Network For Investor Action & Protection

H.R. 5032 Update – 09/02/10

admin — Thu, 02 Sep 2010 12:51:43 +0000

Hi All –

Some good news. We noted in our last update that we’d requested that Congressman Kanjorski’s office demand that SIPC turn over the kinds of details that will help to “score” HR5032, a necessary procedural step regarding this legislation. We are heartened to tell you that that demand letter has been received by SIPC. This is a major success in that it may finally begin to shed light on some of the information that SIPC and the Trustee alone have been harboring, and could be an important foundation for the upcoming Kanjorski Committee hearings and the mark-up session shortly thereafter.

Further good news…. in prior emails we spoke to the issue of some of the various and obvious language flaws in the original proposed legislation — specifically, the definition of “negligent” and issues that are important to indirect investors. We also expressed great concern about fracturing the group over language issues we felt would be readily resolved during the mark-up session of the bill through amendment. That said, we have received firm confirmation from one of the bill’s primary sponsors that key changes will, in fact, be made to the current language of HR5032. One attorney most concerned over the “negligent” language issue was kind enough to assist with the language change, and we will have a number of attorneys working with us to offer final language changes as we get further down the road. In addition, please know that an advocate close to one of the bill sponsor’s office stepped up and worked hard to get this early acknowledgment to help appease those who were distrustful that these changes would be made.

These changes, among others, would most likely be offered via a “manager’s amendment,” and clarify that clawback would be limited to a professional, registered investment advisor, or those complicit in the fraud; that customers (as currently defined by SIPA) would not lose their $500,000 SIPC insurance; and that the retroactivity language in the bill is applicable to all qualifying pending SIPA liquidation cases.

As stated, we look to compile the gamut of various language and other issues to prepare for further discussion with the bill sponsors in advance of the mark-up. Therefore, if you have other issues regarding language or other “cracks” in the legislation, please bring them to our attention before taking individual action so we can resolve them more effectively. Again, we must work in a coordinated fashion, and can only go to the well so many times.

Next steps. Now that we have some assurance that those congressional staff members pressing this bill on our behalf will not unintentionally seek to undermine their constituencies whom they’re trying to help and will seek to remedy those issues, we need to turn to the important task at hand of getting Congress to support HR5032 and build support for FAS Net Equity. How? We must now redouble our grassroots lobby efforts and focus on the hearings. Once again, it is important — critical — that we not be seen as fractured, that we work smart, use our resources wisely. We cannot afford the luxury of adding further confusion to our goals. If you are considering an initiative that may even inadvertently undermine the collective efforts, please discuss your intentions with us first. Too much is at stake, and time spent undoing damage is precious time diverted from essential energies.

Once again I thank those of you who have pressed for support for the bill or in other ways supported this endeavor, and encourage all of you who wish to help to contact Ilene and DJ. If you have good presentation materials, please pass those along as well. I believe we can do this. Only by all of us working together strategically, with great lobby and pr professionals assisting, by focusing our efforts on what must be done do we maximize our chances of success.

In peace,
Ron Stein

HR5032 Update – 08/24/10

admin — Tue, 24 Aug 2010 18:24:23 +0000

Greetings. As many of you know, this has been a busy time on both the legal and legislative fronts. There has been much attention on the legal side as attorneys have filed their briefs on net equity with the US Federal Court of Appeals (NAIP has filed an amicus brief as well). The focus of this update, however, will be on the legislative front, particularly HR 5032 – the Ponzi Victims Investor Protection Act of 2010.

NIAP, its staff, board, and many devoted volunteers have been working diligently to advance our cause. We have nearly 850 individuals – mostly direct BLMIS investors (but with numerous indirects, victims from other frauds, and non-victims as well) — associated with the organization. We are very fortunate to be working with a variety of top-tier professionals to assist with our legislative lobbying, DC-based public relations, general PR, and grassroots consulting — thanks to the generosity of so many of you.

