[Congressional Record Volume 167, Number 107 (Monday, June 21, 2021)]
[Senate]
[Pages S4657-S4658]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTION

      By Mr. REED:
  S. 2145. A bill to ensure that irresponsible corporate executives, 
rather than shareholders, pay fines and penalties; to the Committee on 
Banking, Housing, and Urban Affairs.
  Mr. REED. Mr. President, today I am reintroducing the Corporate 
Management Accountability Act, which asks each publicly traded company 
to disclose its policies on whether senior executives or shareholders 
bear the costs of paying the company's fines and penalties.
  In 2014, William Dudley, then the President of the Federal Reserve 
Bank of New York, gave a speech titled ``Enhancing Financial Stability 
by Improving Culture in the Financial Services Industry.'' In this 
speech, President Dudley said, ``in recent years, there have been 
ongoing occurrences of serious professional misbehavior, ethical lapses 
and compliance failures at financial institutions. This has resulted in 
a long list of large fines and penalties and to a lesser degree than I 
would have desired employee dismissals and punishment . . . The pattern 
of bad behavior did not end with the financial crisis, but continued 
despite the considerable public sector intervention that was necessary 
to stabilize the financial system. As a consequence, the financial 
industry has largely lost the public trust.''
  Since 2009, banks around the world have paid $394 billion in 
penalties, according to the Boston Consulting Group (BCG). This is an 
increase of $22 billion from the last time I introduced this 
legislation. It has been evident that simply fining and penalizing 
financial institutions at the corporate level is not enough to deter 
bad actors. Senior executives, many of whom are all too eager to take 
credit for a company's good news, must also take more responsibility 
for the bad news, especially if it is true that the buck stops with 
them.
  According to Professor Peter J. Henning, who also writes the White 
Collar Watch column for the New York Times, ``a problem in holding 
individuals accountable for misconduct in an organization is the 
disconnect between the actual decisions and those charged with 
overseeing the company, so that executives and corporate boards usually 
plead ignorance about an issue until it is too late.''
  The Corporate Management Accountability Act I am reintroducing today 
is one attempt at helping to solve this problem. The bill simply asks 
publicly traded companies to disclose whether they expect senior 
executives or shareholders to pay the cost of corporate fines or 
penalties. This proposal has been supported by University of Minnesota 
Law School Professors Claire Hill and Richard Painter, who also served 
as President George W. Bush's chief ethics lawyer, as well as Americans 
for Financial Reform.
  I urge all my colleagues to join this legislative effort to hold 
senior executives accountable for their actions.
                                 ______
                                 
