I
107TH CONGRESS
2D SESSION
H. R. 3634
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.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 24, 2002
Ms. WATERS introduced the following bill; which was referred to the Com-
mittee on Financial Services, and in addition to the Committee on House
Administration, for a period to be subsequently determined by the Speak-
er, in each case for consideration of such provisions as fall within the ju-
risdiction of the committee concerned
A BILL
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 Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Enron Employee Pen-
sion Recovery Act of 2002’’.
SEC. 2. SECURITIES AND EXCHANGE COMMISSION AUTHOR-
ITY TO PROVIDE RELIEF.
(a) PROCEEDS
OF ENRON
AND ANDERSEN EN-
FORCEMENT ACTIONS.—If in any administrative or judi-
cial 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, sub-
sidiary, 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 per-
formed 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 account-
ing 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 pro-
vide that, in allocating the disgorgement fund amount the
victims of the securities laws violations described in sub-
section (a), the first priority shall be given to individuals
who were employed by the Enron Corporation, or a sub-
sidiary or affiliate of such Corporation, and who were par-
ticipants 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 pro-
ceeding described in subsection (a), the Commission as-
sesses 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 CON-
TRIBUTIONS.—
(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 Pen-
sion 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 sub-
section (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 es-
tablished 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 SHARE-
HOLDER.—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 Ex-
change 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; IN-
DIVIDUAL ACCOUNT PLAN.—The terms ‘‘nonforfeit-
able’’, ‘‘accrued benefit’’, and ‘‘individual account
plan’’ have the meanings provided such terms, re-
spectively, in paragraphs (19), (23), and (34) of sec-
tion 3 of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1002(19), (23), (34)).
Æ