We understand the pain and frustration of many victims of this fraud, and the additional pressures of the Trustee’s behavior and perceived inactions in Congress. I would like to respectfully suggest and remind all that the more we are perceived as speaking with one voice, and certainly the less we are seen as speaking with contradictory voices, the better.

Expression of different perspectives and debate on the various sites is healthy. We have to be very cautious, however, when we are calling on others to take specific actions, for some of those actions, however well intentioned, may have the unintended consequence of working against our best interests. I suspect that much of this is due to an unfamiliarity with the sometimes frustrating legislative process, which has its own procedures. I’m not ashamed to admit that this legislative world has been an eye-opener for me as well.

Smith Free Group
The registered lobby firm — the Smith Free Group — has been actively working on our behalf since early this year. They are a well-respected and very credible firm with strong relationships on both sides of the political aisle, and have been working tremendously hard on our behalf. As of last week, they have held well over 50 face-to-face meetings with members of Congress, Senators, and staff, in addition to other communications. NIAP members and others should be pleased to know that NIAP is now well known in many Congressional offices, and as a legitimate not-for-profit organization and advocate for victims of ponzi fraud.

The SFG has helped move forward support for our shared goals in Congress, building on the momentum and work put in over the past year and a half by so many people, and are responsible in no small measure for the upcoming Kanjorski committee hearings, and certainly for the clear support that came through the Kanjorski press announcement (Click here for press release).

HR5032
This bill now has 27 sponsors – thanks in good measure to the great grassroots support many of you helped generate. To be clear, we recognize that this bill is highly flawed: it has problematic language regarding clawbacks of innocent investors (i.e. the term “negligent”), provides limited support for indirect investors, and does not at all address the final account statement determination of Net Equity (FAS-NE) for direct investors, among others.

In terms of getting the appropriate definition (FAS-NE) of net equity included, our plan as discussed and advised by NIAP’s highly experienced lobby firm and others, is to gain co-sponsorship of the existing legislation, using those meetings and relationships to educate as many legislators as possible about the key issues in the process (clawback, net equity, relief for indirects), and then build the recommended changes into the mark-up session.

The Process.

Bill is introduced by a Member of the House of Representatives and referred to the appropriate Committee.

Hearings are sometimes held and a markup session is held to make proposed changes

Committee votes on the marked up bill and (hopefully) votes it out of Committee and onto the Floor of the House for a vote.

The same process occurs on the Senate side and both sides have a “reconciliation” hearing where the two bills are merged into one, and then forwarded to the President’s desk for signature. Often bills are attached to other pieces of legislation, which may happen here.

The bill has already been introduced so the changes will take place in the mark-up process which will begin shortly after the Kanjorski hearings. The bottom line is that bills are not amended before the mark-up, meaning neither Perlmutter or Ackerman can change the language at this time. This is not our opinion; this is how the process works. Pressing that issue, however well-intentioned, may well have the unintended effect of unwittingly antagonizing those who are trying to help us.

The language issues and other cracks in the legislation (including those cracks relating to indirect investors), can be fixed in the mark-up, and shouldn’t consume the bulk of our energy. Bills are seldom far from perfect when introduced – should they make it to committee, they invariably get changed in the mark up sessions and then in the reconciliation with the Senate afterwards.

Nor can we just “start over.” To ask either of the key sponsoring Congressmen to create a new “clean bill” would be counterproductive: none of the current sponsors would write a new bill, a new bill would have no chance of being enacted in this session of Congress, and the request would likely be met with skepticism and frustration from those who are key to passage. Feeling stymied, Congress would likely do nothing.

To that end we request that victims refrain from requesting that current co-sponsors rescind support of HR5032 at this time. Actions of this nature, whether in a well-intentioned effort to gain support for net equity or other language issues (which would certainly be resolved anyway) will only place our entire effort at congressional support in jeopardy, a blow matched only by SIPC’s inhumanity. We fervently hope that the rational best intentions of the victims will win out, and not unwittingly serve to undermine us all. As I’ve said in a prior communication, if this bill after the mark-up appears to work against investors’ interests, we can take the appropriate course of action at that time.

