Sponsor: Rep. Gary Ackerman [D-NY5]
Status: Introduced: May 25th, 2011
Co-Sponsors: Click here.
To amend the Securities Investor Protection Act of 1970 to provide insurance coverage for certain indirect investors caught in Ponzi schemes, and for other purposes.
The Ackerman legislation seeks to inhibit clawback against innocent investors, provides SIPC relief for indirect investor victims, and provides a redefinition of “net equity” that is more akin to what the Trustee will likely pursue in bankruptcy court. While NIAP is highly supportive of the first two aspects of the proposed legislation and NIAP appreciates Congressman Ackerman’s support of Madoff victims thus far, the legislation itself is seen as largely unimportant given the current politics of the House of Representatives, and the legislation proposed by the Subcommittee Chairman, Scott Garrett (R-NJ) – HR757 – which is what will be taken up. Taking guidance from NIAP’s lobby experts, NIAP has made a strategic decision to put its energies into supporting a bill that will move out of Committee, and continue to support the indirects, but build carefully on growing support for the Garrett legislation then build support for relief for indirect investors. It is felt that energies turned to supporting the Ackerman legislation will detract from the key focus on the Garrett legislation.