81R13572 JE-D
 
  By: Fletcher, Gallego, King of Parker, H.B. No. 3769
      Solomons, Turner of Harris, et al.
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to certain fraudulent investment schemes; providing
  penalties.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Chapter 27, Business & Commerce Code, is amended
  by adding Section 27.03 to read as follows:
         Sec. 27.03.  FRAUDULENT PONZI SCHEME. (a) In this section:
               (1)  "Fraudulent Ponzi scheme" means any fraudulent
  investment operation that is managed in a manner that provides
  investors with returns derived substantially from investments made
  by other investors rather than from profits.
               (2)  "Promoting a fraudulent Ponzi scheme" means:
                     (A)  inducing or attempting to induce one or more
  other persons to participate in a fraudulent Ponzi scheme; or
                     (B)  assisting another person in inducing or
  attempting to induce one or more other persons to participate in a
  fraudulent Ponzi scheme, including by providing references.
         (b)  A person commits an offense if the person contrives,
  prepares, establishes, operates, advertises, sells, or promotes a
  fraudulent Ponzi scheme. An offense under this subsection is a
  felony of the first degree.
         (c)  Whenever it appears that a person has violated, or that
  reasonable cause exists to believe that a person is likely to
  violate, this chapter, the following persons may bring an action to
  enjoin the violation or enforce compliance with this chapter:
               (1)  the attorney general;
               (2)  the district attorney of Travis County; or
               (3)  the prosecuting attorney of a county in which the
  violation is alleged to have occurred.
         (d)  An action for injunctive relief brought by the attorney
  general or the district attorney of Travis County must be brought in
  a district court in Travis County.  An action brought by a
  prosecuting attorney under Subsection (c)(3) must be brought in a
  district court in a county in which all or part of the violation is
  alleged to have occurred.
         (e)  On a proper showing, the court may issue a restraining
  order, an order freezing assets, a preliminary or permanent
  injunction, or a writ of mandate, or may appoint a receiver for the
  defendant or the defendant's assets.
         (f)  A receiver appointed by the court under Subsection (e)
  may, with approval of the court, exercise all of the powers of the
  defendant's directors, officers, partners, trustees, or persons
  who exercise similar powers and perform similar duties.
         (g)  An action brought under this section may include a claim
  for ancillary relief, including a claim for costs or civil
  penalties authorized under this chapter, or for restitution or
  damages on behalf of the persons injured by the act constituting the
  subject matter of the action, and the court has jurisdiction to
  award that relief.
         (h)  An investor in a fraudulent Ponzi scheme may recover up
  to 50 percent of the investor's investment in a fraudulent Ponzi
  scheme from the liquidation of assets owned by persons convicted of
  contriving, preparing, establishing, operating, advertising,
  selling, or promoting the fraudulent Ponzi scheme.
         (i)  The attorney general may seize and liquidate an asset of
  a person convicted of violating this section that is located in any
  state if the asset was purchased with funds derived substantially
  from investments in the fraudulent Ponzi scheme by residents of
  this state.
         (j)  The attorney general may investigate any transaction
  involving a person charged with violating this section that
  occurred up to six months before the indictment of the person.
         (k)  The attorney general may seize and liquidate any assets
  transferred or sold to a third party with the intent to evade,
  hinder, delay, or prevent the seizure and liquidation of assets as
  prescribed by Subsection (i) by a person convicted of violating
  this section.
         SECTION 2.  Chapter 17, Code of Criminal Procedure, is
  amended by adding Article 17.153 to read as follows:
         Art. 17.153.  MINIMUM BAIL FOR PROMOTION OF FRAUDULENT PONZI
  SCHEME. The minimum amount of bail required for a person charged
  with a violation of Section 27.03, Business & Commerce Code, may not
  be less than $500,000.
         SECTION 3.  This Act takes effect September 1, 2009.