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.