Net Equity
NIAP has been aggressively leading the effort to include FAS-NE in the legislation — in all meetings we (and/or the lobbyists) have had with legislators regarding sponsorship of HR5032, the net equity issue is driven home along with selling the other key goals of the bill. This is hard work and is a difficult lift — as you all know, the terms “fictitious profits” and “clawback” kill us in a soundbite, but the persuasive counterarguments take paragraphs. Our ground game consists of going from Congressman to Congressman, staffperson to staffperson. And we are making good progress in gaining support for these concepts.

Scoring
As mentioned in one of my earlier communications, scoring, ie., the analysis of what a project would “cost” the American taxpayer, is a primary reason for the omission of net equity for direct investors. It is required for most legislation that might result in a cost to the taxpayer. Unfortunately, it is needed for final account statement net equity.
But we all know “the taxpayer isn’t responsible for this. SIPC members are,” Yes, that is correct, but the potential tapping into the line of credit for funds beyond the existing SIPC fund constitutes a loan by the US Government, and as such, by law, must be scored. The obstacle here: only the Trustee and SIPC know what the potential impact would be on the Treasury’s line of credit should FAS-NE be implemented for direct investors!
The Capital Markets Subcommittee (chaired by Congressman Kanjorski) has subpoena powers over the SIPC and the Trustee. NIAP has been insisting that Congressman Kanjorski direct the SIPC and the Trustee to turn over the relevant information to allow FAS-NE to be scored, and has even assisted the Committee to assemble the questions to secure this information. The good news is that this request for information is being sent out to SIPC. While some have raised concerns that this information could endanger our efforts, we and the lobby firm feel that is unlikely, and that this information, so closely guarded by SIPC and Trustee, will provide merit to our arguments. At the very least, it will allow us to get beyond this procedural impasse.

Upcoming Hearings
Congressman Kanjorski’s press announcement demonstrates considerable awareness of and sensitivity to our issues. (If you have not read the release, you may do so here; and we urge you to do so. – Click here for release.) We are providing some guidance to the Committee regarding the hearings and know that the Committee’s current position is that they’ve heard from the victims, and need to hear now from a broader range of experts, and to consider some of the bigger picture issues regarding the SIPC and SIPA system. We have some concerns here as to who they plan on hearing from. Our belief is that the Committee seeks a broader take on the failures of SIPC more generally, and improvements needed to the investor protection regime. We will certainly press for panelists who can best represent our interests. It is also our believe that Gary Ackerman’s office is seeking to use these hearings to gain input and help spur the necessary amendments to and passage of HR5032.

Congressional briefing session
We will be holding a briefing session for Members of the Committee and their key staffers just prior to the hearings. In that session we will be presenting briefing documents, questions to ask the hearing panelists, and other materials. Again, we are working closely with the lobby firm, PR and other experts to assist with this. We are also planning extensive separate meetings with key members and staff before, and again, as follow-up.
Many of you have taken the lead in creating some very valuable documents that speak with the victims’ voice, and we would request your assistance by forwarding to us the materials you may have. NIAP has also purchased 50 copies of “The Club No One Wanted to Join,” compiled by fellow victim Alexandra Roth, for distribution to the Committee.

It’s essential at this point that we keep our message clear and speak with one voice as much as possible. It will help the cause if we leverage NIAP’s significant size, credibility, and very positive relationship with key staff members of Paul Kanjorski’s and Barney Frank’s offices among others. It is very important that the group’s message not be diluted. Of great concern is confusion created by dissent within the ranks of the direct investors – confusion that has already been expressed by Members of Congress and their staffs. It’s not that we don’t encourage different thoughts and opinions — we simply request that you discuss them with us and steer them through NIAP. It is critical at this point that we avoid giving the impression that the victims do no have their act together. This is critical up to and during the briefing session and hearings. Again, if you have something that could be beneficial to this effort, please bring this forward to us.

