Today, Congressman Bill Cassidy, M.D. (R-LA) and Congressman Ted Deutch (D-FL) introduced the Improving Security for Investors and Providing Closure Act, or Improving SIPC Act of 2012. The legislation seeks to provide victims of Ponzi Schemes, including ones similar to the scheme carried out by R. Allen Stanford, with a quicker path to a financial resolution. No taxpayer money will be required to fund this legislation and no increase to the national debt will be incurred if it is enacted.
Late last year SIPC made a settlement offer to the SEC to satisfy the claims of the Stanford Victims, but due to various restraints that exist in current law, SEC was able to reject this settlement offer on behalf of all the victims. This legislation creates an avenue by which, under the extraordinary circumstance of the SEC filing suit against SIPC to force a liquidation and payout, both SIPC and the individual victims would have the option to request, evaluate, and decide on their own whether they wish to take a one-time payment and exclude themselves from any further claims against the SIPC fund.
The Improving Security for Investors and Providing Closure Act, or Improving SIPC Act of 2012 does not force SIPC or the Stanford Victims to do anything. Instead, this legislation allows both parties to settle on these claims for a negotiated amount, as SIPC and countless victims hoped to do last year.
"R. Allen Stanford defrauded thousands of hard working men and women of their entire life savings. The Improving SIPC Act of 2012 offers victims a choice to recoup some of their money,"said Congressman Bill Cassidy. "Those who lost smaller amounts will be eligible for reimbursement from SIPC while those who decide to continue their court battle will be able to do so. Many victims of the Stanford Ponzi Scheme were working men and women, this legislation will enable them to put this tragedy behind them."
"The United States shut down the Stanford Financial Group in 2009, yet the thousands of Americans defrauded in this despicable Ponzi scheme have yet to be made whole," said Congressman Ted Deutch. "This legislation will provide some of the Stanford victims the opportunity to be reimbursed by SIPC without impeding the efforts of other victims to seek justice through the courts. This is a commonsense bill and I look forward to working with Congressman Cassidy and other bipartisan leaders to provide the victims of R. Allen Stanford with a choice they deserve to make."