SPOTLIGHT ON LEGISLATION:
MESSAGE FROM THE NIAP PRESIDENT
Dear NIAP Member,
Greetings. We shortly expect SIPC action to begin in Congress. Certainly many victims have heard this sort of thing before, and Congress and uncertainty seem to go hand in hand, but the key elements are now in place for legislation to begin its march. With the House Financial Services Committee currently absorbed with the introduction and markup of its priority legislation to overhaul Fannie Mae (the huge PATH act), we anticipate that Congressman Garrett will introduce legislation in September. As you know, we and our Stanford victim partners (the SVC) have been working hard behind the scenes with an outstanding DC Team which is now helping guide our grassroots planning. While many of you have volunteered to help – something truly appreciated — it will be important for all of us to step up in whatever way we can and work together to build support in Congress. Specific grassroots strategy and steps will be communicated over the next few weeks. In the coming months, I’m confident that we will work together, support NIAP’s and the SVC’s efforts, and make important headway in getting the protections that we, and all investors, deserve. Thank you again for your patience, commitment and coming support.
It is expected that the new SIPC legislation will be introduced in September, shortly after the return of Congress from its Summer Recess and assuming the Financial Services Committee has completed its markup of current major FNMA PATH Act legislation – a top priority for the House Financial Services Committee. (We had hoped that the legislation would be introduced in July, but the introduction and markup of the complex PATH legislation is taking longer than originally expected.) It is clear that the new legislation will receive significant attention in the House Capital Markets Subcommittee, the Financial Services Committee and in the House. Meetings with Congressional members who have Madoff or Stanford victims in their districts continue very positively, and our new relationship with the Stanford Victims Coalition (SVC) continues to go extremely well. As stated in prior updates, the SVC brings a considerable amount of support in the House and Senate, and makes our effort one of national, not just regional, importance. We are very pleased that Angie Shaw Kogutt, SVC’s Director, has been such an impressive and effective advocate in our Congressional meetings.
The SIPC legislation to be proposed by Chairman Garrett addresses several issues critical to Madoff and Stanford victims. Moreover, it is a bill that all direct Madoff investors can support, and should have no negative impact on the vast majority of regular (non-institutional) Madoff net losers.
• It prevents the clawback of innocent investors
• It mandates that SIPC coverage up to $500,000 be based on final account statements
• It insists that the Trustee NOT be SIPC appointed, but selected from a panel of SEC approved trustees
• It gives the SEC plenary authority over SIPC (a central issue to Stanford victims).
As many of you know, Congressman Scott Garrett – who has been working closely with our Team for some time — introduced SIPC legislation in the last, 112th, Congressional session. The bill, HR757, was scheduled for a markup session in August 2012, but was pulled due to a number of factors. Even had the bill gone through markup, due to resistance from Congressman Gary Ackerman, insufficient time before the markup to build broad national support, and the very short amount of time remaining in the session, our Team and Chairman Garrett chose to pull the legislation and focus on passage in this, the 113th session. HR6695, similar to HR757, was then introduced at the end of the session in December strictly as a “marker” for the 113th Congress and a statement of the Congressman’s strong support.
While legislation has not yet been introduced by Congressman Garrett to the new Congress, the new bill is expected to be introduced with some modifications shortly after the Summer Recess. Hearings and a markup are expected to follow, along with the building of support in the Senate for similar legislation.
It is important to keep in mind that passage of this legislation, certainly a big challenge, is still just the first phase in meeting the goals of both NIAP and SVC to dramatically improve protections for all investors. Improving protections and relief for indirect investors, overhauling SIPC and FINRA, and creating an ongoing system of accountability are just a few of the others. Taking direction from Congressman Garrett’s office and other Congressional members, however, this legislation is seen as the critical and doable first step.
Getting Started with the Grassroots Effort.
Our immediate goal is to build sponsorship of the bill upon introduction and immediately thereafter, and our initial grassroots effort – mostly letter-writing — will be focusing on House Financial Services Committee members along with other House members with large victim numbers in their districts. The Stanford Victims will be doing likewise. We will be coordinating our letter-writing with the DC Team’s meetings, and we once again will emphasize the importance of forwarding copies of letters written to our DC Team.
To facilitate the letter writing process, we will once again post sample letters and provide a letter-writing tool via our special website. Volunteers will also be reaching out to victims in targeted districts to assist with their letter writing efforts. Social media – via Facebook, LinkedIn, and others – will also be used. While letter-writing will be the primary grassroots tool, in some circumstances phone calls will also be encouraged. We will keep you posted on this.
If you are interested in volunteering to help with the letter writing campaign, or if you have strong experience with Facebook and other social media, please contact us.
About our Stanford Victim Coalition partners.
SVC members will be doing much the same thing as we will be. I’ve seen first-hand the considerable positive impact the SVC has had on its Congressional representatives. This highly effective organization not only brings with it over 60 supportive Congressional members, but helps us communicate to other Congressional members the national character of this legislation. We will not be able to pass this legislation without the active participation of our Stanford partners.
Once again, we thank you for your patience and past and continued support. We are so fortunate to have such a terrific commitment from our highly respected DC Team, led by the venerable Jim Smith (former U.S. Comptroller of the Currency & Deputy Undersecretary of the Treasury), along with Andy Barbour, Mitch Delk, Dave Tamasi, Will Smith and others (working mostly on a pro-bono basis). Their enormous contribution of time demonstrates both the importance and viability of this effort. They now look to us to put forth our best effort in attempting to forward legislation that will provide SIPC protection for those customers being denied, prevent the clawback of the innocent, and provide certainty for all investor customers of registered US Broker-dealers. The system demands many changes – but passage of this bill is the first step.
Please look for our email and other communications for further details regarding specific grassroots steps. And once again, if you wish to volunteer to help others write letters to Congress – even those who have not been victimized by these frauds — please let us know.
Game on!
Most sincerely,
Ron Stein, CFP
President, NIAP
Email: djmionis@investoraction.org
rstein@investoraction.org
Call us at: 631-425-0770
www.investoraction.org
www.fixsipcnow.com
