I 

111TH CONGRESS 

1ST SESSION H. R. 3550 

To enhance penalties for violations of securities protections that involve 

targeting seniors. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 10, 2009 

Mr. HODES (for himself and Ms. MOORE of Wisconsin) introduced the following bill; which was referred to the Committee on Financial Services, 

and in addition to the Committee on the Judiciary, 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 

A BILL 

To enhance penalties for violations of securities protections 

that involve targeting seniors. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Senior Investor Protec5 tions Enhancement Act of 2009’’. 

6 SEC. 2. DEFINITIONS. 

7 (a) IN GENERAL.—In this Act, the following defini8 tions shall apply: 


jlentini on DSKJ8SOYB1PROD with BILLS
2 

•HR 3550 IH

1 (1) SENIOR.—The term ‘‘senior’’ means an in2 dividual who is 62 years of age or older. 

3 (2) SECURITIES LAWS.—The term ‘‘securities 

4 laws’’ means the Securities Act of 1933 (15 U.S.C. 

5 77b et seq.), the Securities Exchange Act of 1934 

6 (15 U.S.C. 78a et seq.), the Investment Company 

7 Act of 1940 (15 U.S.C. 80a et seq.), and the Invest8 ment Advisers Act of 1940 (15 U.S.C. 80b et seq.). 

9 (b) APPLICATION OF SENIOR DEFINITION.— 

10 (1) SECURITIES ACT OF 1933.—Section 2(a) of 

11 the Securities Act of 1933 (15 U.S.C. 77b(a)) is 

12 amended by adding at the end the following: 

13 ‘‘(17) The term ‘senior’ means an individual 

14 who is 62 years of age or older.’’. 

15 (2) SECURITIES EXCHANGE ACT OF 1934.—Sec16 tion 3(a) of the Securities Exchange Act of 1934 

17 (15 U.S.C. 78c(a)) is amended by adding at the end 

18 the following: 

19 ‘‘(65) The term ‘senior’ means an individual 

20 who is 62 years of age or older.’’. 

21 (3) INVESTMENT COMPANY ACT OF 1940.—Sec22 tion 2(a) of the Investment Company Act of 1940 

23 (15 U.S.C. 80a–2(a)) is amended by adding at the 

24 end the following: 


jlentini on DSKJ8SOYB1PROD with BILLS
3 

•HR 3550 IH

1 ‘‘(54) The term ‘senior’ means an individual 

2 who is 62 years of age or older.’’. 

3 (4) INVESTMENT ADVISERS ACT OF 1940.—Sec4 tion 202(a) of the Investment Advisers Act of 1940 

5 (15 U.S.C. 80b–2(a)) is amended by adding at the 

6 end the following: 

7 ‘‘(29) The term ‘senior’ means an individual 

8 who is 62 years of age or older.’’. 

9 SEC. 3. ENHANCED PENALTIES FOR VIOLATIONS OF SECU10 RITIES ACT OF 1933. 

11 (a) CIVIL ACTIONS.—Section 20(d)(2) of the Securi12 ties Act of 1933 (15 U.S.C. 77t(d)(2)) is amended by add13 ing at the end the following: 

14 ‘‘(D) SPECIAL RULE FOR SENIORS.—Not15 withstanding subparagraphs (A), (B), and (C), 

16 if a person commits a violation described in 

17 paragraph (1), and the violation is directed to18 ward, targets, or is committed against a person 

19 who, at the time of the violation, is a senior, the 

20 Commission, in addition to any other applicable 

21 civil penalty, may impose a civil penalty of not 

22 more than $50,000 for each such violation.’’. 

23 (b) OTHER VIOLATIONS.—Section 24 of the Securi24 ties Act of 1933 (15 U.S.C. 77x) is amended— 


jlentini on DSKJ8SOYB1PROD with BILLS
4 

•HR 3550 IH

1 (1) by inserting ‘‘(a) IN GENERAL.—’’ before 

2 ‘‘Any person’’; and 

3 (2) by adding at the end the following: 

4 ‘‘(b) SPECIAL RULE FOR SENIORS.—Notwith5 standing subsection (a), if a person commits a violation 

6 described in subsection (a), and the violation is directed 

7 toward, targets, or is committed against a person who, at 

8 the time of the violation is a senior, the Commission, in 

9 addition to any other applicable civil penalty, may impose 

10 a civil penalty of not more than $50,000 for each such 

11 violation.’’. 

