I 
109TH CONGRESS 
2D SESSION 
H. R. 5956 
To make all civil penalties collected by the Securities and Exchange Commis-
sion in securities law enforcement actions available for the benefit of 
victims of securities law violations, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 28, 2006 
Mr. BAKER (for himself, Mr. KANJORSKI, Mr. OXLEY, Mr. FRANK of Massa-
chusetts, and Mr. SHAYS) introduced the following bill; which was re-
ferred to the Committee on Financial Services 
A BILL 
To make all civil penalties collected by the Securities and 
Exchange Commission in securities law enforcement ac-
tions available for the benefit of victims of securities 
law violations, 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 ‘‘Fair Fund Improve-
ment Act’’. 
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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 RE-
LIEF OF VICTIMS.—If in any judicial or administrative ac-
tion brought by the Commission under the securities laws 
(as such term is defined in section 3(a)(47) of the Securi-
ties 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). 
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SEC. 3. AUTHORITY TO CONTRACT WITH PRIVATE COUN-
SEL FOR LEGAL SERVICES TO COLLECT DE-
LINQUENT 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 au-
thorized to enter into contracts to retain private 
legal counsel to furnish legal services, including 
representation in litigation, negotiation, com-
promise, and settlement, in the case of any 
claim of indebtedness resulting from any judg-
ment or order (either by litigation or settle-
ment) obtained by the Commission in any judi-
cial action or administrative proceeding brought 
by or on behalf of the Commission. Private 
counsel retained under this paragraph may rep-
resent the Commission in such debt collection 
matters to the same extent as the Commission 
may represent itself. 
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‘‘(B) TERMS
AND
CONDITIONS
OF
CON-
TRACT.—Each such contract shall include such 
terms and conditions as the Commission con-
siders necessary and appropriate, and shall in-
clude 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 dis-
pute, 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 termi-
nate either the contract or the private 
counsel’s representation of the Commission 
in particular cases for any reason, includ-
ing for the convenience of the Commission. 
‘‘(C) 
PAYMENT
OF
FEES.—Notwith-
standing section 3302(b) of title 31, United 
States Code, a contract under this paragraph 
may provide that fees and costs incurred by pri-
vate counsel under such contracts are payable 
from the amounts recovered. 
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‘‘(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 Commis-
sion. Such service shall be made in accordance 
with the rules of procedure of the court in 
which the action is brought.’’. 
Æ 
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