Corporate Management Accountability Act of 2021

Mr. President, today I am reintroducing the Corporate Management Accountability Act, which asks each publicly traded company to disclose its policies on whether senior executives or shareholders bear the costs of paying the company's fines and penalties.

In 2014, William Dudley, then the President of the Federal Reserve Bank of New York, gave a speech titled ``Enhancing Financial Stability by Improving Culture in the Financial Services Industry.'' In this speech, President Dudley said, ``in recent years, there have been ongoing occurrences of serious professional misbehavior, ethical lapses and compliance failures at financial institutions. This has resulted in a long list of large fines and penalties and to a lesser degree than I would have desired employee dismissals and punishment . . . The pattern of bad behavior did not end with the financial crisis, but continued despite the considerable public sector intervention that was necessary to stabilize the financial system. As a consequence, the financial industry has largely lost the public trust.''

Since 2009, banks around the world have paid $394 billion in penalties, according to the Boston Consulting Group (BCG). This is an increase of $22 billion from the last time I introduced this legislation. It has been evident that simply fining and penalizing financial institutions at the corporate level is not enough to deter bad actors. Senior executives, many of whom are all too eager to take credit for a company's good news, must also take more responsibility for the bad news, especially if it is true that the buck stops with them.

According to Professor Peter J. Henning, who also writes the White Collar Watch column for the New York Times, ``a problem in holding individuals accountable for misconduct in an organization is the disconnect between the actual decisions and those charged with overseeing the company, so that executives and corporate boards usually plead ignorance about an issue until it is too late.''

The Corporate Management Accountability Act I am reintroducing today is one attempt at helping to solve this problem. The bill simply asks publicly traded companies to disclose whether they expect senior executives or shareholders to pay the cost of corporate fines or penalties. This proposal has been supported by University of Minnesota Law School Professors Claire Hill and Richard Painter, who also served as President George W. Bush's chief ethics lawyer, as well as Americans for Financial Reform.

I urge all my colleagues to join this legislative effort to hold senior executives accountable for their actions.

Mr. President, today I am reintroducing the Stronger Enforcement of Civil Penalties Act along with Senator Grassley and Senator Leahy. This bill will help securities regulators better protect investors and demand greater accountability from market players. Even in the midst of an unprecedented public health and economic emergency, we continue to see calculated wrongdoing by some on Wall Street, and without the consequence of meaningful penalties to serve as an effective deterrent, I worry this disturbing culture of misconduct will persist.

The amount of penalties the Securities and Exchange Commission (SEC) can fine an institution or individual is restricted by statute. During hearings I held in 2011 as Chairman of the Banking Committee's Securities, Insurance, and Investment Subcommittee, I learned how this limitation significantly interferes with the SEC's ability to execute its enforcement duties. At that time, a Federal judge had criticized the SEC for not obtaining a larger settlement against Citigroup, a major actor in the financial crisis that settled with the agency in an amount that was far below the cost the bank had inflicted on investors. The SEC indicated that a statutory prohibition against levying a larger penalty led to the low settlement amount. Indeed, then SEC Chairman Mary L. Schapiro in 2011 also explained that ``the Commission's statutory authority to obtain civil monetary penalties with appropriate deterrent effect is limited in many circumstances.''

The bipartisan bill we are reintroducing aims to update the SEC's outdated civil penalties statutes. This bill strives to make potential and current offenders think twice before engaging in misconduct by raising the maximum statutory civil monetary penalties, directly linking the size of the penalties to the amount of losses suffered by victims of a violation, and substantially increasing the financial stakes for serial offenders of our nation's securities laws.

Specifically, our bill would broaden the SEC's options to tailor penalties to the particular circumstances of a given violation. In addition to raising the per violation caps for severe, or ``third tier,'' violations to $1 million per offense for individuals and $10 million per offense for entities, the legislation would also give the SEC more options to collect greater penalties based on the ill-gotten gains of the violator or on the financial harm to investors.

Our bill also seeks to deter repeat offenders on Wall Street through two provisions. The first would authorize the SEC to triple the penalty cap applicable to recidivists who have been held either criminally or civilly liable for securities fraud within the previous five years. The second would allow the SEC to seek a civil penalty against those who violate existing federal court or SEC orders, an approach that would be more efficient, effective, and flexible than the current civil contempt remedy. These updates would greatly enhance the SEC's ability to levy robust penalties against repeat offenders.

According to the SEC's FY 2022 Congressional Budget Justification, ``the SEC is responsible for reviewing the disclosures and financial statements of more than 7,400 reporting companies.'' The SEC further notes that a ``record 67 million U.S. families held direct and indirect stock holdings in 2019, up 13 percent from 2010,'' and the agency is ``charged with overseeing approximately $100 trillion in annual securities trading on U.S. equity markets and the activities of more than 28,000 registered entities.'' All of our constituents deserve a strong regulator that has the necessary tools to go after fraudsters and pursue the difficult cases arising from our increasingly complex financial markets. The Stronger Enforcement of Civil Penalties Act will enhance the SEC's ability to demand meaningful accountability from Wall Street, which in turn will increase transparency and confidence in our financial system. I urge our colleagues to support this important bipartisan legislation.

Mr. President, first, let me thank my colleague from New Hampshire, Senator Shaheen, for her extraordinary commitment and leadership as my fellow cochair of the Senate Diabetes Caucus. We are introducing a bill to improve access to innovative diabetes technologies for our seniors and other Medicare beneficiaries. Our bill would create a special task force at the Department of Health and Human Services to examine and resolve barriers that seniors face in accessing the latest diabetes management technologies.

