Investor Justice Act of 2022
Bill: S.4657 | Sponsor: Sen. Cortez Masto, Catherine (D-NV)
Policy area: Finance and Financial Sector

Summary:
Investor Justice Act of 2022
This bill establishes grants for investor advocacy clinics. To qualify, clinics associated with a law school or a tax-exempt organization must provide free legal representation to investors with securities arbitration and mediation claims pending before a registered national securities association.

To amend the Securities Exchange Act of 1934 to establish a grant 
  program to fund qualified investor advocacy clinics, and for other 
                               purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Investor Justice Act of 2022''.

SEC. 2. GRANTS TO QUALIFIED INVESTOR ADVOCACY CLINICS.

    Section 4(g) of the Securities Exchange Act of 1934 (15 U.S.C. 
78d(g)) is amended by adding at the end the following:
            ``(9) Grants to qualified investor advocacy clinics.--
                    ``(A) Definitions.--In this paragraph:
                            ``(i) Qualified investor advocacy clinic.--
                        The term `qualified investor advocacy clinic' 
                        means an entity that--
                                    ``(I) provides, or will provide, 
                                free representation to investors with 
                                claims of less than $100,000 (as such 
                                amount is annually adjusted by the 
                                Investor Advocate to reflect the 
                                percentage change in the Consumer Price 
                                Index for All Urban Consumers published 
                                by the Bureau of Labor Statistics of 
                                the Department of Labor) in securities 
                                arbitrations and mediations before a 
                                registered national securities 
                                association (with exceptions to the 
                                requirements of this subclause 
                                authorized to be made by the Investor 
                                Advocate on a case-by-case basis); and
                                    ``(II) is or will be sponsored, 
                                offered, or run by--
                                            ``(aa) a clinical program 
                                        at, or partnering with, an 
                                        American Bar Association 
                                        accredited law school; or
                                            ``(bb) an organization 
                                        described in section 501(c) of 
                                        the Internal Revenue Code of 
                                        1986 and exempt from tax under 
                                        section 501(a) of such Code.
                            ``(ii) Qualified representative.--The term 
                        `qualified representative' means any individual 
                        authorized to represent investors before a 
                        registered national securities association.
                    ``(B) Grant authority.--The Commission, acting 
                through the Investor Advocate, may make grants, on a 
                competitive basis, to qualified investor advocacy 
                clinics in accordance with this paragraph.
                    ``(C) Applications.--To be eligible for a grant 
                under subparagraph (B), a qualified investor advocacy 
                clinic shall submit to the Commission an application at 
                such time, in such form, and containing such 
                information as the Commission may require, including 
                information with respect to--
                            ``(i) the number of investors in the 
                        geographical area served by the clinic;
                            ``(ii) other similar entities serving the 
                        same population;
                            ``(iii) the quality of the program offered 
                        by the clinic, including--
                                    ``(I) the qualifications of the 
                                administrators and qualified 
                                representatives of the clinic; and
                                    ``(II) the record of the clinic, if 
                                any, in providing legal and educational 
                                services to investors with low dollar 
                                value claims in arbitrations and 
                                mediations; and
                            ``(iv) funding sources available to the 
                        clinic, including--
                                    ``(I) amounts received from other 
                                grants and contributions; and
                                    ``(II) the endowment and resources 
                                of any institution sponsoring the 
                                clinic.
                    ``(D) Grant uses.--A qualified investor advocacy 
                clinic to which a grant is made under subparagraph (B) 
                may only use the grant funds for the development, 
                expansion, or continuation of the qualified investor 
                advocacy clinic.
                    ``(E) Detail of federal agency employees.--
                            ``(i) In general.--Upon the request of the 
                        Commission, the head of any Federal agency may 
                        detail, on a reimbursable basis, any of the 
                        personnel of that Federal agency to the 
                        Commission to assist the Commission in carrying 
                        out the functions of the Commission under this 
                        paragraph.
                            ``(ii) No interruption of status.--The 
                        detail of any personnel under clause (i) shall 
                        be without interruption or loss of civil 
                        service status or privilege.
                    ``(F) Transparency.--A qualified investor advocacy 
                clinic to which a grant is made under subparagraph (B) 
                shall submit to the Commission a detailed accounting of 
                the use of the grant funds at such time, in such form, 
                and containing such information as the Commission may 
                require.
                    ``(G) Limitations.--
                            ``(i) Aggregate limitation.--The aggregate 
                        amount of grants made under subparagraph (B) 
                        during a fiscal year may not exceed $5,000,000 
                        (as such amount is annually adjusted by the 
                        Investor Advocate to reflect the percentage 
                        change in the Consumer Price Index for All 
                        Urban Consumers published by the Bureau of 
                        Labor Statistics of the Department of Labor).
                            ``(ii) Single clinic limitation.--In making 
                        grants under subparagraph (B), the Commission 
                        may not make, during a fiscal year, more than 
                        $150,000 (as such amount is annually adjusted 
                        to reflect the percentage change in the 
                        Consumer Price Index for All Urban Consumers 
                        published by the Bureau of Labor Statistics of 
                        the Department of Labor) in grants to any 
                        single qualified investor advocacy clinic.
                            ``(iii) Federal share.--The Federal share 
                        of the cost of activities carried out using a 
                        grant made under subparagraph (B) may not 
                        exceed 50 percent.
                            ``(iv) Multi-year grants.--
                                    ``(I) In general.--In making grants 
                                under subparagraph (B), the Commission 
                                may make multi-year grants.
                                    ``(II) Limitation.--A multi-year 
                                grant made under this clause may not be 
                                made for a period exceeding 3 years.
                    ``(H) Authorization of appropriations.--There are 
                authorized to be appropriated such sums as may be 
                necessary to carry out this paragraph.''.
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