12 SEC. 4. ENHANCED PENALTIES FOR VIOLATIONS OF SECU13 RITIES ACT OF 1934. 

14 (a) CIVIL ACTIONS.—Section 21(d)(3)(B) of the Se15 curities Exchange Act of 1934 (15 U.S.C. 78u(d)(3)(B)) 

16 is amended by adding at the end the following: 

17 ‘‘(iv) SPECIAL RULE FOR SENIORS.— 

18 Notwithstanding clauses (i), (ii), and (iii), 

19 if a person commits a violation described 

20 in subparagraph (A), and the violation is 

21 directed toward, targets, or is committed 

22 against a person who, at the time of the 

23 violation, is a senior, the Commission, in 

24 addition to any other applicable civil pen25 alty, may impose a civil penalty of not 


jlentini on DSKJ8SOYB1PROD with BILLS
5 

•HR 3550 IH

1 more than $50,000 for each such viola2 tion.’’. 

3 (b) WILLFUL VIOLATIONS.—Section 21B(b) of the 

4 Securities Exchange Act of 1934 (15 U.S.C. 78u–2(b)) 

5 is amended by adding at the end the following: 

6 ‘‘(4) SPECIAL RULE FOR SENIORS.—Notwith7 standing paragraphs (1), (2), and (3), if a person 

8 engages in an act or omission described in sub9 section (a), and the violation is directed toward, tar10 gets, or is committed against a person who, at the 

11 time of the violation, is a senior, the Commission, in 

12 addition to any other applicable civil penalty, may 

13 impose a civil penalty of not more than $50,000 for 

14 each such violation.’’. 

15 (c) OTHER VIOLATIONS.—Section 32 of the Securi16 ties Exchange Act of 1934 (15 U.S.C. 78ff) is amended 

17 by adding at the end the following: 

18 ‘‘(d) SPECIAL RULE FOR SENIORS.—Notwith19 standing subsections (a), (b), and (c), if a person commits 

20 a violation described in this section, and the violation is 

21 directed toward, targets, or is committed against a person, 

22 who at the time of the violation, is a senior, the Commis23 sion, in addition to any other applicable civil penalty, may 

24 impose a civil penalty of not more than $50,000 for each 

25 such violation.’’. 


jlentini on DSKJ8SOYB1PROD with BILLS
6 

•HR 3550 IH

1 SEC. 5. ENHANCED PENALTIES FOR VIOLATIONS OF IN2 VESTMENT COMPANY ACT OF 1940. 

3 (a) WILLFUL VIOLATIONS.—Section 9(d)(2) of the 

4 Investment Company Act of 1940 (15 U.S.C. 80a– 

5 9(d)(2)) is amended by adding at the end the following: 

6 ‘‘(D) SPECIAL RULE FOR SENIORS.—Not7 withstanding subparagraphs (A), (B), and (C), 

8 if a person engages in an act or omission de9 scribed in paragraph (1), and the violation is 

10 directed toward, targets, or is committed 

11 against a person, who, at the time of the viola12 tion, is a senior, the Commission, in addition to 

13 any other applicable civil penalty, may impose a 

14 civil penalty of not more than $50,000 for each 

15 such violation.’’. 

16 (b) CIVIL ACTIONS.—Section 42(e)(2) of the Invest17 ment Company Act of 1940 (15 U.S.C. 80a–41(e)(2)) is 

18 amended by adding at the end the following: 

19 ‘‘(D) SPECIAL RULE FOR SENIORS.—Not20 withstanding subparagraphs (A), (B), and (C), 

21 if a person commits a violation described in 

22 paragraph (1), and the violation is directed to23 ward, targets, or is committed against a person 

24 who, at the time of the violation, is senior, the 

25 Commission, in addition to any other applicable 


jlentini on DSKJ8SOYB1PROD with BILLS
7 

•HR 3550 IH

1 civil penalty, may impose a civil penalty not 

2 more than $50,000 for each such violation.’’. 

