mr. garrett: we have the right to close. mr. peterson: i recognize the the gentleman from connecticut, mr. himes for three minutes. the chair: the gentleman is recognized for three minutes. mr. himes: i thank you, chairman for this important work that we do now to restore a sense of faith and trust in the financial system which american companies and families rely on for the credit that allow them to create jobs and offer employment. one of the least understood portions of this bill, madam chair, but one of the most important is the work that has been done on derivatives. instruments that allow our farmers to get rid of the risk of future soybean prices if they don't want to bear those risks, allow our exporters to get rid of currency risk, but despite the comments of my good friend from new jersey, we are very much at the core of the financial meltdown that we have seen and are now living through. my friend seems to forget three letters, a.i.g. he forgets that that great enemy of american capitalism, wild-eyed critic, warren bu

mr. garrett of new jersey. the chair: pursuant to house resolution 964, the gentleman from new jersey, mr. garrett, and a member opposed, each will control five minutes. the chair recognizes the gentleman from new jersey. mr. garrett: and i thank the madam chair. i was just at the microphone a moment ago and speaking about the recognition that i think we have on both sides of the aisle that the c.r.a.'s, the credit rating agencies, were part in par sell to the financial situation that we find ourselves in right now. and during the time i raised two -- probably three significant points on this and what we need to do when it comes to reform. i mentioned the fact that we need to reduce investors' reliance upon rating agencies. i mentioned also that we need to encourage investors due diligence that sort of goes with it. and the third point i is it raise is we need to have increased competition between the credit rating agencies. unfortunately, if you look at the bill before us, title 5 of the bill, includes a numbe

mr. garrett: that's correct. we're going to close, right. mr. kanjorski: i'll take the remaining time on our side. the chair: the gentleman from pennsylvania is recognized for two minutes. mr. kanjorski: madam chairman, this was a very close vote in the committee and highly contested issue and i understand that there are hard and good feelings on both sides. i think the proponents of the amendment that carried in the committee which now this amendment is trying to reverse here on the floor, we're trying to say that government is hurting in some way the small companies, about 5,000 of them, if we continue to impose 404-b. that's not correct. first and foremost, 404-b to the companies that are less than $75 million in capitalization, are not presently compelled to follow any of the existing sarbanes-oxley proposals. as a matter of fact in the underlying bill it won't be until 2011 that there will be an imposition of that and only after a study that has already been ordered is made. which is chairman of the full committee recognized in his presenta

mr. garrett: you yielded it to me. i'm responding. mr. frank: i a want to respond to the response -- i want to respond to the response. i said i took -- i took two minutes for myself and yield time -- mr. garrett: i'm sorry. i thought you wanted a response. i'm sorry. the chair: both minutes have expired. mr. frank: i yield myself 30 seconds to explain to the gentleman who misunderstands the rules. i yielded myself two minutes so we could have the conversation. he then used up both minutes. it was not within my power to continue it. i will get back to it now, i don't want to keep my friend, i yield four minutes to the gentleman from illinois. mr. garrett: hopefully i answered your question. mr. frank: i yield to the gentleman from illinois. the chair: the gentleman from illinois is recognized for four minutes. >> thank you, mr. chairman, i rise in strong support -- mr. frank: the gentleman -- temporarily i move the committee do now rise. the chair: for what purpose does the gentleman from massachusetts -- mr. frank: i move the committee d

mr. garrett: another two minutes. mr. hensarling: 4301, which credit cards, which home mortgages and which car loans we are allowed to receive and the list goes on and on and on. madam chair, what this really leads us to is a bailout and job loss bill where the bill get bigger, the small get smaller, the taxpayer gets poor and the economy gets political. what does a political economy look like? we have seen it. we have seen it in the government-sponsored enterprises of freddie mac and fannie mae and give them these monopoly powers. they are allowed to grow these profits, but then they do a deal with congress, but oh, you have to have an affordable housing machine, you need to have this political mission and $1 trillion of taxpayer liability of taxpayer exposure later, we know what that's about. how about gm and chrysler? when they went bankrupt, allies of the administration, united auto workers, they end up with a sweetheart deal. and chrysler, 29 cents on the dollar but the united auto workers, 43 cents on the dollar and

mr. garrett: yes, sir. mr.k: i would say, if there were to be a no on the voice vote, i think that would be a reasonable end to this particular discussion and we can then continue on the level we talked about. mr. garrett: with that comment and also with the understanding that we are not talking about the other c.r.a., ou

mr. garrett: you yielded it to me. i'm responding. mr. frank: i a want to respond to the response -- i want to respond to the response. i said i took -- i took two minutes for myself and yield time -- mr. garrett: i'm sorry. i thought you wanted a response. i'm sorry. the chair: both minutes have expired. mr. frank: i yield myself 30 seconds to explain to the gentleman who misunderstands the rules. i yielded myself two minutes so we could have the conversation. he then used up both minutes. it was not within my power to continue it. i will get back to it now, i don't want to keep my friend, i yield four minutes to the gentleman from illinois. mr. garrett: hopefully i answered your question. mr. frank: i yield to the gentleman from illinois. the chair: the gentleman from illinois is recognized for four minutes. >> thank you, mr. chairman, i rise in strong support -- mr. frank: the gentleman -- temporarily i move the committee do now rise. the chair: for what purpose does the gentleman from massachusetts -- mr. frank: i move the committee d

