Bowen Passes Senate Ag Committee, Vitter Places Hold Based on SIPC Handling of Stanford Ponzi Scheme

Press Release

U.S. Sen. David Vitter (R-La.) today announced that he will place a hold on the nomination of Sharon Bowen, acting chairman of the Securities Investor Protection Corporation (SIPC), to the be Commodity Futures Trading Commission (CFTC). Bowen's nomination was passed out of the Senate Agriculture, Nutrition and Forestry Committee this morning and will now come before the Senate for a vote. Vitter has raised concerns about Bowen's leadership at SIPC and their handling of the Stanford Ponzi scheme.

"Under Bowen's leadership, SIPC has completely failed to protect the Stanford Ponzi scheme victims, instead siding with its Wall Street members. That sort of leadership, and complete lack of responsiveness to Congress and the SEC, has no place at the CFTC. I'm putting a hold on the nomination until she adequately addresses concerns about SIPC's handling of the Stanford Ponzi scheme," Vitter said.

Vitter has asked SIPC to revisit the decision not to compensate victims of the Stanford Ponzi Scheme. Vitter sent a letter to Bowen on January 17, 2014 asking the SIPC Board of Directors to reconvene and take a new vote on compensating the victims. He sent a follow up letter on March 28. Bowen has not responded to the most recent request.

The SEC has concluded for years that victims of the alleged Stanford Group Co. Ponzi scheme are entitled to receive SIPC coverage for their losses. The SEC ruling was appealed and the SIPC board refused to compensate. In 2011 Vitter placed a hold on the nominations of two Securities and Exchange Commissioners until the SEC made a decision and released the hold once the SEC ruled in favor of the victims receiving SIPC coverage.

Vitter has introduced bipartisan legislation to provide relief to the victims of investor fraud like the Stanford Ponzi scheme by reforming the broken investor protection system.

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