Indirect Investors
We have supported and will continue to support relief for indirect investors. HR5032 was introduced by one of Congress’ most effective young legislators, Congressman Ed Perlmutter. Perlmutter is very astute, is working very closely with a large contingent of indirect investors, and is central to the cause. He understands the problems with this legislation from an indirect investor’s perspective, and we hope the appropriate modifications will be added by Mr. Perlmutter. While we will raise the indirects’ concerns to Congressman Perlmutter and will remain in close touch with his office, we will also take guidance from his office in terms of what is realistic, and help take that direction to other Congressional members. Given our limited capacity, the bulk of NIAPs energies on this particular piece of legislation needs to be focused on FAS-NE and clawback issues. Our support for relief for indirects will continue, but we cannot see ourselves attempting to sell other congressional members on benefits that Congressman Perlmutter will not support. It is therefore important for indirect investors – including those affiliated with NIAP — to continue to work closely with him.

Grassroots
Moving forward we will need a strong, organized, focused and sustainable grassroots effort. The Stop Clawback Now! campaign (which includes Stop Cash-In/Cash-Out) is part of that effort. Over the coming weeks, we are going to call on you to step up with a letter writing campaign to help expedite and guide the legislation, and make sure the Committee stays on track. Your hundreds of letters have already had great impact.
In the interim, we cannot and will not discourage others from sending personal stories and other letters or materials to the Kanjorski Committee. We ask you to please be respectful and clear if you do so. More importantly, we strongly encourage you to work closely with NIAPs outreach coordinators, Ilene Kent and DJ Mionis, to maximize impact. This effort is not about building visibility for NIAP – in fact we encourage those who write letters not to mention NIAP – but to leverage our grassroots infrastructure for maximum impact.

I’ll report more in the coming weeks: there’s plenty more to talk about, including all the work being done on the tax side. In the interim, we ask you to support NIAP’s efforts (and your interests) and respectfully request that you coordinate actions with NIAP as much as you can. I also thank those who have been so generous with their time and energy thus far, as well as those who have been keeping the various sites going. Feel free to contact us with questions, and we’ll do the best we can to respond in a timely fashion.
Please also visit the NIAP website at: www.investoraction.org for more information.

Keep the faith!

Most sincerely,

Ron Stein

Brief Filings – Update

admin — Mon, 23 Aug 2010 15:02:12 +0000

Several briefs have been filed over the past two weeks on net equity appeal and customer motion. We have made available many of these briefs on the www.madoff-help.com website under Court Filings (see Net Equity and Customer Motion Section). Click here to visit website and access briefs.

www.madoff-help.com in collaboration with NIAP – Network for Investor Action & Protection is forging ahead with a legislative agenda to address SIPA and IRC relief for fraud victims. Click here to Donate now.
Not a NIAP member? Click here to register (Membership is free).

Sourced from: Madoff Help News & Assistance

Court of Appeals Accepts NIAP Amicus Brief

admin — Thu, 19 Aug 2010 13:32:00 +0000

Yesterday, the 2nd Circuit Court of Appeals grants NIAP’s motion to file an amicus brief in support of appellants.
Click here for court order of acceptance.
Click here for NIAP’s Brief.

Sourced from: Madoff Help News & Assistance

Madoff Victims Seek Further Changes In Wall Street Reform

admin — Tue, 17 Aug 2010 13:16:53 +0000

On the heels of the passage in Congress of the sprawling Wall Street Reform and Consumer Protection Act, lawmakers backed by victims of the Madoff Ponzi scheme are seeking additional changes that will protect small investors wiped out when investment houses go belly up. Read full excerpt in The Washington Bulletin here.

