Senators Mark Warner (D-Va.) and John Kennedy (R-La.), members of the Senate Banking Committee, have introduced the Securities Fraud Enforcement and Investor Compensation Act, bipartisan legislation that would empower the Securities and Exchange Commission to better seek restitution for investors harmed by securities fraud.

The bill, filed this week, would give the SEC a broader range of tools to seek compensation for investors who’ve lost money to Ponzi schemes and other investment scams. Perhaps most importantly, it would extend the window of time the Commission can pursue a claim on an investor’s behalf from five years to 10.

“As Bernie Madoff demonstrated, financial fraudsters can sometimes go on for years, even decades, before they finally get caught. They shouldn’t be able to rip off investors just because some arbitrary five-year window has expired,” Warner said in a statement.

On June 5, 2017, the Supreme Court in Kokesh v. Securities Exchange Commission ruled that the SEC only has five years to bring disgorgement claims against bad actors to try to compensate harmed investors. Although the SEC typically strives to bring cases as soon as possible, well-concealed frauds can be undiscovered for many years. Madoff, for example, was able to defraud investors for decades before his investment fund was revealed as Ponzi scheme in 2009.

“Under the Kokesh precedent, clever fraudsters can manage to retain any ill-gotten gains from outside the five-year window,” the senators wrote.

The implications of the ruling limiting the SEC’s enforcement window to five years have been significant, they added, citing the Commission’s 2018 enforcement report. It noted that: “The court’s ruling in Kokesh may cause the Commission to forgo up to approximately $900 million in disgorgement, of which a substantial amount likely could have been returned to retail investors.”