H.R.1987 / 112th Congress

Ponzi Scheme Investor Protection Act of 2011

Subcommittee Hearings Held.

Congressional Research Service

Official summary

Version 00 · Introduced in House · May 25, 2011

Ponzi Scheme Investor Protection Act of 2011 - Amends the Securities Investor Protection Act of 1970 with respect to the duties of a trustee appointed for a Securities and Exchange Commission (SEC)-registered broker or dealer undergoing liquidation.

Instructs the trustee to take specified actions if the trustee determines that the debtor is a Ponzi scheme.

Establishes procedures for an indirect Ponzi scheme investor to file a claim.

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Instructs the trustee to: (1) coordinate with Ponzi scheme investors to ensure proper payments to indirect Ponzi scheme investors, and (2) take specified actions to pay indirect Ponzi scheme investors.

Prescribes the maximum aggregate amount of all cash and securities that may be awarded to each indirect Ponzi scheme investor.

Prohibits the trustee of a Ponzi scheme from seeking to recover money and profits from any Ponzi scheme investor unless such investor was either: (1) complicit in the Ponzi scheme, or (2) registered, or should have been registered, with the SEC as an an investment adviser, broker, dealer, or other person with a fiduciary duty to its customers or investors.

Requires the Securities Investor Protection Corporation (SIPC) to: (1) promulgate regulations to ensure that any required adjustment in the net equity of a Ponzi scheme investor is passed to the appropriate indirect Ponzi scheme investors, (2) advance to the trustee any moneys required to pay claims and implement this Act, and (3) promulgate regulations modifying SIPC Fund assessment levels to ensure they are adequate to cover the anticipated costs of implementing this Act.

Directs the court to award the amounts recommended by the SIPC if certain allowances are to be paid by the SIPC without reasonable expectation of recoupment and there is no difference between the amounts requested and the amounts recommended.

Requires SIPC to select an independent public accountant to perform an annual audit of the trustee of the debtor in a liquidation proceeding for which SIPC does not have a reasonable expectation of recoupment of the advances it made for the proceeding.

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People & committees

Who introduced it

Rep. Ackerman, Gary L. [D-NY-5] · D–NY

Committees

Financial Services Committee

8 cosponsorship records, including any withdrawals

Legislative record

Actions

A procedural vote is different from passage. Passage in one chamber does not establish enactment. Explore the glossary.

Mar 7, 2012
Subcommittee Hearings Held.
Jul 19, 2011
Referred to the Subcommittee on Capital Markets and Government Sponsored Enterprises.
May 25, 2011
Referred to the House Committee on Financial Services.
May 25, 2011
Introduced in House
May 25, 2011
Introduced in House

Primary sources

Bill text & related measures

Text links open the official source. We currently store references to these documents.

Introduced in House · May 25, 2011 Formatted Text PDF Formatted XML

Related bills identified by Congress.gov

No related bills are listed in this snapshot. This does not establish whether the proposal has appeared in earlier Congresses.

Source last updated: Aug 14, 2025. Consult Congress.gov for the current record.

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Neutral evidence review

Objective

Analyze H.R.1987 as objectively as possible. Explain its main provisions, who would be affected, possible benefits and harms, implementation, exceptions, and uncertainties. Present the strongest arguments for and against it, and identify evidence needed to assess its public impact.

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Discuss H.R.1987, 112th Congress: Ponzi Scheme Investor Protection Act of 2011

Official record: https://www.congress.gov/bill/112th-congress/house-bill/1987

Text version to examine: Introduced in House · 2011-05-25.

Official full text: https://www.congress.gov/112/bills/hr1987/BILLS-112hr1987ih.htm

Imported record last updated by the source: 2025-08-14T14:23:33Z. Verify current status and distinguish any later version from the version above.

Read the official text before answering. If you cannot access it, say so and ask me to provide it; do not assume a link means you have read the document. Distinguish proposals from enacted law, cite sources, and separate facts, interpretation, and uncertain predictions. Include counterarguments even when using a particular perspective.

