To make all civil penalties collected by the Securities and Exchange Commission in securities law enforcement actions available for the benefit of victims of securities law violations, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Fair Fund Improvement Act''.

SEC. 2. FAIR FUND IMPROVEMENTS.

    (a) Amendment.--Subsection (a) of section 308 of the Sarbanes-Oxley 
Act of 2002 (15 U.S.C. 7246(a)) is amended to read as follows:
    ``(a) Civil Penalties To Be Used for the Relief of Victims.--If in 
any judicial or administrative action brought by the Commission under 
the securities laws (as such term is defined in section 3(a)(47) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(47)), the Commission 
obtains a civil penalty against any person for a violation of such 
laws, the amount of such civil penalty shall, on the motion or at the 
direction of the Commission, be added to and become part of a 
disgorgement fund or other fund established for the benefit of the 
victims of such violation.''.
    (b) Conforming Amendments.--
            (1) Section 308(b) of such Act is amended--
                    (A) by striking ``for a disgorgement fund described 
                in subsection (a)'' and inserting ``for a disgorgement 
                fund or other fund described in subsection (a)''; and
                    (B) by striking ``in the disgorgement fund'' and 
                inserting ``in such fund''.
            (2) Section 308 of such Act is further amended by striking 
        subsection (e).

SEC. 3. AUTHORITY TO CONTRACT WITH PRIVATE COUNSEL FOR LEGAL SERVICES 
              TO COLLECT DELINQUENT JUDGMENTS AND ORDERS.

    Subsection (b) of section 4 of the Securities Exchange Act of 1934 
(15 U.S.C. 78d(b)) is amended--
            (1) in the subsection heading by striking ``and Leasing 
        Authority'' and inserting ``, Leasing Authority, and 
        Contracting Authority''; and
            (2) by adding at the end of such subsection the following 
        new paragraph:
            ``(4) Contracting authority.--
                    ``(A) In general.--Notwithstanding any other 
                provision of law, the Commission is authorized to enter 
                into contracts to retain private legal counsel to 
                furnish legal services, including representation in 
                litigation, negotiation, compromise, and settlement, in 
                the case of any claim of indebtedness resulting from 
                any judgment or order (either by litigation or 
                settlement) obtained by the Commission in any judicial 
                action or administrative proceeding brought by or on 
                behalf of the Commission. Private counsel retained 
                under this paragraph may represent the Commission in 
                such debt collection matters to the same extent as the 
                Commission may represent itself.
                    ``(B) Terms and conditions of contract.--Each such 
                contract shall include such terms and conditions as the 
                Commission considers necessary and appropriate, and 
                shall include provisions specifying--
                            ``(i) the amount of the fee to be paid to 
                        the private counsel under such contract or the 
                        method for calculating that fee;
                            ``(ii) that the Commission retains the 
                        authority to represent itself, resolve a 
                        dispute, compromise a claim, end collection 
                        efforts, and refer a matter to other private 
                        counsel or to the Attorney General; and
                            ``(iii) that the Commission may terminate 
                        either the contract or the private counsel's 
                        representation of the Commission in particular 
                        cases for any reason, including for the 
                        convenience of the Commission.
                    ``(C) Payment of fees.--Notwithstanding section 
                3302(b) of title 31, United States Code, a contract 
                under this paragraph may provide that fees and costs 
                incurred by private counsel under such contracts are 
                payable from the amounts recovered.
                    ``(D) Competition requirements.--Nothing in this 
                paragraph shall relieve the Commission of the 
                competition requirements set forth in title III of the 
                Federal Property and Administrative Services Act of 
                1949 (41 U.S.C. 251 et seq.).
                    ``(E) Counterclaims.--In any action to recover 
                indebtedness which is brought on behalf of the 
                Commission by private counsel retained under this 
                paragraph, no counterclaim may be asserted against the 
                Commission unless the counterclaim is served directly 
                on the Commission. Such service shall be made in 
                accordance with the rules of procedure of the court in 
                which the action is brought.''.

Summary: Fair Fund Improvement Act - Amends the Sarbanes-Oxley Act of 2002 to revise the requirement that, if the Securities Exchange Commission (SEC) obtains an order requiring disgorgement for a violation, and also obtains a civil penalty, such penalty shall, at SEC motion or discretion, be added to the disgorgement fund for the benefit of victims. Repeals the initial requirement for a disgorgement order. Declares that, if the SEC obtains a civil penalty for violation of securities laws, the penalty shall, upon SEC motion, be added to and become part of a disgorgement or other fund established for the benefit of the victims of such violation. Authorizes the SEC to enter into contracts to retain private legal counsel to collect delinquent judgments and orders.