Even after a briefing session for Congressional staff and the September 23 hearings that put a spotlight on SIPC’s behavior, the clock is ticking and Madoff victims are running out of time to get some form of legislation passed prior to the end of this Congressional session. So here is another call to action — if you’ve already written letters, we ask you to do so again. If you haven’t written one before, now is the time.

Precisely at the time that victims are preparing for the first salvo of clawback letters from the Trustee, Congress members are focused on their re-election, with many in danger of losing their seats. It seems painfully ironic that we are looking to Congress for assistance just when they’re most preoccupied, and with the screws being tightened on victims by the Trustee.

That means we have to be especially visible to cut through the fog and step up the pressure to get legislation passed. What we need to do is press for a mark-up of the one SIPC bill that is in play – HR 5032. As noted in a prior update, we’ve already received support for language that would get around the issue of “negligent.” At the very least, we are looking during the markup session to include final account statement net equity and seek to fix some of the language regarding the indirects. The lobby firm has had good success in meetings establishing both the validity of preventing clawback of innocent investors and utilizing final account statements.

Your lobby firm – the Smith Free Group – has been working overtime (and now pro bono!) on our behalf, and has done a tremendous job. Now they need us to pull our weight on the grassroots side so they can half maximum impact.

The bottom line is this: we must press for support, en masse for a modified HR5032, or we will lose Congressional attention, let alone relief, in this session. We can’t dicker over this language or that. We all know that HR5032 is flawed, but language issues will be resolved during markup… IF we get to markup.

I am asking, therefore, that everyone join in to support HR5032 with the necessary changes to the definition of net equity, end clawbacks of the innocent, and provide relief for indirects.

To help assist you to make your voice heard, there is a template letter along with instructions – CLICK HERE. Please use it as your guide. There are a number of paragraphs that are necessary, though you are encouraged to use your own language as much as possible. While you will be asked to write only one letter for this bill to be sent to your local Congressman, you will also asked to send 5 fax or mailed copies: to Congressman Scott Garrett, Paul Kanjorski (Subcommittee on Capital Markets), Barney Frank and Spencer Bachus (House Finance). Most importantly, please fax or email a copy to NIAP for our lobby firm, who will use those copies as they meet with Congressional members. Again, the complete instructions can be found by clicking here.
We will be asking folks to follow up with phone calls right after the elections as well. By the way – if you have a close connection with a congressman, please contact them directly.

We have heard from some of you concerned that the issues of the indirect investors have not been at the forefront. We know that your loss was just as extensive as those directly invested. Despite the title of the legislation, the prospective costs and retroactive definition of “customer” remain a source of concern for Congress. We emphatically continue to support relief for indirects, but need to be careful in how we navigate these waters. (Unfortunately, Congressman Perlmutter, like many, is preoccupied with reelection, and will need to be pressured immediately after the election.)

The pressure we exert now will help us continue to deliver the necessary message and, should legislation not make it through this session, may put us in a viable position as we begin 2011 with the new Congress, and with solid connections to both sides of the political aisle, In the coming days, we will also embark on a campaign to move forward the tax legislation (HR 5058, sponsored by Cong. Pascrell and S. 3166, sponsored by Sen. Schumer). Please also know that PR work is being targeted to the DC trades (i.e. Politico, Roll Call, etc) to continue to exert pressure for Congressional action.

Frankly, Madoff victims need to marshal our own overwhelming campaign. But we MUST NOT destroy our prospects by undermining each other, or staking out positions that are impractical, or appear overly demanding or disrespectful. Keep it simple. Be only specific about the impacts on your life. Those are the most powerful messages. If each of us sends a letter, if each asks three family members to do the same, we’ll make a tremendous impact at an important time.

Thank you for all your hard effort and support. I would like everyone to know how very proud of I am of how hard, Ilene, DJ, our volunteers and board have worked and continue to work on your behalf.

In Peace,

Ron Stein


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