Dear Friends –
In the hope that this finds you well, I present this update, focused on the legislative front. With Congress just back from its Easter break, and after months of wrangling over budget issues, we’re cautiously optimistic that it will begin to take up some of key SIPC and tax issues in earnest. We’re particularly energized by Congressman Garrett’s involvement as Chair of the House Subcommittee on Capital Markets.
Congress, SIPC, SEC and HR 757 (The Equitable Treatment of Investors Act)
Now that Congress is moving past the all-consuming budget, Chairman Garrett and the House Subcommittee on Capital Markets can turn their attention to legislation. The Chairman will be increasing his efforts to encourage support for this legislation from his House colleagues, we are currently working with his office on an op-ed placement in a major DC publication as well as “Dear Colleague” letters to his fellow Representatives. We can expect an increase in co-sponsorships to follow these efforts. Hearings on HR 757 are likely to take place sometime before the July 4 break. Our collective grassroots letter writing campaign, which has generated well over 500 letters to Congress, combined with other efforts (including petitions and phone calls), will undoubtedly contribute to the success of this process and we believe that the combination of grassroots letters and your lobby firms’ efforts should bear fruit. It still remains a mystery as to why Congressman Ackerman has thus far been unwilling to step up on the Democratic side, but others will.
Concurrent with Chairman Garrett’s pursuit of this legislation, the House continues its aggressive pursuit of the SEC. After an Inspector General report which criticized the SEC on a host of funding issues, hearings into the SEC by Congressman Darrell Issa, and subsequent inquiry into the Stanford debacle, Congressional interest has been piqued, along with increased media attention (Washington Post, New York Times, among others). We should expect increased Congressional – and media — focus on SEC failures, particularly given the SEC’s desperate need for Congressional funding.
Action Item for Madoff Victims: Continued letter writing. With a new goal of 1000 letters tied to upcoming hearings and a press for co-sponsors, we need to continue to generate letters to House members. Letters should come not just from not just from victims, but from friends, family, and all investors. Remember, the focus must not be on Madoff victims, but ALL investors who could be harmed as protections are denied by SIPC and the Trustee’s actions. Templates for all letters are on the NIAP website – www.investoraction.org
Tax Legislation.
As promised, Congressman Pascrell (D-NJ), joined by Congressman Boustany (R-LA) has reintroduced his tax legislation, now HR1635 – Ponzi Scheme Victims Tax Relief Act of 2011 — a reprise of HR5058 introduced last year. This bill extends the theft loss carryback to a full ten years plus a partial deduction for losses in IRAs. While we don’t expect much action on this bill until later in the year, our goal is to bring the sponsor level up to 100, and working with the Stanford victims, we think this a realistic goal. We know there is still much to be done with this bill, including providing for self-funded and other retirement vehicles.
We encourage investors to write their Congressman requesting support of this legislation, as well as HR757. NIAP has just written all House members who co-sponsored any of the prior tax or SIPC legislation to now co-sponsor both HR 757 and HR1635.
We are waiting for Senator Schumer to likewise take the lead in the Senate on similar legislation. As you may recall, Senator Schumer had proposed S3166 last year, with strong bipartisan support. We are hoping he will do the same this year, and are working with his office to do so. CPA Andrew Lerman continues to work closely with both Congressman Pascrell’s and Senator Schumer’s offices on this effort.
Indirect Investors. While the proposed tax legislation is of equal benefit to all victims of Ponzi fraud, the road to SIPC relief for indirect victims continues to be a challenging one. Even while we continue to press forward, it is felt that moving the Garrett legislation forward provides an important stepping stone, although the legislation does not directly benefit the indirect investor. We continue to stress that a focused effort to engage legislators in high indirect victim areas keeps the pressure on for relief and expands the support base beyond Congressman Perlmutter. We suspect the SIPC Modernization Task Force will address this issue in their report, but sustaining contact is also encouraged.