Analyze H.R.1987 as objectively as possible. Explain its main provisions, who would be affected, possible benefits and harms, implementation, exceptions, and uncertainties. Present the strongest arguments for and against it, and identify evidence needed to assess its public impact.

Fairness and public impact

Progressive lens

Examine H.R.1987 through a progressive lens, focusing on fairness, access, economic inequality, and effects on vulnerable communities. Explain potential benefits, costs, and unintended consequences. Consider the strongest counterarguments and distinguish stated goals from demonstrated outcomes.

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Discuss H.R.1987, 112th Congress: Ponzi Scheme Investor Protection Act of 2011

Official record: https://www.congress.gov/bill/112th-congress/house-bill/1987

Text version to examine: Introduced in House · 2011-05-25.

Official full text: https://www.congress.gov/112/bills/hr1987/BILLS-112hr1987ih.htm

Imported record last updated by the source: 2025-08-14T14:23:33Z. Verify current status and distinguish any later version from the version above.

Read the official text before answering. If you cannot access it, say so and ask me to provide it; do not assume a link means you have read the document. Distinguish proposals from enacted law, cite sources, and separate facts, interpretation, and uncertain predictions. Include counterarguments even when using a particular perspective.

Examine H.R.1987 through a progressive lens, focusing on fairness, access, economic inequality, and effects on vulnerable communities. Explain potential benefits, costs, and unintended consequences. Consider the strongest counterarguments and distinguish stated goals from demonstrated outcomes.

Institutions and government scope

Conservative lens

Examine H.R.1987 through a conservative lens, focusing on fiscal responsibility, institutional stability, federalism, and the scope of government. Explain potential benefits, costs, and unintended consequences. Consider the strongest counterarguments and any provisions that challenge this perspective.

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Discuss H.R.1987, 112th Congress: Ponzi Scheme Investor Protection Act of 2011

Official record: https://www.congress.gov/bill/112th-congress/house-bill/1987

Text version to examine: Introduced in House · 2011-05-25.

Official full text: https://www.congress.gov/112/bills/hr1987/BILLS-112hr1987ih.htm

Imported record last updated by the source: 2025-08-14T14:23:33Z. Verify current status and distinguish any later version from the version above.

Read the official text before answering. If you cannot access it, say so and ask me to provide it; do not assume a link means you have read the document. Distinguish proposals from enacted law, cite sources, and separate facts, interpretation, and uncertain predictions. Include counterarguments even when using a particular perspective.

Examine H.R.1987 through a conservative lens, focusing on fiscal responsibility, institutional stability, federalism, and the scope of government. Explain potential benefits, costs, and unintended consequences. Consider the strongest counterarguments and any provisions that challenge this perspective.

Individual rights and government power

Liberty lens

Examine H.R.1987 through a civil-liberties and limited-government lens. Consider individual rights, privacy, voluntary choice, accountability, and government power. Explain tradeoffs, possible safeguards, and the strongest counterarguments without assuming the proposal is beneficial or harmful.

View full prompt & sources

Discuss H.R.1987, 112th Congress: Ponzi Scheme Investor Protection Act of 2011

Official record: https://www.congress.gov/bill/112th-congress/house-bill/1987

Text version to examine: Introduced in House · 2011-05-25.

Official full text: https://www.congress.gov/112/bills/hr1987/BILLS-112hr1987ih.htm

Imported record last updated by the source: 2025-08-14T14:23:33Z. Verify current status and distinguish any later version from the version above.

Read the official text before answering. If you cannot access it, say so and ask me to provide it; do not assume a link means you have read the document. Distinguish proposals from enacted law, cite sources, and separate facts, interpretation, and uncertain predictions. Include counterarguments even when using a particular perspective.

Examine H.R.1987 through a civil-liberties and limited-government lens. Consider individual rights, privacy, voluntary choice, accountability, and government power. Explain tradeoffs, possible safeguards, and the strongest counterarguments without assuming the proposal is beneficial or harmful.