WASHINGTON (HedgeWorld.com)–A subcommittee of the House of Representatives voted in favor of the Securities Fraud Deterrence and Investor Restitution Act, H.R. 2179.
The idea of the bill is to enhance the ability of the Securities and Exchange Commission to return funds obtained from securities frauds to the victims.
One group of potential beneficiaries of this bill, fund of funds managers, is so far unenthusiastic. A typical reaction was that of Richard Rego, managing partner of Araca Hedge Equity LLC, Glastonbury, Conn. “There already are procedures and ways to get money back. This doesn’t sound like it will add very much,” he said.
The bill is sponsored and was introduced by Rep. Richard H. Baker (R-La.), chairman of the capital markets subcommittee that voted Thursday. It was co-sponsored by Rep. Doug Ose (R-Calif.), the subcommittee’s vice-chairman, Rep. Michael G. Oxley (R-Ohio), chairman of the full financial services committee, as well as by Rep. Susan Kelly (R-N.Y.), and Rep. Patrick J. Tiberi (R-Ohio).
An amendment offered by Mr. Baker Thursday, allowing states voluntarily to contribute funds recovered from securities violators to the SEC fund designated to return money to the investors who had lost it, was approved by a voice vote. Subcommittee members were concerned that many states do not have a mechanism for returning defrauded monies to investors.
Separately, the subcommittee also approved Thursday of the Church Pension Plan Fairness Act, H.R. 1533, which will permit church pension plans to invest in collective trusts. This bill had been introduced by Rep. Judy Biggert (R-Ill.) and was co-sponsored by Reps. Ron Paul (R-Texas), Walter B. Jones, Jr. (R-N.C.), J.D. Hayworth (R-Ariz.), John Shimkus (R-Ill.), Barney Frank (D-Mass.), Charles A. Gonzalez (D-Texas) and Harold E. Ford Jr. (D-Tenn.).
“America’s clergy are no less interested in saving money for their retirement than most any other employee in the workforce,” said Mr. Biggert in a statement. “Yet for far too long, Congress has unintentionally failed to update church pension laws, making it more difficult for clergy and other church employees to maximize their retirement savings.”