mr. garrett. the gentleman from new jersey is recognized for two minutes. mr. arrett: delay, delay, delay? it's absolutely delay. we have been waiting here for the last four hours waiting for your side of the aisle to come to the floor to debate this bill. and i would ask, who it is on your side of the aisle that was delay, delay, delay. i would be glad to ask that person why are you delaying trying to reform this in the country. people are watching what is going on on the floor right now and they said you must go down to the floor to end the bailouts and end this legislation that will cut jobs in this country and end this legislation that will expand the size of government. i understand why the gentleman from colorado says we are mistaken as to whether or not there are bailouts in this bill. this bill is larger than the health care bill. it's larger than the cap and trade bill, the bill that no one read before they came here or the health care bill before they came here. maybe the reason why the gentleman from colorado is perhaps mistaken on this point is becau

mr. garrett. >> what we can try to do from the government's perspective is try to make sure that there was justice. we need to strive in order to get justice. everyone should be held accountable for executing their own due diligence in their investments. this changes from who your from the proverbial lowly the and the union official who might have more resources and the little old lady would be. the level of due diligence as core to be responsible. we do expect the due diligence. that is your responsibility. added to that this will that is reliant. when you do your due diligence, looking to the sec, have they done their job? you are relying on them to do their job. when you look to -- that is before the factory at the should be able to look to others to do their job. this is the whole issue. there is a bill on the floor this week. this creates a moral hazard, if you will. by relying on the government, as you did, because the government says there were to protect you, you have the right to rely on them. maybe you would have done more due diligence, but we told you that you could rely on it.

mr. garrett. >> thank you for your continued pursuit of this issue and this series of hearings that you chair. it's been a full year says bernard madoff called it his own house of cards and admitted that he had operated the largest ponzi scheme in history. you think that by this week, awful 12 months removed from his admission, our financial regulators, some of whom that have admitted they were negligent in protecting investors from his fraud, would have helped the many victims -- as many victims as they could. you would think that what the enormity of the ponzi scheme and human tragedy it has caused, they would be as generous as possible. and you would think that because his investors receive detailed, and genuine statements, his victims had every reasonable expectation that the money in their account was really there, belong to them, and that they were fully protected by the security laws. sadly, you would be wrong. instead, in the year since madoff has turned himself in, the largest and most sophisticated financial system and the world, rather than providing restitution and the largest fra

mr. madoff's fund. >> chairman kanjorski, ranking member garrett, and members of the committee, thank you for holding these hearings and looking into the sec's complicity with bernard madoff investment. my name is jeannene langford and i live in san rafael, california. as one of the more than 16,000 victims of the madoff ponzi scheme, i am grateful to have the opportunity to present how financially devastating scandal was to me personally. it shattered my trust in my government's ability to serve and protect us. my hope is that congress would choose to recognize and protect all indirect investors such as myself who were victimized by this scandal. i have worked for 30 years as an art and design professional in the stationery and craft industry for the past 17 years have been as a single parent working to provide for myself and my daughter. in the areas where i have little expertise, i recognize the necessity to hire a specialist. personal investment was one of those areas, and i knew that there were systems such as the sec employees from my research, there was no reason to believe that this investmen

mr. connelly? >> chairman, ranking member garrett and members of the subcommittee.thank you for the opportunity to appear before you today on behalf of the securities and exchange commission. i am the s.e.c.'s deputy sy solicitor. there are a number of issues being discussed here today but i wish to focus my legitimated time on views of liquidation of bernard madoff's funds. we are keenly aware of the devastating losses incurred by the investors who entrusted their money to madoff. many if not most of his victims have had their lives up ended. experience and reform the way we operate. over the past year we have taken significant steps in that regard, reinvigorating the enforcement division, enhancing our inspections, bolstering the training program, revamping our tips and complaints process, and hiring personnel with new skill sets. and we will continue to reform. with regard to the madoff liquidation t commission and its staff have been analyzing cipat legislative history and case law to determine how to properly value the claims of the investors. while claims for

mr. madoff's fund. >> chairman kanjorski, ranking member garrett, and members of the committee, thank you for holding these hearings and looking into the sec's complicity with bernard madoff investment. my name is jeannene langford and i live in san rafael, california. as one of the more than 16,000 victims of the madoff ponzi scheme, i am grateful to have the opportunity to present how financially devastating scandal was to me personally. it shattered my trust in my government's ability to serve and protect us. my hope is that/gg)k i provide for myself and my daughter. in the areas where i have little expertise, i recognize the necessity to hire a specialist. personal investment was one of those areas and i knew that there were systems such as the sec in place to protect me. from my research there was no reason to believe that this investment was not a viable place to put my life savings. i have no way of knowing a partnership where i place my money was invested with madoff. money i had invested with madoff represented my life savings. it was my retirement, a down payment for house, investment for t