(c) OVERSIGHT OF TRUSTEE COMPENSATION.—Sec-
tion 5(b)(5)(C) of such Act (15 U.S.C. 78eee(b)(5)(C)) 
is amended by striking ‘‘In any case in which such allow-
ances are to be paid by SIPC without reasonable expecta-
tion of recoupment thereof as provided in this Act and 
there is no difference between the amounts requested and 
the amounts recommended by SIPC, the court shall award 
the amounts recommended by SIPC. In determining the 
amount of allowances in all other cases, the court shall 
give due consideration to the nature, extent, and value of 
the services rendered, and shall place considerable reliance 
on the recommendation of SIPC.’’ and inserting ‘‘In deter-
mining the amount to be awarded for allowances, the court 
shall give due consideration to the nature, extent, and 
value of the services rendered. In any case in which such 
allowances are to be paid by SIPC and there is a reason-
able expectation of recoupment thereof as provided in this 
Act, the court shall place considerable reliance on the rec-
ommendation of SIPC.’’. 
SEC. 3. SIPC FUND ASSESSMENT. 
Not later than the end of the 60-day period beginning 
on the date of the enactment of this Act, SIPC shall issue 
regulations to modify the SIPC Fund assessment levels 
to ensure they are adequate to cover the anticipated costs 
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emcdonald on DSK2BSOYB1PROD with BILLS
to the SIPC Fund of carrying out the amendments made 
by this Act. 
SEC. 4. AUDITS OF CERTAIN TRUSTEES. 
Section 11(c) of the Securities Investor Protection 
Act of 1970 (15 U.S.C. 78ggg(c)) is amended by adding 
at the end the following new paragraph: 
‘‘(3) AUDITS OF CERTAIN TRUSTEES.—With re-
spect to a liquidation proceeding for which SIPC 
does 
not 
have 
a 
reasonable 
expectation 
of 
recoupment of the advances made by SIPC for such 
liquidation proceeding, SIPC shall— 
‘‘(A) select an independent public account-
ant to perform an annual audit of the trustee 
of the debtor in such proceeding; and 
‘‘(B) issue a report to the Commission con-
taining the results of such audit.’’. 
SEC. 5. DEFINITIONS. 
Section 16 of the Securities Investor Protection Act 
of 1970 (15 U.S.C. 78lll) is amended— 
(1) in paragraph (11), by adding at the end the 
following: ‘‘In determining net equity under this 
paragraph with respect to a Ponzi scheme investor, 
the amount of cash in the account or accounts of 
such investor, as calculated under subparagraphs 
(A) through (C), shall be adjusted by the percentage 
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increase or decrease in the Consumer Price Index 
for All Urban Consumers published by the Bureau 
of Labor Statistics of the Department of Labor for 
the period of time between when the cash was placed 
in the account and the time the net equity is deter-
mined.’’; and 
(2) by adding at the end the following new 
paragraphs: 
‘‘(15) SECURITIES LAWS.—The term ‘securities 
laws’ has the meaning given such term under section 
3 of the Securities Exchange Act of 1934. 
‘‘(16) 
DEFINITIONS
RELATED
TO
PONZI 
SCHEMES.— 
‘‘(A) PONZI
SCHEME.—The term ‘Ponzi 
scheme’ means any fraudulent investment oper-
ation which is managed in a manner that pro-
vides investors with returns (or purported re-
turns) derived substantially from investments 
made by other investors rather than from prof-
its. 
‘‘(B) PONZI
SCHEME
INVESTOR.—The 
term ‘Ponzi scheme investor’ means a customer 
of a debtor, where the trustee of such debtor 
has determined the debtor to be a Ponzi 
scheme. 
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‘‘(C) INDIRECT
PONZI
SCHEME
INVES-
TOR.—The term ‘indirect Ponzi scheme inves-
tor’ means any person (including any person 
with whom the Ponzi scheme investor deals as 
principal or agent) who is not a customer of a 
Ponzi scheme, but who is an investor in a Ponzi 
scheme investor and on whose behalf the Ponzi 
scheme investor has a claim on account of secu-
rities received, acquired, or held by the Ponzi 
scheme in the ordinary course of its business as 
a broker or dealer from or for the securities ac-
counts of such Ponzi scheme investor for safe-
keeping, with a view to sale, to cover con-
summated sales, pursuant to purchases, as col-
lateral, security, or for purposes of effecting 
transfer.’’. 
Æ 
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