      By Ms. COLLINS (for herself and Mrs. Shaheen):
  S. 2146. A bill to establish within the Office of the Secretary of 
Health and Human Services a special task force on ensuring Medicare 
beneficiary access to innovative diabetes technologies and services; to 
the Committee on Finance.
  Mr. REED. Mr. President, today I am reintroducing the Stronger 
Enforcement of Civil Penalties Act along with Senator Grassley and 
Senator Leahy. This bill will help securities regulators better protect 
investors and demand greater accountability from market players. Even 
in the midst of an unprecedented public health and economic emergency, 
we continue to see calculated wrongdoing by some on Wall Street, and 
without the consequence of meaningful penalties to serve as an 
effective deterrent, I worry this disturbing culture of misconduct will 
persist.
  The amount of penalties the Securities and Exchange Commission (SEC) 
can fine an institution or individual is restricted by statute. During 
hearings I held in 2011 as Chairman of the Banking Committee's 
Securities, Insurance, and Investment Subcommittee, I learned how this 
limitation significantly interferes with the SEC's ability to execute 
its enforcement duties. At that time, a Federal judge had criticized 
the SEC for not obtaining a larger settlement against Citigroup, a 
major actor in the financial crisis that settled with the agency in an 
amount that was far below the cost the bank had inflicted on investors. 
The SEC indicated that a statutory prohibition against levying a larger 
penalty led to the low settlement amount. Indeed, then SEC Chairman 
Mary L. Schapiro in 2011 also explained that ``the Commission's 
statutory authority to obtain civil monetary penalties with appropriate 
deterrent effect is limited in many circumstances.''
  The bipartisan bill we are reintroducing aims to update the SEC's 
outdated civil penalties statutes. This bill strives to make potential 
and current offenders think twice before engaging in misconduct by 
raising the maximum statutory civil monetary penalties, directly 
linking the size of the penalties to the amount of losses suffered by 
victims of a violation, and substantially increasing the financial 
stakes for serial offenders of our nation's securities laws.
  Specifically, our bill would broaden the SEC's options to tailor 
penalties to the particular circumstances of a given violation. In 
addition to raising the per violation caps for severe, or ``third 
tier,'' violations to $1 million per offense for individuals and $10 
million per offense for entities, the legislation would also give the 
SEC more options to collect greater penalties based on the ill-gotten 
gains of the violator or on the financial harm to investors.
  Our bill also seeks to deter repeat offenders on Wall Street through 
two provisions. The first would authorize the SEC to triple the penalty 
cap applicable to recidivists who have been held either criminally or 
civilly liable for securities fraud within the previous five years. The 
second would allow the SEC to seek a civil penalty against those who 
violate existing federal court or SEC orders, an approach that would be 
more efficient, effective, and flexible than the current civil contempt 
remedy. These updates would greatly enhance the SEC's ability to levy 
robust penalties against repeat offenders.
  According to the SEC's FY 2022 Congressional Budget Justification, 
``the SEC is responsible for reviewing the disclosures and financial 
statements of more than 7,400 reporting companies.'' The SEC further 
notes that a ``record 67 million U.S. families held direct and indirect 
stock holdings in 2019, up 13 percent from 2010,'' and the agency is 
``charged with overseeing approximately $100 trillion in annual 
securities trading on U.S. equity markets and the activities of more 
than 28,000 registered entities.'' All of our constituents deserve a 
strong regulator that has the necessary tools to go after fraudsters 
and pursue the difficult cases arising from our increasingly complex 
financial markets. The Stronger Enforcement of Civil Penalties Act will 
enhance the SEC's ability to demand meaningful accountability from Wall 
Street, which in turn will increase transparency and confidence in our 
financial system. I urge our colleagues to support this important 
bipartisan legislation.
                                 ______
                                 
      By Mr. REED (for himself, Mr. Grassley, and Mr. Leahy):
  S. 2147. A bill to enhance civil penalties under the Federal 
securities laws, and for other purposes; to the Committee on Banking, 
Housing, and Urban Affairs.
  Mrs. SHAHEEN. Mr President, I come to the floor today to join my 
colleague Senator Collins from Maine, who will be here shortly, who is 
also my cochair of the Diabetes Caucus, to reintroduce the Improving 
Medicare Beneficiary Access to Innovative Diabetes Technologies Act. 
This is legislation that would establish a task force to provide 
recommendations to help

[[Page S4658]]

