similar mandates have long had the authority for 
nationwide service. This body has already considered and passed this 
provision: during the 110th Congress, the House of Representatives 
passed a law of this nature in Section 19 of H.R. 6513, the Securities 
Act of 2008. Furthermore, the SEC already has this authority in 
administrative proceedings.

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