3 (c) OTHER VIOLATIONS.—Section 49 of the Invest4 ment Company Act of 1940 (15 U.S.C. 80a–48) is amend5 ed— 

6 (1) by inserting ‘‘(a) IN GENERAL.—’’ before 

7 ‘‘Any person’’; and 

8 (2) by adding at the end the following: 

9 ‘‘(b) SPECIAL RULE FOR SENIORS.—Notwith10 standing subsection (a), if a person commits a violation 

11 described in subsection (a), and the violation is directed 

12 toward, targets, or is committed against a person who, at 

13 the time of the violation, is a senior, the Commission, in 

14 addition to any other applicable civil penalty, may impose 

15 a civil penalty of not more than $50,000 for each such 

16 violation.’’. 

17 SEC. 6. ENHANCED PENALTIES FOR VIOLATIONS OF IN18 VESTMENT ADVISERS ACT OF 1940. 

19 (a) WILLFUL VIOLATIONS.—Section 203(i)(2) of the 

20 Investment Advisers Act of 1940 (15 U.S.C. 80b–3(i)(2)) 

21 is amended by adding at the end the following: 

22 ‘‘(D) SPECIAL RULE FOR SENIORS.—Not23 withstanding subparagraphs (A), (B), and (C), 

24 if a person engages in an act or omission de25 scribed in paragraph (1), and the violation is 


jlentini on DSKJ8SOYB1PROD with BILLS
8 

•HR 3550 IH

1 directed toward, targets, or is committed 

2 against a person who, at the time of the viola3 tion, is a senior, the Commission, in addition to 

4 any other applicable civil penalty, may impose a 

5 civil penalty of not more than $50,000 for each 

6 such violation.’’. 

7 (b) CIVIL ACTIONS.—Section 209(e)(2) of the Invest8 ment Advisers Act of 1940 (15 U.S.C. 80b–9(e)(2)) is 

9 amended by adding at the end the following: 

10 ‘‘(D) SPECIAL RULE FOR SENIORS.—Not11 withstanding subparagraphs (A), (B), and (C), 

12 if a person commits a violation under this title, 

13 and the violation is directed toward, targets, or 

14 is committed against a person who, at the time 

15 of the violation, is a senior, the Commission, in 

16 addition to any other applicable civil penalty, 

17 may impose a civil penalty of not more than 

18 $50,000 for each such violation.’’. 

19 (c) OTHER VIOLATIONS.—Section 217 of the Invest20 ment Advisers Act of 1940 (15 U.S.C. 80b–17) is amend21 ed— 

22 (1) by inserting ‘‘(a) IN GENERAL.—’’ before 

23 ‘‘Any person’’; and 

24 (2) by adding at the end the following: 


jlentini on DSKJ8SOYB1PROD with BILLS
9 

•HR 3550 IH

1 ‘‘(b) SPECIAL RULE FOR SENIORS.—Notwith2 standing subsection (a), if a person commits a violation 

3 described in subsection (a), and the violation is directed 

4 toward, targets, or is committed against a person who, at 

5 the time of the violation, is a senior, the Commission, in 

6 addition to any other applicable civil penalty, may impose 

7 a civil penalty of not more than $50,000 for each such 

8 violation.’’. 

9 SEC. 7. DIRECTIVE TO THE UNITED STATES SENTENCING 

10 COMMISSION. 

11 (a) IN GENERAL.—Pursuant to its authority under 

12 section 994(p) of title 28, United States Code, and in ac13 cordance with this section, the United States Sentencing 

14 Commission shall review and amend the Federal sen15 tencing guidelines and policy statements to ensure that the 

16 guideline offense levels and enhancements appropriately 

17 punish violations of the securities laws against seniors. 

18 (b) REQUIREMENTS.—In carrying out this section, 

19 the United States Sentencing Commission shall— 

20 (1) ensure that section 2B1.1 and 2C1.1 of the 

21 Federal sentencing guidelines (and any successors 

22 thereto) apply to and punish offenses in which the 

23 victim of a violation of the securities laws is a sen24 ior; 


jlentini on DSKJ8SOYB1PROD with BILLS
10 

•HR 3550 IH

1 (2) ensure reasonable consistency with other 

2 relevant directives, provisions of the Federal sen3 tencing guidelines, and statutory provisions; 

4 (3) make any necessary and conforming 

5 changes to the Federal sentencing guidelines, in ac6 cordance with the amendments made by this Act; 

7 and 

8 (4) ensure that the Federal sentencing guide9 lines adequately meet the purposes of sentencing set 

10 forth in section 3553(a)(2) of title 18, United States 

11 Code. 

Æ 


jlentini on DSKJ8SOYB1PROD with BILLS