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A BILL TO BE ENTITLED
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AN ACT
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relating to certain fraudulent investment schemes; providing |
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penalties. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Chapter 27, Business & Commerce Code, is amended |
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by adding Section 27.03 to read as follows: |
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Sec. 27.03. FRAUDULENT PONZI SCHEME. (a) In this section: |
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(1) "Fraudulent Ponzi scheme" means any fraudulent |
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investment operation that is managed in a manner that provides |
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investors with returns derived substantially from investments made |
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by other investors rather than from profits. |
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(2) "Promoting a fraudulent Ponzi scheme" means: |
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(A) inducing or attempting to induce one or more |
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other persons to participate in a fraudulent Ponzi scheme; or |
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(B) assisting another person in inducing or |
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attempting to induce one or more other persons to participate in a |
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fraudulent Ponzi scheme, including by providing references. |
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(b) A person commits an offense if the person contrives, |
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prepares, establishes, operates, advertises, sells, or promotes a |
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fraudulent Ponzi scheme. An offense under this subsection is a |
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felony of the first degree. |
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(c) Whenever it appears that a person has violated, or that |
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reasonable cause exists to believe that a person is likely to |
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violate, this chapter, the following persons may bring an action to |
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enjoin the violation or enforce compliance with this chapter: |
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(1) the attorney general; |
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(2) the district attorney of Travis County; or |
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(3) the prosecuting attorney of a county in which the |
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violation is alleged to have occurred. |
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(d) An action for injunctive relief brought by the attorney |
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general or the district attorney of Travis County must be brought in |
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a district court in Travis County. An action brought by a |
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prosecuting attorney under Subsection (c)(3) must be brought in a |
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district court in a county in which all or part of the violation is |
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alleged to have occurred. |
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(e) On a proper showing, the court may issue a restraining |
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order, an order freezing assets, a preliminary or permanent |
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injunction, or a writ of mandate, or may appoint a receiver for the |
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defendant or the defendant's assets. |
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(f) A receiver appointed by the court under Subsection (e) |
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may, with approval of the court, exercise all of the powers of the |
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defendant's directors, officers, partners, trustees, or persons |
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who exercise similar powers and perform similar duties. |
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(g) An action brought under this section may include a claim |
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for ancillary relief, including a claim for costs or civil |
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penalties authorized under this chapter, or for restitution or |
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damages on behalf of the persons injured by the act constituting the |
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subject matter of the action, and the court has jurisdiction to |
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award that relief. |
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(h) An investor in a fraudulent Ponzi scheme may recover up |
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to 50 percent of the investor's investment in a fraudulent Ponzi |
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scheme from the liquidation of assets owned by persons convicted of |
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contriving, preparing, establishing, operating, advertising, |
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selling, or promoting the fraudulent Ponzi scheme. |
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(i) The attorney general may seize and liquidate an asset of |
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a person convicted of violating this section that is located in any |
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state if the asset was purchased with funds derived substantially |
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from investments in the fraudulent Ponzi scheme by residents of |
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this state. |
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(j) The attorney general may investigate any transaction |
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involving a person charged with violating this section that |
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occurred up to six months before the indictment of the person. |
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(k) The attorney general may seize and liquidate any assets |
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transferred or sold to a third party with the intent to evade, |
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hinder, delay, or prevent the seizure and liquidation of assets as |
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prescribed by Subsection (i) by a person convicted of violating |
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this section. |
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SECTION 2. Chapter 17, Code of Criminal Procedure, is |
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amended by adding Article 17.153 to read as follows: |
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Art. 17.153. MINIMUM BAIL FOR PROMOTION OF FRAUDULENT PONZI |
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SCHEME. The minimum amount of bail required for a person charged |
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with a violation of Section 27.03, Business & Commerce Code, may not |
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be less than $500,000. |
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SECTION 3. This Act takes effect September 1, 2009. |