• 4th Year Anniversary: Madoff Victims still await Congress and the Courts
• Improved Prospects for SIPC legislation in 2013: Chairman Garrett and Co-sponsors to Reintroduce SIPC legislation beginning with December marker bill, new legislation will follow
• NIAP and Stanford Victims Coalition form Investor Protection Alliance to help press for passage of legislation
• The Courts and the SEC: US Appellate Court to take up appeal of victims’ suits against the SEC; NIAP files Amicus Brief in support
• The Courts: Victims still waiting for Rakoff to decide on claw back and other issues
Dear NIAP Member –
No one said that improving the plight of Madoff victims would be anything less than an arduous task. Like so many of you, however, I never imagined that four years later we’d still not have a favorable resolution to this mess. Then again, the many of us still committed demonstrate that we’re a hearty lot that won’t go away, and truly believe that persistence will pay off. With Chairman Garrett’s stepped up commitment to passing legislation in the next Congressional session, the strength of the new alliance between the 4000 member Stanford Victims Coalition and NIAP, and a less paralyzed Congress, Madoff victims stand our best chance yet of passing critical SIPC legislation. While it’s understandable that many of us would be frustrated and cynical at our four year anniversary, it is important for everyone to understand that our success is, in fact, attainable, that with support and funds we have a chance to dramatically improve the circumstances for Madoff victims. This is our last, best hope for SIPC relief, and I urge all of you to help support our efforts now as we prepare for the legislative push in early 2013. We can do this, but we cannot do it without the commitment and energy of the Madoff community.
Our best wishes to all for a Happy and Healthy Holiday Season and New Year.
SIPC Legislation – Improved Prospects.
Per his letter to both NIAP and the Stanford Victims Coalition in October, Congressman Garrett has reintroduced an amended version of HR757 - HR6695 as a “marker bill” in order to get new SIPC legislation on the calendar early in the next session. Cognizant of the enormous frustration and cynicism of the victims, the Congressman has pledged a stepped-up effort. With several obstacles out of the way – particularly a few Congressional members not supportive of the legislation – and with a new Congress charged by the voters with getting things done, prospects for passage of SIPC legislation have never been better for us. (If you haven’t already done so, I encourage all to read the Congressman’s letter.) The discussion draft marker bill will likely undergo further revisions prior to final submission in the next Congress.
The new Investor Protection Alliance – a partnership begun by NIAP and the Stanford Victims Coalition (SVC) – adds significant clout and makes much easier a broader geographic coalition of supportive congressional members (the Stanford fraud impacted thousands in the South, from Florida to Texas). I encourage you to go to the website – www.fixsipcnow.com for more information on this new group (and the SVC), which will be seeking to reach out to other groups to increase both our size and impact.
Upcoming in Congress
Working closely with Congressman Garrett’s office, a strategy is being formulated for moving this legislation in the new, 113th Congress. We believe chances of passage through the House Financial Services Committee and then the House itself are good, assuming NIAP is able to keep the existing lobby and media relations team in place over the coming months.
In the coming months early in the new Congress, according the Congressman’s letter to us, we expect to see hearings focused on the new legislation, the formal introduction of new legislation, and an expeditious effort to move the legislation forward for a House vote. The process will require a very aggressive effort by our committed lobby team, strategic grassroots effort by both the SVC and NIAP’s membership, and strategic use of media relations.
Two legislative issue areas remain that are very frustrating to us. First, additional tax legislation, something spearheaded by Pascrell in the House, and Schumer in the Senate, seems now a distant stretch given Congress’ focus on other major tax legislation, but we will continue to seek opportunities in this area if and when they exist. The second — SIPC relief for hedge and feeder fund indirect investors – is extremely challenging, particularly among the Republicans in the House. Ackerman, as a ranking member, made little effort to gain support for this legislation, and Perlmutter, his co-sponsor from Colorado, does not significant influence. Will we continue to raise this in our lobby discussions? Yes. But without strong advocates in the House and Senate, prospects are frankly not good. Perhaps the new Congress will provide some new opportunities in both these areas.
The Courts: The SEC, Rakoff & Lifland
As many of you may recall, the District Court ruled against the arguments of victims in the tort claim lawsuits (Phyllis Molchatsky et al) against the SEC in April, 2011. That decision is now being appealed in the US Appellate Court, 2nd District. We are pleased that Dean Larry Velvel and David Bernfeld have submitted an Amicus Brief on NIAP’s behalf which we believe makes a powerful statement for the victims’ right to sue the SEC, and that brief has been accepted by the Court. The brief is a great read, and you can access it here.
Meanwhile, victims anxiously await a host of decisions by Judge Rakoff and Lifland which deal with various clawback-related issues, and which will have significant impact on many Madoff investors. As of this writing, there is little sense as to when these decisions can be expected, but whatever the decisions, Madoff investors can most likely expect lengthy appeals and other costly legal proceedings.
Next Steps for Madoff Investor Advocates
Despite our frustration over the past year — a year characterized by Congressional paralysis — it is important to be aware that we made important headway that prepares us well for the press for legislation in 2013. This next year represents an excellent opportunity to move legislation forward, assuming we are able to keep our outstanding team of lobby, media, NIAP staff, and legal professionals in place for this next Congressional session. We owe many thanks to this group: without them the legislation would not have been written and introduced, and without this team the legislation has little or no prospect of going forward in the Congress.
Once again, we call on NIAP members, Madoff victims who are not NIAP members and others to help us raise the necessary funds now to match our efforts with Congressman Garrett’s commitment, and to help us sustain the necessary staff to improve our communications and grassroots operations. Also, in addition to asking for your financial help, in the coming months we will be calling on everyone to help us reach out to bring additional Congressional members on board.
On behalf of NIAP, our talented lobby team comprised of Jim Smith, Andy Barbour, and Mitch Delk, media professionals Michael Wichman and members of the Rasky Communications group, our legal mavens Larry Velvel and David Bernfeld, tax specialist Andrew Lerman and numerous other advisors who have worked so hard, we wish all a Happy and Healthy Holiday, and best wishes for a wonderful, and legislatively and legally successful 2013.