Dear NIAP members, Madoff and other Ponzi-Scheme Victims,
Even as victims are feeling increasing pressure from the Madoff trustee who has shown limited flexibility in the mediation efforts, new legislation has been introduced in Congress to provide protection for Madoff, Stanford and certain other fraud victims.
HR 5852, introduced on July 14th by Rep. Blaine Luetkemeyer (R-MO), and co-sponsored by Rep. Carolyn Maloney (D-NY), and House Rules Committee Chairman Rep. Pete Sessions (R-TX), is a slightly scaled-back version of HR3482 and S1725, previously introduced by Rep. Scott Garrett (R-NJ), Rep. Maloney, and Senator Schumer. The legislation has been referred to the House Financial Services Committee.
The “fresh bill”, maintains the key protections of the earlier legislation: it reasserts the SEC’s plenary authority over SIPC, utilizes final account statements as determinants of net equity, protects against the clawback of innocent investors, and provides a funding mechanism for SIPC to finance payments to claimants should the SIPC Fund balance be reduced by more than 50%.
NIAP and the Stanford Victims Coalition (SVC) have continued to work behind the scenes with legislators and staffs to advance the legislation, and the SVC’s victims and leadership continue extensive grassroots involvement with representatives of Stanford victims who hold key positions in key committees. Representative Scott Garrett and his staff have been enormously committed to moving the legislation forward, and should be thanked for the heroic efforts in trying to move the legislation forward against the resistance of SIPC and other entrenched interests.
The bill’s new leadership — Legislators Pete Sessions and Blaine Luetkemeyer — provide fresh faces along with significant clout, and will be working with Leg. Carolyn Maloney to help move the bill forward, hopefully as Congress returns in early September from the summer recess.
Furthermore, the newly expanded lobby team is hopeful that this bill now has overcome the key obstacles in the House. We will need to fund these lobby efforts, something which will be discussed in subsequent communications.
Even before last year’s Senate public hearings, we continued to maintain a low public profile in these efforts, and will likely continue to do so, particularly around the involvement of our new lobby partners. We ask that investors be extremely discreet in this, and also be prepared to assist in the contingency funding necessary to help propel the bill to passage, to be discussed subsequently. (Clients of two attorneys are already extensively involved.)
I have been asked by numerous victims currently engaged in lawsuits with the Trustee regarding advice as to whether to settle and the prospects of passage of the legislation. I/we cannot dispense such advice. This we can say: our lobby team remains cautiously optimistic about passage and we – and our friends at the SVC – are continuing to press the fight. Your patience is appreciated.
Best wishes to all,
Ron Stein, CFP
For more information contact NIAP at:
Phone: (800) 323-9250