House Bill Would Insure Ponzi Feeder Fund Victims

Law360, New York (April 16, 2010, 1:04 PM EDT) -- Members of the U.S. House of Representatives Financial Services Committee are sponsoring legislation that would extend federal investor protection and insurance coverage to all Ponzi scheme victims, including indirect investors bilked by participating in so-called feeder funds.

The Ponzi Scheme Investor Protection Act, H.R. 5032, was introduced Thursday in the House by Reps. Gary Ackerman, D-N.Y.; Peter King, R-N.Y.; Ron Klein, D-Fla.; Dan Maffei, D-N.Y.; Ed Perlmutter, D-Colo.; and Jackie Speier, D-Calif.

The bill would expand the number of investors eligible for coverage through the Securities...
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