guide Medicare's decisions on coverage and payment for new technologies 
to improve the lives of people with diabetes.
  I have had the opportunity to see the challenges that families with 
members who have type 1 diabetes face. My granddaughter, my oldest 
granddaughter, has type 1 diabetes, and I know the challenges her 
family faces navigating a complex web of insurance coverage rules for 
technologies. Anytime a new technology comes out that would benefit 
her, to get the insurance companies to adopt those technologies is a 
huge challenge, and it requires hours of phone time with the insurance 
company, trying to persuade them that they should provide the coverage.
  Well, we know that these insurance companies often base their 
coverage and reimbursement rules on Medicare. That is why it is so 
important for the Medicare Program to keep pace with the development of 
new diabetes technologies and devices.
  I appreciate the opportunity to work with Senator Collins on a 
regular basis in the Diabetes Caucus. In 2017, we were successful in 
pressing Medicare to cover continuous glucose monitors, something that 
seems like an obvious choice given the difference that those CGMs can 
make for people who have diabetes and ensuring that their blood sugar 
stays stable. We have also worked together to ensure that Medicare 
provides flexibility so that patients can use smartphone apps with 
their continuous glucose monitors.
  In the years to come, we need Medicare to make progress toward 
covering the artificial pancreas, a landmark development that will be 
the most significant change for people with diabetes since insulin was 
discovered, but to do this, we shouldn't have to resign ourselves to 
this piecemeal approach to Medicare coverage that requires continual 
pressure from Congress and advocates.
  We need an independent body, like the one that is identified in our 
legislation, to help provide recommendations to Medicare so that its 
coverage of new technologies can adapt more quickly as innovation 
advances. That is why I am proud to be here on the floor and proud to 
join Senator Collins in reintroducing this bill. I hope my colleagues 
will take a look at it, decide that it merits passage, and work with us 
to get that done.
  My colleague has arrived on the floor.
  Senator Collins, I was just saying that I was very proud to be able 
to join you in reintroducing this legislation, and hopefully this 
session, we will be able to get it done. Thank you for your leadership, 
and I look forward to hearing your comments and to working to get this 
passed.
  The PRESIDING OFFICER. The Senator from Maine.
  Ms. COLLINS. Mr. President, first, let me thank my colleague from New 
Hampshire, Senator Shaheen, for her extraordinary commitment and 
leadership as my fellow cochair of the Senate Diabetes Caucus. We are 
introducing a bill to improve access to innovative diabetes 
technologies for our seniors and other Medicare beneficiaries. Our bill 
would create a special task force at the Department of Health and Human 
Services to examine and resolve barriers that seniors face in accessing 
the latest diabetes management technologies.
  New diabetes technologies, such as the artificial pancreas and 
implantable continuous glucose monitoring systems, allow those who are 
living with diabetes to better manage their glycemic levels, assess 
needed therapy on a timely basis, and adhere better to treatment 
regimes. These technological advances make diabetes easier to manage 
and therefore improve the health of people with diabetes.
  The market arrival of cutting-edge diabetes technologies is something 
we all celebrate; however, oftentimes we are finding that patients do 
not realize the full benefits because many of our Nation's seniors find 
the new technologies to be difficult or impossible for them to afford.
  I have heard from numerous seniors who, when transitioning from 
employer-provided insurance to Medicare, were shocked to learn that the 
technologies they had relied upon for years to manage their diabetes 
are no longer covered because they now have lost their employer-
provided insurance, which did cover these technologies, and instead are 
being covered by Medicare. For example, one Mainer unfortunately had to 
face the reality that Medicare's coverage denial of a particular sensor 
that he needed for his insulin pump meant paying up to $8,000 out-of-
pocket each year if he wants to continue with his current treatment. He 
wrote:

       Because I am now 65, I am denied care that was available 
     when I was 64.

  He continued:

       This approach not only puts me at risk but is quite likely 
     not cost effective. While the sensors are expensive, the cost 
     of ambulance calls and hospitalizations . . . is certainly 
     more.

  I could not say it better. It makes no sense for this individual, who 
has aged into the Medicare system, to lose coverage that he had and 
relied upon and used successfully to control his diabetes.
  To better support the adoption of these technologies, our bill would 
require HHS to create a special task force on coverage and payment for 
innovative diabetes technologies that would bring all stakeholders--
from patients to device manufacturers, to government officials and 
healthcare professionals who are making coverage decisions--to the 
table. The task force would identify and plan for changes in Medicare 
coverage and payment policies to ensure that Medicare beneficiaries 
have access to the latest treatments, to the innovations that are 
currently available, as well as those that are in the pipeline. The 
task force would also be tasked with developing strategies for 
supporting adoption of these technologies.
  This effort builds on our past advocacy to improve the day-to-day 
life of individuals with diabetes. In January 2017, in response to the 
bipartisan effort that Senator Shaheen and I have led, CMS first 
approved the use of continuous glucose monitors. We also successfully 
urged CMS last year to support the use of smartphone apps in 
conjunction with continuous glucose monitors. These are proven 
lifesaving devices that are relied upon by people with diabetes to 
provide them with realtime measurements of their glucose levels. This 
information is key to preventing costly--sometimes deadly--diabetes 
complications.
  While I am pleased that our advocacy has helped spur these policy 
changes, I remain frustrated that too often Medicare lags behind 
commercial insurers. Greater adoption of these new diabetes techniques 
can help address the explosive growth in the financial and human toll 
of diabetes. Diabetes accounts for an extraordinary one-in-three 
dollars in Medicare spending. It is paramount that we encourage HHS to 
adopt a more cost-effective and compassionate approach to treating this 
chronic disease that affects more than 30 million Americans.
  The Improving Medicare Beneficiary Access to Innovative Diabetes 
Technologies Act encourages a proactive approach to diabetes coverage 
and payment. I encourage my colleagues to support our efforts.
  Again, thanks to my partner Senator Shaheen for her leadership in 
this area.

                          ____________________