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HR 3634 IH

To permit certain funds assessed for securities laws violations to be used to compensate employees who are victims of excessive pension fund investments in the securities of their employers, and for other purposes.

January 24, 2002

Ms. WATERS introduced the following bill; which was referred to the Committee on Financial Services, and in addition to the Committee on House Administration, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

To permit certain funds assessed for securities laws violations to be used to compensate employees who are victims of excessive pension fund investments in the securities of their employers, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Enron Employee Pension Recovery Act of 2002'.

SEC. 2. SECURITIES AND EXCHANGE COMMISSION AUTHORITY TO PROVIDE RELIEF.

(a) PROCEEDS OF ENRON AND ANDERSEN ENFORCEMENT ACTIONS- If in any administrative or judicial proceeding brought by the Securities and Exchange Commission against--

(1) the Enron Corporation, any subsidiary or affiliate of such Corporation, or any officer, director, or principal shareholder of such Corporation, subsidiary, or affiliate for any violation of the securities laws; or

(2) Arthur Andersen L.L.C., any subsidiary or affiliate of Arthur Andersen L.L.C., or any general or limited partner of Arthur Andersen L.L.C., or such subsidiary or affiliate, for any violation of the securities laws with respect to any services performed for or in relation to the Enron Corporation, any subsidiary or affiliate of such Corporation, or any officer, director, or principal shareholder of such Corporation, subsidiary, or affiliate;

the Commission obtains an order providing for an accounting and disgorgement of funds, such disgorgement fund (including any addition to such fund required or permitted under this section) shall be allocated in accordance with the requirements of this section.

(b) PRIORITY FOR FORMER ENRON EMPLOYEES- The Commission shall, by order, establish an allocation system for the disgorgement fund. Such system shall provide that, in allocating the disgorgement fund amount the victims of the securities laws violations described in subsection (a), the first priority shall be given to individuals who were employed by the Enron Corporation, or a subsidiary or affiliate of such Corporation, and who were participants in an individual account plan established by such Corporation, subsidiary, or affiliate. Such allocations among such individuals shall be in proportion to the extent to which the nonforfeitable accrued benefit of each such individual under the plan was invested in the securities of such Corporation, subsidiary, or affiliate.

(c) ADDITION OF CIVIL PENALTIES- If, in any proceeding described in subsection (a), the Commission assesses and collects any civil penalty, the Commission shall, notwithstanding sections 21(d)(3)(C)(i), 21A(d)(1), or any other provision of the securities laws, be payable to the disgorgement fund.

(d) ACCEPTANCE OF FEDERAL CAMPAIGN CONTRIBUTIONS-

(1) IN GENERAL- Section 313 of the Federal Election Campaign Act of 1971 (2 U.S.C. 439a) is amended by inserting before `or may be used' the following: `may be transferred to any disgorgement fund which is required to be allocated in accordance with the requirements of the Enron Employee Pension Recovery Act of 2002,'.

(2) EFFECTIVE DATE- The amendment made by paragraph (1) shall apply with respect to any amounts received by a candidate at any time before, on, or after the date of the enactment of this Act.

(e) ACCEPTANCE OF ADDITIONAL DONATIONS- The Commission is authorized to accept, hold, administer, and utilize gifts, bequests and devises of property, both real and personal, to the United States for the disgorgement fund. Gifts, bequests, and devises of money and proceeds from sales of other property received as gifts, bequests, or devises shall be deposited in the disgorgement fund and shall be available for allocation in accordance with subsection (b).

(f) DEFINITIONS- As used in this section:

(1) COMMISSION- The term `Commission' means the Securities Exchange Commission.

(2) SECURITIES LAWS- The term `securities laws' means the Securities Act of 1933 (15 U.S.C. 78a et seq.), the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.), the Trust Indenture Act of 1939 (15 U.S.C. 77aaa et seq.), the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.), the Investment Advisers Act of 1940 (15 U.S.C. 80b et seq.), and the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.).

(3) DISGORGEMENT FUND- The term `disgorgement fund' means a disgorgement fund established in any administrative or judicial proceeding described in subsection (a).

(4) SUBSIDIARY OR AFFILIATE- The term `subsidiary or affiliate' when used in relation to a person means any entity that controls, is controlled by, or is under common control with such person.

(5) OFFICER, DIRECTOR, OR PRINCIPAL SHAREHOLDER- The term `officer, director, or principal shareholder' when used in relation to the Enron Corporation, or any subsidiary or affiliate of such Corporation, means any person that is subject to the requirements of section 16 of the Securities Exchange Act of 1934 (15 U.S.C. 78p) in relation to the Enron Corporation, or any subsidiary or affiliate of such Corporation.

(6) NONFORFEITABLE; ACCRUED BENEFIT; INDIVIDUAL ACCOUNT PLAN- The terms `nonforfeitable', `accrued benefit', and `individual account plan' have the meanings provided such terms, respectively, in paragraphs (19), (23), and (34) of section 3 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1002(19), (23), (34)).

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