PRESSROOM:
Congress Holds Hearing on H.R. 757, Ron Stein Testifies on Behalf of Victims
MESSAGE FROM THE NIAP PRESIDENT
I recently testified on behalf of victims before the U.S. House Financial Services Subcommittee on Capital Markets and Government Sponsored Enterprises. This hearing marked an important milestone in our advocacy and policy efforts congruent to H.R. 757. Below you’ll find a brief summary on the hearing and my testimony. For a full length summary, including comments of several of the Congressmen who understand our issue and continue to support innocent victims, please click here. While this hearing was a great stride in the right direction for sound investor protection, the crucial next step is to continue to capitalize on this momentum and surge our efforts. I ask you to join us in our grassroots letter-writing campaign urging Congress to pass H.R. 757. We’ve included all the information below the hearing summary that you need to fully engage in the campaign.
Hearing Summary
If you are interested in watching the video of the full hearing, please click here to view the archived webcast on the House Financial Services Committee’s website. For a shortened clip of my testimony, please click here. We’ve included all the information below the hearing summary that you need to fully engage in the campaign.
Congressman Scott Garrett and Members of the Subcommittee Comment: Chairman of the Subcommittee, Rep. Scott Garrett (R-NJ) has been one of our continued allies on investor fraud in Washington. During the hearing, Congressman Garrett focused much of his opening statement on the wrongdoings of SIPC specifically related to the failure of the Madoff firm.He also told members of the subcommittee about the importance of H.R. 757. “This legislation would reaffirm and clarify key protections for ordinary investors that were put in place when Congress passed and amended the SIPC.” Congresswoman Carolyn Maloney (D-NY) told members and paneliststhat “markets run as much on confidence as they do on capital” and the way SIPC is treating innocent victims “is a serious blow to investors’ confidence at a critical time.”
Panelists Offer Varying Opinions: In light of the recent Stanford fraud, Senator David Vitter (R-LA) addressed the subcommittee and called attention to the need for SIPC Reform.Stephen Harbeck, President & CEO and Sharon Bowen, Acting Chairman of the Board both testified on behalf of SIPC and touted the organization as doing the ”greatest good for the greatest number consistent with the law.” Members of the subcommittee responded with numerous questions for the two panelists, but Harbeck stood behind the net equity method. Panelists Joe Borg, Director of the Alabama Securities Commission, Steven Caruso of Maddox Hargett & Caruso, P.C. and Ira Hammerman of the Securities Industry and Financial Markets Association offered varying testimonies on proposed changes to SIPC and how to properly address investor fraud.
In addition to my full written testimony (which can be found here), I addressed the subcommittee and emphasized the fact that a majority of the Madoff victims have not, and will not receive any of the SIPC advance guaranteed by Congress under SIPA statute due to the misguided and inequitable methodology adopted by SIPC and the Trustee. I explained that enactment of H.R. 757 is a crucial step in restoring sanity to the SIPA process.
There’s Never Been a More Important Time to Join Our Efforts: Now that the hearing is over, we must speak up and urge Congress to enact H.R. 757. If passed, H.R. 757 will make clear that account statements will be honored in the event of a brokerage firm failure. It will end the use of clawbacks against innocent victims, and it will end the cozy relationship between SIPC and their shortlist of trustees. We must continue to educate policymakers and the media about investor protection, but we need your help. I hope you’ve seen the email messages over the past week in regards to the launch of our grassroots letter-writing campaign. I strongly encourage you to send a letter to your federal representative today if you have not already done so. More importantly, please spread the word by forwarding this page, or posting a message to your Facebook or Twitter account asking your friends, family and colleagues to do the same… investor fraud can happen to anyone.