New diabetes technologies, such as the artificial pancreas and implantable continuous glucose monitoring systems, allow those who are living with diabetes to better manage their glycemic levels, assess needed therapy on a timely basis, and adhere better to treatment regimes. These technological advances make diabetes easier to manage and therefore improve the health of people with diabetes.

The market arrival of cutting-edge diabetes technologies is something we all celebrate; however, oftentimes we are finding that patients do not realize the full benefits because many of our Nation's seniors find the new technologies to be difficult or impossible for them to afford.

I have heard from numerous seniors who, when transitioning from employer-provided insurance to Medicare, were shocked to learn that the technologies they had relied upon for years to manage their diabetes are no longer covered because they now have lost their employer- provided insurance, which did cover these technologies, and instead are being covered by Medicare. For example, one Mainer unfortunately had to face the reality that Medicare's coverage denial of a particular sensor that he needed for his insulin pump meant paying up to $8,000 out-of- pocket each year if he wants to continue with his current treatment. He wrote:

Because I am now 65, I am denied care that was available

when I was 64.

He continued:

This approach not only puts me at risk but is quite likely

not cost effective. While the sensors are expensive, the cost

of ambulance calls and hospitalizations . . . is certainly

more.

I could not say it better. It makes no sense for this individual, who has aged into the Medicare system, to lose coverage that he had and relied upon and used successfully to control his diabetes.

To better support the adoption of these technologies, our bill would require HHS to create a special task force on coverage and payment for innovative diabetes technologies that would bring all stakeholders-- from patients to device manufacturers, to government officials and healthcare professionals who are making coverage decisions--to the table. The task force would identify and plan for changes in Medicare coverage and payment policies to ensure that Medicare beneficiaries have access to the latest treatments, to the innovations that are currently available, as well as those that are in the pipeline. The task force would also be tasked with developing strategies for supporting adoption of these technologies.

This effort builds on our past advocacy to improve the day-to-day life of individuals with diabetes. In January 2017, in response to the bipartisan effort that Senator Shaheen and I have led, CMS first approved the use of continuous glucose monitors. We also successfully urged CMS last year to support the use of smartphone apps in conjunction with continuous glucose monitors. These are proven lifesaving devices that are relied upon by people with diabetes to provide them with realtime measurements of their glucose levels. This information is key to preventing costly--sometimes deadly--diabetes complications.

While I am pleased that our advocacy has helped spur these policy changes, I remain frustrated that too often Medicare lags behind commercial insurers. Greater adoption of these new diabetes techniques can help address the explosive growth in the financial and human toll of diabetes. Diabetes accounts for an extraordinary one-in-three dollars in Medicare spending. It is paramount that we encourage HHS to adopt a more cost-effective and compassionate approach to treating this chronic disease that affects more than 30 million Americans.

The Improving Medicare Beneficiary Access to Innovative Diabetes Technologies Act encourages a proactive approach to diabetes coverage and payment. I encourage my colleagues to support our efforts.

Again, thanks to my partner Senator Shaheen for her leadership in this area.

Mr President, I come to the floor today to join my colleague Senator Collins from Maine, who will be here shortly, who is also my cochair of the Diabetes Caucus, to reintroduce the Improving Medicare Beneficiary Access to Innovative Diabetes Technologies Act. This is legislation that would establish a task force to provide recommendations to help

guide Medicare's decisions on coverage and payment for new technologies to improve the lives of people with diabetes.

I have had the opportunity to see the challenges that families with members who have type 1 diabetes face. My granddaughter, my oldest granddaughter, has type 1 diabetes, and I know the challenges her family faces navigating a complex web of insurance coverage rules for technologies. Anytime a new technology comes out that would benefit her, to get the insurance companies to adopt those technologies is a huge challenge, and it requires hours of phone time with the insurance company, trying to persuade them that they should provide the coverage.

Well, we know that these insurance companies often base their coverage and reimbursement rules on Medicare. That is why it is so important for the Medicare Program to keep pace with the development of new diabetes technologies and devices.

I appreciate the opportunity to work with Senator Collins on a regular basis in the Diabetes Caucus. In 2017, we were successful in pressing Medicare to cover continuous glucose monitors, something that seems like an obvious choice given the difference that those CGMs can make for people who have diabetes and ensuring that their blood sugar stays stable. We have also worked together to ensure that Medicare provides flexibility so that patients can use smartphone apps with their continuous glucose monitors.

In the years to come, we need Medicare to make progress toward covering the artificial pancreas, a landmark development that will be the most significant change for people with diabetes since insulin was discovered, but to do this, we shouldn't have to resign ourselves to this piecemeal approach to Medicare coverage that requires continual pressure from Congress and advocates.

We need an independent body, like the one that is identified in our legislation, to help provide recommendations to Medicare so that its coverage of new technologies can adapt more quickly as innovation advances. That is why I am proud to be here on the floor and proud to join Senator Collins in reintroducing this bill. I hope my colleagues will take a look at it, decide that it merits passage, and work with us to get that done.

My colleague has arrived on the floor.

Senator Collins, I was just saying that I was very proud to be able to join you in reintroducing this legislation, and hopefully this session, we will be able to get it done. Thank you for your leadership, and I look forward to hearing your comments and to working to get this passed.