NIAP Files Amicus Brief In Support of Net Equity Appeal

admin — Fri, 13 Aug 2010 19:07:43 +0000

Network for Investor Action and Protect today has filed an Amicus Brief with the US Court of Appeals for the Second Circuit in support of appellants and supporting reversal of Net Equity ruling. The background and context of this case, both over the decades and recently, supports the Appellants’ claim that the decision should be reversed. Click here to read full brief.

H.R. 5032 Co-sponsors – Latest Update

admin — Thu, 12 Aug 2010 10:15:02 +0000

Jackie Speier [D-CA12]

James Himes [D-CT4]
Ed Perlmutter [D-CO7]

Ileana Ros-Lehtinen [R-FL18]
Ted Deutch [D-FL19]
Ron Klein [D-FL22]
Alcee Hastings [D-FL23]

Bennie Thompson [D-MS2]

Carol Shea-Porter [D-NH1]
Paul Hodes[D-NH2]

Steven Rothman [D-NJ9]

Timothy Bishop [D-NY1]
Steve Israel [D-NY2]
Peter King [R-NY3]
Carolyn McCarthy [D-NY4]
Joseph Crowley [D-NY7]
Michael McMahon [D-NY13]
Nita Lowey[D-NY18]
John Hall [D-NY19]
Daniel Maffei [D-NY25]
Carolyn Maloney [D-NY14]
Anthony Weiner [D-NY9]

Steve Cohen [D-TN9]

Al Green [D-TX9]

Glenn Nye [D-VA2]

NIAP Statement on Planned Sept. Hearing

admin — Mon, 02 Aug 2010 16:55:14 +0000

8/2/10

Network for Investor Action and Protection Media Statement

Following is a press statement from Ron Stein, President of the Network for Investor Action and Protection, on the planned September House Financial Services Committee hearings to assess the limitations of the Securities Investor Protection Act:

“The Network for Investor Action and Protection strongly commends Congressmen Paul Kanjorski (D-PA) and Gary Ackerman (D-NY) for taking on the vital issue of the effectiveness of the Securities Investor Protection Act and for their continuing leadership in fighting for better investor protections. We hope that these hearings will lead to Congress taking action to better protect investors by modernizing the SIPA laws and reforming the Securities Investor Protection Corp.

“The Madoff and Stanford frauds, among many others, highlight this need for more effective regulation and investor protection, and we look forward to Congress overseeing longer term efforts to ensure that our investor protection regime lives up to the promise of the SIPA.

“In the near term, we hope that Congress will act expeditiously to enact H.R. 5032 offered by Congressmen Ackerman and King (R-NY) to ensure that those who lost their life’s savings in recent Ponzi schemes aren’t victimized a second time through clawback actions, and that all investors can be certain that their brokerage statements are an accurate reflection of their investments over the years.”

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Kanjorski Announces September Hearing to Assess Limitations of the Securities Investor Protection Act

admin — Mon, 02 Aug 2010 15:00:06 +0000

Congressman Paul E. Kanjorski (D-PA), the Chairman of the House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises, announced today that he will convene a September hearing to assess the limitations of the Securities Investor Protection Act (SIPA), a law that works to return money and securities to the customers of failed brokerages. The hearing comes at the request of Congressman Gary L. Ackerman (D-NY), the Vice Chairman of the Capital Markets Subcommittee, and builds on legislation recently enacted into law. This Capital Markets Subcommittee hearing will be the second in the 111th Congress on SIPA.
Click here for full Press Release.

Sourced from: Madoff Help News & Assistance

Current Legislation News

admin — Thu, 29 Jul 2010 13:03:43 +0000

Lastest Update: July 29, 2010
- H.R. 5058 – Ponzi Scheme Victims’ Tax Relief Act of 2010 – Receives three new co-sponsors – Rep. Miller [D-NC13], Rep. Myrick [R-NC9], and Rep. Berkley [D-NV1]
MORE INFORMATION AND LINKS TO THIS AND OTHER PENDING BILLS OF IMPORTANCE CAN BE FOUND BY CLICKING HERE

Sourced from: Madoff Help News & Assistance