Media relations
With the stories attacking the SEC, SIPC and Trustee’s fees, the media is turning an increasingly more skeptical eye on these entities. Our two media firms – the Hamilton Group in NY, and Rasky Baerlein in DC — continue to build strong relationships, and look to seize on “milestones” that would make for media-worthy stories, particularly around the actions of the Garrett Subcommittee. While our background has helped generate stories in the Washington Post and Daily News, we’re expecting more media attention, particularly as Congressional hearings get underway.
Critically, our messaging is expanded from Madoff investors to all investors – that “This could happened to you.” A new legislative “microsite” (website) is under development for expanded digital and legislative outreach to all investors. NIAP is also providing social media training for volunteers. If you would like to help, please contact DJ at admin@investoraction.org. We have recorded the training (with an accomplished social mediate professional) so you can catch up on your own if necessary.
Wall Street Journal Editorial – Madoff and the Mets. While it’s not often that we find ourselves in sync with the editorial board of the Wall Street Journal, the May 11th editorial [click here] paints the most damning picture of the Trustee’s actions so far reflected by the major print media. In their dealings with the Met owners, the editorial charges Picard and his firm with creating a series of distortions intended to mislead the press and public, essentially fabricating information ostensibly provided by a former associated hedge fund associated with the Mets’ owners, and “treating victims as accomplices without unequivocal evidence or due process.” Although most innocent victims of this fraud may ordinarily see little in common between themselves and the Met owners, the obnoxious and callous behavior of the Trustee seems to spare no one. This editorial represents an important departure from the timid treatment the press has thus far given the Trustee, and perhaps marks an important media turning point with respect to all victims and investors.
We continue to need victims’ stories. The individual tragic stories are our most potent weapon to make change in the media and Congress. We understand the challenges of being exposed to print or media, but the media needs to put a face on this tragedy. There is no risk to the victim (there is no chance of retribution by the Trustee), and we carefully coach the reporters and they understand that these stories are not meant to be just a human interest story but a cautionary tale for all investors.
If you have a story that could help add power to our media message, please consider allowing us to connect you with key media. You will not be facing these reporters alone. One of our expert and professional Media team will prep and train you and will be on the phone during the interview process. Without these stories in the media and to Congress, it is that much harder to drive our message home. They need to understand that the actions – or inactions – have very real human consequences. The microsite will also include a “Victim Story” section and will included videos, as well as copies of victim letters. There is an opportunity to tell your story anonymously as well. Please contact Ilene at ilenek@investoraction.org if you think you can help.
Upcoming SIPC Modernization Task Force on June 1
For nearly two years, victims have been looking for an opportunity to speak out regarding SIPC and its draconian policies of protecting Wall Street over Main Street and not providing SIPC protection for all investors, including indirect investors. While we have been working closely with key decision-makers behind the scenes to facilitate SIPC reform, victims now have a chance to be heard directly by the SIPC Modernization Task Force, which will be holding a public hearing at the Grand Hyatt Hotel here in New York City on Wednesday, June 1. You can reserve a spot in the room and register to speak either online at www.SIPCModernization.org or by phone at 1-877-772-1510. You can find more information here: www.investoraction.org.
This is a very good opportunity for indirect investors to gain a strong foothold in the Task Force’s expected recommendations. A large turnout by indirect investors, therefore, could be very helpful in driving a key message home. In the meantime, we will keep investors posted on details and prospective talking points.
Action Needed Now: Media. Letters. Once again, it’s time to kick the letter writing “grassroots” and “grasstops” effort into higher gear. If you haven’t written your Congressional letter yet, please commit to sending yours and then having at least two additional letters sent by friends and family. There is a special “friends and family” template at www.investoraction.org. As part of the “grasstops” campaign — If you have personal relationships with Congressional members or key staff, please contact them, set up meetings, and let us know so we can follow up.
Right now there is nothing you can do to help that is more important than moving HR757! A series of letters should go out now, another after Congressman Garrett sends out his “Dear Colleague” letters, and again during the hearings.
If you have any further questions, please contact us as shown below.
In Peace,
Ron Stein
Disclaimer: NIAP does not provide legal or tax advice, and cannot be held liable for information contained herein. If you have any questions concerning legal issues or related issues, please review these with your legal and/or tax advisor.
